At this time of year, many independent communication professionals are reviewing their rates and making decisions about their pricing strategy for the new year. In this guest post, Solo PR Pro premium member and Summit speaker, Daria Steigman of Steigman Communications reviews the book Pricing for Profit: How to Develop a Powerful Pricing Strategy for your Business. Daria received a free Kindle copy of Pricing for Profit in exchange for agreeing to review it–but without any restrictions on what she might say.
What is “the right price?”
Pricing is one of the trickiest elements of any business. Price too high and you risk losing business you want to win. Discount too often or too much, and you risk people thinking your product is cheap or you’re for sale.
The other problem with a poor pricing strategy is that you will go broke selling to the wrong customers or, in the case of PR pros and other marcomm consultants, catering to the wrong client base.
Peter Hill wants to help you.
Hill has written Pricing for Profit: How to Develop a Powerful Pricing Strategy for Your Business. In it, he argues that “most businesses are already worth more than they have the courage to charge.” He suggests that too often we don’t raise prices out of fear—of the unknown, of confrontation, and/or of rejection.
Understanding the barriers is, of course, the easy part. Crashing through them? Well, that’s where the hard work comes in.
Don’t buy into these pricing myths.
In Chapter 8, Hill walks through nine myths about pricing. Among them:
- Customers only want the cheapes.
- Setting prices is a once-a-year decision.
- Every customer is worth having and every sale matters.
- Raising prices loses customers.
Most pricing decisions come down to good, quick, or cheap.
What I love about Pricing for Profit is that Hill talks about the value scale and why pricing is really about what the value is to each customer or client. For example, I often shop at Whole Foods because it’s convenient (quick) and the quality is good. But it’s certainly not cheap. I shop at Amazon, on the other hand, because it is good and cheap. But it takes longer to get a new product in my hands than if I just walked into my neighborhood Best Buy.
This is equally applicable to consulting. There’s always going to be a cheaper option, but I believe that you get what you pay for. So I price based on expertise and track record (i.e., being good) and getting the work done when I say I will (i.e., quick). In other words, pricing wisely is about a lot more than just price.
Like the best business books, Pricing for Profit is meant to be actionable. Chapters on creating packages, choices, and options offer new ways to think about what you’re offering and how you’re selling. And the entire book is filled with action steps to think through how to implement a smarter pricing strategy for your business. Unless you have the whole pricing equation nailed down, you’re going to find something in this book that you can put to use in your business.
How do you make sure that you are “pricing for profit”? Share your tips in the comments below!