It can be difficult to know the difference between these three things when we run our businesses. They each have their own definition and it’s important that as business owners we are clear on the impact of each and that we communicate this to our customers.
“The amount that has to be paid or spent to obtain a product or service.”
“The amount expected, required or given in payment for a product or service.”
“The regard that a product or service is thought to deserve; the importance, worth or usefulness of something.”
When we price our services we are essentially placing a cost on our value. Our price might be considered too low for the value we offer. The price someone is willing to pay for the cost of our service may not fully represent its value.
When we think about our pricing policy for our products or service we have to consider all three elements here. It’s important that we devise costs that include all elements that have gone into getting your product or service to your customer. For those of us running our own businesses, often we would do what we do for free because we love it so much! However, this would make your business a hobby rather than a business, so it’s important to take a sound and rational approach to your pricing policy.
Value is something that we build into our businesses in implicit and explicit ways. It’s in the service we provide and the feelings that our customers and clients get from interacting with us. It’s in the recommendations made about us and the amount of repeat business we receive. Think about the ways that you can add value to the way you deliver your service that will encourage others to feel that you offer a valuable experience when spending money with you.
For those able to attend, we’re holding an event in London on the 20th October to find out how you can turn your hobby into something that you can be paid for, getting practical hints, tips and start-up pointers. For tickets click here:
Feel free to share this link with anyone you think would find this helpful to their start-up journey…
As always, good luck!