How do you establish the “right” price for your product or service?
When I was in commercial real estate, we determined the pricing strategy by studying the market and the competition. Broken down, it looked like this: the problem people needed solved was – I need a space to work (office space). Everyone who came to us had this fundamental need to fill. Our pricing came down to what other needs we could fill for them as well, and how it compared to our competition. Our motto was: NEVER compete solely on price. It was our job as top sales people to differentiate our product enough that we never needed to be the cheapest option to win the contract.
So for you, you can look at it this way: what is the fundamental problem I solve for people? And what other needs and I filling for them that my competitors cannot?
EXCEPT — now here is the IMPORTANT part so pay attention! I don’t want you to START with this question. The question I want you to start with is: how much money do I want to make in the next 12 months? How much do I want to work? And do the math to find out: How much do I need to make per HOUR to create that?
FROM there, you will ask the question: HOW can I solve a big enough problem, meet multiple needs, so that I can command this hourly rate? How can I create 10x that amount of value for someone?
Here is the first step. Look at your current hourly rate, look at the hourly rate you WANT to be making and notice the gap.
I want you to pay attention to what EMOTIONS and STORIES arise when you think about closing the gap – THAT is what you have to work with first and foremost. Become bigger than the discomfort and you can bridge the gap. But the awareness is the first step.