{"id":32026,"date":"2021-02-16T08:00:00","date_gmt":"2021-02-16T13:00:00","guid":{"rendered":"https:\/\/honeybook.site.strattic.io\/?p=32026"},"modified":"2022-08-05T06:27:40","modified_gmt":"2022-08-05T13:27:40","slug":"pricing-for-profit","status":"publish","type":"post","link":"https:\/\/hbb.dev.reliablepenguin.com\/blog\/pricing-for-profit","title":{"rendered":"Pricing for Profit & Positioning Your Value"},"content":{"rendered":"\n
\"pricing<\/figure>\n\n\n\n

Pricing for profit and pricing creative services can feel extra challenging because we are selling an invisible promise whose value comes from the perception of the client. Add that to lack of quality training on how to price for profitability and growth, and it is no wonder that so many creatives struggle with this critical aspect of running a successful creative business.<\/span> <\/span><\/p>\n

Most of the time it is because of two things.<\/span><\/h2>\n
    \n
  1. Lack of clarity in what you actually are selling (hint, it\u2019s not what you do or deliver)<\/span><\/li>\n
  2. Only looking at one piece of the pricing pie<\/span><\/li>\n<\/ol>\n

    Before you dive into this article, let me remind you that not all of your services and products need to be priced for profit all of the time. I mean, obviously we need to price for long term sustainability and growth if we are going to have a successful business, but there are all kinds of different pricing strategies.<\/span><\/p>\n

    When Pricing for Profit Begins with Alternative Pricing Strategies<\/b><\/h2>\n

    Micro Offers & Trip Wires<\/b><\/h2>\n

    These are low priced service offers that allow your potential clients to try you out before they make a bigger investment. Different from a free sample or free trial, they are a key step in the Buyer Journey. The goal is to move from prospect to paying client.<\/span><\/p>\n

    Typically these are able to be consumed or used immediately, give a good representation of your brand promise, and are priced at less than $100 (some less than $20). These offers should be designed with the intention of leading clients to a specific next higher level of service from you.<\/span><\/p>\n

    Remember, spending money with creatives means a HUGE amount of trust \u2013 we are after all selling an invisible promise. A micro offer or trip wire eases them into spending money with you in a gentle, not so risky way.<\/span> <\/span><\/p>\n

    Fact Action Incentive Offers<\/b><\/h2>\n

    These are usually time limited bonuses (or limited quantities at a discount) to encourage people to spend their money with you RIGHT NOW, even if they don\u2019t actually use the services until a later date. Think BOGO events or Gift With Purchase offers.<\/span><\/p>\n

    As an entrepreneur, this can be a great way to even out some of the revenue highs and lows of a gig economy. Always have a reason for doing this that separates it from your usual pricing OR create a distinct offer.<\/span><\/p>\n

    TIP: Adding in value is always a better strategy than offering a discount.<\/span> <\/span><\/p>\n

    Market Penetration<\/b><\/h2>\n

    When you are new to an industry (or to serving a new kind of client) it can be tempting to feel like you need to charge \u2018newbie\u2019 prices regardless of your skill level and experience. Part of this is good ol\u2019 imposter syndrome \/ self-doubt and part of this is because we have been indoctrinated with hourly and day rates. And that the value of services is somehow related to the creatives\u2019 number of years of experience or case studies.<\/span><\/p>\n

    The real value is the difference your services make to the business (or consumer) and the individual that hires you, regardless of the time it takes to deliver. In fact, if you think about it, charging your clients by the hour means that you get paid less if you are fast and efficient and they pay more for work that takes longer to deliver. How does that make sense?<\/span><\/p>\n

    And yes, skill and experience still matter.<\/span><\/h2>\n

    Slashing prices to get attention and undercut any other providers is a strategy. It is not a sustainable or profit generating strategy but rather a \u2018try before you buy\u2019 strategy similar to fast action incentives. However this is without the clear separation of time or quantities.<\/span> <\/span><\/p>\n

    The creatives who use this strategy successfully often leverage the \u2018beta\u2019 aspect of their offer. Be very careful with \u2018market penetration\u2019 pricing. It is much harder to raise your rates to a profitable level after you\u2019ve already established yourself as the \u2018discount\u2019 service.<\/span> <\/span><\/p>\n

    What Are You Actually Selling<\/b> <\/span><\/h2>\n

    Before you can price anything, you need to know exactly what it is that you are selling. You may think you are selling photographs, or videos, or copy, or logos, or websites or… but that is only one part of the solutions you provide to your clients. Those are their external needs. You provide so much more than JUST your deliverables.<\/span><\/p>\n

    Just like how <\/span>HoneyBook<\/span><\/a> doesn\u2019t just sell a business organization \/ client workflow automation software<\/a>.<\/span><\/p>\n

    They are selling business confidence, free time with your family, happy clients who love how easy it is to hire and work with you, no \u2018dropped balls\u2019 in your communications, easy budget conversations, energy and focus to be creative and stay in the flow, access to community and so much more.<\/span><\/p>\n

    So how do you figure out what you are <\/span>really<\/span><\/i> selling? You start with the external deliverables and then work on discovering their value to your clients.<\/span> <\/span><\/p>\n

    Discovering the Value Of Your Creative Services<\/b><\/h2>\n

    Step One: Organize Your Services into 3 to 5 Categories<\/b><\/h2>\n

    I get it, we are multi-passionate creatives. We all have a lot of different things we can do for our clients and may have a dozen different packages or services we provide. And that\u2019s great for our creative fulfilment… but not so great when we are trying to create clear pricing and offers that sell. So, do your best to organize all your services into categories.<\/span><\/p>\n

    For example:<\/span><\/p>\n

    –   <\/span> Headshots, Business Branding, Product Photography<\/span><\/p>\n

    –   <\/span> Logos, Brand Strategy, Web Design<\/span><\/p>\n

    –   <\/span> Blogs & Articles, Social Media, Sales Pages, Course Content<\/span><\/p>\n

    Step Two: Choose an Average or Target Project Size for Each Category<\/b><\/h2>\n

    Yes, every job is different. The project size depends on\u2026x, y, z. Every quote is custom. There are a lot of reasons to resist simplifying your offers. Simplifying and focusing on an ideal size of project for your offers gives you:<\/span><\/p>\n