This is a great article on pricing your product/services......there are valuable lessons to be learned here. What services and expertise are your providing in your jewelry business that would affect how much you should charge?
Is Guessing How Much to Charge Making You (and Your Customers) Crazy?
When business isn't second nature, setting prices can seem very mysterious. And when you look at the range of prices your colleagues charge, you may wonder if the secret isn't as simple--and ridiculous--as guessing or throwing darts.
So where do you find the right price?
The right price comes from enlightened self-interest.
Enlightened self-interest is taking care of yourself and your business and your customers in a way that benefits everyone. You could call it the Golden Rule. You could call it triple bottom line or win-win-win.
Whatever you call it, pricing based in enlightened self-interest requires three things.
- Clarity about what you want your customer to experience or receive as a result of buying your work.
- Clarity about what it will take for your business to deliver those results reliably.
- Clarity about what you need to fulfill your role in delivering those results.
It seems obvious when you think about someone else's business. If you own a taxi company, you need to charge enough to keep the cars running, pay the drivers, and put food on your table--plus whatever else it takes for you to do your best for your customers.
But when it comes to our own businesses, things may not be so clear. When our self-interest is involved, old stories about money and power get in the way of determining the right price. We may shy away from the simple work of finding out what we need to charge for fear that we will seem greedy or arrogant or uncaring.
But remember the taxi: without gas, you can't give anyone a ride.
The Customer Comes First
Before you can begin to price your work, you need to know what it is, and that means knowing what it will take to deliver results to your clients and customers.
This means letting go of the issue of price for just a bit. Without your stories about what people can and will pay and what it means if you charge more or less, go inside and imagine the results you want for your clients.
Laura, a salon owner, wants her clients to leave not only looking great but confident that their hairstyles will continue to look great until they come back.
I asked Laura to think through the steps involved in getting that result. Here's what she came up with:
- Showing the customer how a style would look on her.
- Helping the client understand what would be involved in maintaining the style she chose.
- Choosing a different style if necessary and repeating the preview process until the customer was satisfied with both the look and what it would take to keep it up.
- Styling.
- Training the customer in techniques she would need to maintain her cut.
What Will It Take?
When Laura was satisfied that she had a clear path to the results she wanted for her customers, she looked at what her business needed to deliver those results.
This included:
- A video system for previewing styles.
- Training sessions for stylists.
- A separate consultation area for previews.
- Bundling products so that clients were sure to leave with what was needed to maintain a style.
- An enthusiastic and energetic owner--which meant paying Laura enough to take time off, attend yoga classes, and spend afternoons with her pre-school daughter.
The Human Factor
As the business owner and as a stylist, Laura also had needs. They included:
- Time, which meant hiring a receptionist to schedule appointments and handle day-to-day administration.
- Confidence in her staff, which meant allowing for the time to interview prospective stylists in-depth.
- Confidence in her own appearance and presence, which meant time and money for grooming and wardrobe.
- Inspiration, which involved attending conferences and advanced workshops.
A Road Map
Now Laura had a road map to use in packaging her services and setting prices. She could research different ways to meet the needs of her clientele, her business, and herself, and determine what each of these ways would cost. Then she could set prices that would cover those costs plus a little more to cover unexpected expenses and invest in improvements in the business.
The Beauty Part (no pun intended, and how could I resist?)
The best part of setting prices based on enlightened self-interest is that you get to make honest promises you can honestly keep. No more resentment about being underpaid or worries about under-delivering. Your interests and those of your clients are fully aligned.
If pricing has been making you crazy, stop now. Let yourself dream about what you want for your clients and customers. Identify what it will take to deliver that in terms of business systems and assets and your own well-being. Price your work accordingly and leave the guesswork behind.
Reprinted with permission from Authentic Promotion
U.S. Library of Congress ISSN: 1530-311X
Unless otherwise attributed, all material is written and edited by Molly Gordon, MCC. Copyright (c) Shaboom Inc.(r) 2008. All rights reserved. Visit our extensive archives at www.mollygordon.com .
