Small Business Coaching - Three Small Business Pricing Strategies For MAXIMUM Profit
Pricing is one of the biggest issues in small businesses deal with when they create a new product or service for their target market. Price too high and you don’t get any customers or clients…. Price too low and you don’t make any sales because the value of your product isn’t seen. So what is an entrepreneur to do? This small business coaching tip will help you as the business owner you are to come up with pricing that is a win win for both buyer and seller. Read on for more.
What do you charge for your services? How did you come up with that price? Did you just randomly choose it? Checked out the competition? Tried a price until someone bought? I’m going to share with you 3 pricing strategies that you can implement into your business. These strategies have been proven and they’ll work for your business to bring you maximum profits.
#1 Odd Number Pricing
Have you ever wondered why late night infomercials and some big box retailers such as Walmart and Best Buy price their products with odd numbers? Watch TV or shop at the store and you’ll see $19.95, $29.97, $395, etc. Ever wonder why they do this?
The reason: it works to sell more and higher priced items. For some reason, psychologically we think and feel that odd numbers are less expensive than even numbers… even though they’re basically the same price. We look at $29.95 and think it’s cheaper and less expensive than $30. When in reality, it’s only a difference of .5 cents!
You can use this to your advantage in pricing your services…especially when dealing with higher priced services. Let’s say for example you have a service that costs $5,000. If you were to incorporate the odd number pricing strategy, you could bump that down to $4,995. A difference of only $5, but a huge psychological difference. People will think and feel like the $4,995 price is cheaper than $5,000.
This pricing strategy has been proven and it works! I can attest to this fact in my own business. Just about all of my services incorporate the odd number pricing strategy. I have even had people say they could not afford ___ (my even numbered price) only to turn around and say, “okay great” to my odd numbered service! I suggest you try it in your business. Simply, take all of the prices that you charge and re-price them into odd number pricing. Prices ending in 5, 7 and 9 have proven most effective.
#2 Discount Pricing for Buying Multiple Units
A great pricing strategy is to offer a slight discount if a client purchases multiple units a one time or upfront. For example: A business coach may charge a flat rate fee for a 1-hour session, but if a client purchases four, 1-hour sessions at one time (and pays upfront) then they get a slight discount and better deal. Studies have shown that most will opt for the four sessions versus buying them a la carte.
You can do the same in your business. Massage therapy, coaching, chiropractic, acupuncture, etc. are great industries for this pricing strategy. People love deals. So this one is really a win-win for you and the client. Win for them with the discount and a win for you with upfront payment and booked business.
#3 Small, Medium and Large Package Pricing
Rather than offering your clients one type of service for one price, consider packaging your services into a small, medium and large option… with a small, medium and large price tag. This gives your clients more choices to do business with you and makes your services affordable for just about any budget. If a client really wants to hire you, but simply cannot afford your one price and one option, you’re turning business away. Offering a few packages with a few prices, means more people can do business with you.
Of course the way to make this work and profitable for you is the smaller the package and price tag, the less options the client receives. Also, I suggest offering no more than 3 packages (small, medium and large) so that you are not overwhelming your prospects and clients with too many options.
I challenge you to implement one or all of these pricing strategies. They have been proven and really work. Test them and see what works for you. If you’re just randomly coming up with a price for your services or have no proven, tested method for pricing…I can guarantee you’re losing a lot of business!
Jeanna Pool is an Author, Speaker and Marketing Consultant who helps solo-small business owners attract more clients on a consistent basis. For FREE small business marketing ideas visit her website at http://www.MarketingThatWorks.com
More on small business pricing:
Small Business Pricing Strategies
TACTIC #1 — Never simply slash your prices, unless you’re trying to empty obsolete inventory. Instead, try repackaging your prices so they’re more affordable in the short-run so more prospects can afford them. For example, rather than …
Publish Date: 03/27/2010
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