How to price your services is often one of the more perplexing issues facing small business owners. Particularly because we live in relatively small markets, it’s not that difficult for customers to shop around for what they perceive is a commodity service.
In this recent article in the New York Times Small Business blog, several small business owners discuss pricing strategies. One thing all agreed on: Offering a service free without a specific goal in mind can be as detrimental as random discounting. People just don’t value what they don’t pay for.
One of the sources interviewed for the article owns a high-end tutoring service for children. Her comment: “’I think it also depends on who your customer is. Certain people expect certain prices.’ She recalled a parent who told her she was doing a great job, but would not be taken seriously because her prices were too low.”
A common strategy we see a lot in the digital world (think LinkedIn) is to establish a baseline service at no/minimal cost, but set up second and third tier options that customers are willing to pay a premium for.
Great insights in the Times piece. We encourage you to read it.
Note: “Fresh Ideas” are published each week by Countybank and its family of financial service companies. With financial centers in Greenville and Greenwood, Countybank has a team of highly engaged professionals ready to bring a full scope of financial solutions designed to help families and business owners reach their goals.