We are often asked about pricing strategies for start ups and the biggest tip we can share is this.
If you want to build a sustainable and profitable business, you need to provide your customers with something of considerable value to them, without undercharging your solution or own value.
Sounds simple right?
Here are the steps that we work through when developing pricing strategies and commercial solutions for our own business and clients that if you apply, will see your profits skyrocket.
Competitor Analysis - this is essential for every business to understand the market and where you are positioned within it. Competitors include any possible alternative solution that you target audience could select in lieu of yours. So what do other similar products and services charge.
Value Proposition - If you can provide superior value over your competition, you will not need to compete on price. How if your business offering different? What extra value (for minimal costs/effort) can you provide?
Pain Points - What is the main problem you are solving for your customer and what is their cost of not solving it?
Opportunity Cost - What is the value of potential revenue / benefit that you are providing them.
Time vs Value - Stop charging for your time and start charging for your value. When you consistently deliver exceptional value and return for your customer, they will pay a premium and you can serve them better.
You will be amazed how resetting your mindset by following these steps will not only change how you service your customers and how you sell your services but will significantly improve your profits without changing your core business.