Your Price Should Be Right
Over the holiday's I had the distinct pleasure of watching a brother and brother-in-law bid to win my daughter's babysitting services. Aside from the great pride I felt knowing that my daughter's child care services were so in demand, I was reminded at the irony over how we value the goods and services we buy and sell.
Ask any parent what their most valuable "possession" is, and they will say their child(ren). That there is nothing they would not do for their children, nor is there any expense they would spare for them. That is until its Saturday afternoon and the parents want to go to a movie that evening. Then the goal is to find a teenager that has the lowest per hourly rate, regardless of the sitter's actual child care skill set.
People make similar silly decisions when pricing out the goods and services that they sell as well. Granted the price someone will pay for your services or products is a very important purchase consideration. But it should not the only, or even the top consideration behind how you set your pricing. If it is, as soon as a lower priced option comes around, you will have lost a customer or a client; losing not only their revenue, but the costs expended to make them a client/customer in the first place.
I do not mean to say that you should price your goods and services at a high level for the hell of it, but don't overly discount because you think your customers are only buying based on price. Though presented from the perspective of the buyer, John Ruskin, a social and political economic thinker and writer during the 1800's perhaps described pricing laws best:
It's Worse to Pay Too Little.
It is unwise to pay too much, but is is worse to pay too little. When you pay too much, you sometimes lose a little money, that's all.
When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do.
The common law of business balance, prohibits paying a little and getting a lot. It can't be done! If you buy from the lowest bidder, it is well to add something for the risk you run, and if you do that, you will have enough to pay for something better.
So in this new year and new decade, if you make resolutions, I suggest you resolve to properly value yourself and establish an appropriate pricing model.