Top 7 Ways to Know Your Price is Right for Your Services

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» Marketing

Published: November 14, 2008

The most popular question among most entrepreneurs and solo professionals is whether their prices are competitive. People in business always wonder if they could charge or should charge more for their services. How do you know if you can charge more? How do you know if you are charging too much or too little? The following is a list of ways that I use to determine whether my prices are right for a certain service or project.

1. A high percentage of interested customers are purchasing your service.

If your price is too high, clients won't be able to afford you, so they may go elsewhere. Likewise, if your price is too low, they might feel that they will be getting higher quality from your competitors.

2. A small percentage of customers are complaining about the price and want to negotiate.

Not everyone will agree with your price. People like to negotiate for a better price. If too many clients are complaining, then it's time to lower your price. If too many clients are thinking your price seems fair, then you might try experimenting with higher rates.

3. The type of client you want to work with can afford your price range.

If you are working primarily with corporations, you can charge much more. Larger companies tend to have more money to invest in outside services. Individuals or smaller companies have a smaller budget, so you may have to charge lower rates.

4. You are noticing that other service providers in your field are charging similar price ranges.

Always research your competitors. What are they charging? Is your knowledge and quality of work comparable to theirs?

5. You are making a profit on every project.

Keep in mind how much it will cost in time and expenses. Make sure that your profits make the project worth all the effort.

6. Your clients keep coming back for more.

If your clients tend to come back for more, then you know they feel the price is well worth the quality of work they are receiving from you. If most of your clients are one-time clients, it's time to figure out how to get some of them to keep coming back.

7. Your income is increasing as your knowledge in the area of service is increasing.

Your price should always reflect the amount of knowledge you are bringing to the table, as well as the quality of your work. You don't want to short-change yourself, if you have been in business for while or really know your stuff.

Remember that it is important to continually assess the prices of your services. Make sure you are remaining competitive and that your rates reflect your knowledge, experience and quality of your work.

Author Information

Kimberly Reddington

Kimberly Reddington, founder of CereusWomen.com, teaches moms how to turn their skills into a successful home-based service business and to find a balance between their work and life. Discover Kim's popular special report.

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