Sales: Pricing The Value Of Your Service

Sales: Pricing The Value Of Your Service

You’ve done the research, worked tirelessly to hone your service and now you need to tell the world all about you! But you aren’t FREE so you need to set your pricing – where do you start?

As a small business owner, just starting out or needing to up-level your business, it can feel like a minefield when it comes to pricing. Use these simple steps to l help you get to a happy conclusion quickly.

Pricing your service

If your business is making products it’s a little easier to set your prices. You look at the raw costs, the time it takes you to make the products, factor in overheads and add a little on top for profit.

But, for a service business, there isn’t something that a customer can come up to and touch and feel (really isn’t allowed in this sector!) to gauge how much they think it is worth. A service is a perceived result over a tangible product.

Think about what’s in your head

When starting out, I had the fantastic support from MINT Business Club and especially Nicola Jane Little. She and I did an exercise writing about ‘me’ on a flip chart. In the centre was a little stick version of Moira and off that we wrote about all the work experience I have ever had – right back to helping volunteer at a Stroke Association club my mum ran when I was a teenager, my time at BBC Worldwide, winning Sales Person of The Year, up to running my own small product based business.

The flip chart filled up very quickly.

What Nicola was trying to demonstrate is that I, as an individual, have lots of very unique-to-me experiences that no-one else has.

People would be paying to gain access to what was in my mind – my 30+ years of selling experience. All the training I had received at the BBC, at Hearst UK, even the training I had as a trainee manager at Laura Ashley.

So, first and foremost, I recommend carrying out the very same exercise. Ask a business buddy if they’ll help draw more info out of you, by asking you questions, asking you to expand on what any role you had involved (my volunteering as a teenager demonstrated that I have wanted to help people from an early age).

By doing this you will start to see the enormous knowledge bank you have inside your head which will fill you with confidence to see your value as greater than just a price.

Practicalities of pricing

There are some practicalities to consider also.

  • What costs are involved in you delivering this service?
  • Do you work out of an office which you need to rent? Or even, as lots of us are now doing, working from home which incurs costs – increased use of heating and electricity, use of home broadband etc.
  • Computer software that allows you to conduct your service (for me that is Google Workspace as I use Google Meet for virtual training and 121’s). Your mobile phone – a necessary tool for any salesperson!
  • Memberships to organisations or professional bodies; insurances you must have to carry out your services.

They all need to be factored in.

Plus, if your service requires you to deliver a document/workbook these will incur a cost to you also (whether that’s outsourcing graphic design or the paper to print them on and postage to send out, for example).

Really take the time to factor everything in, breaking down the costs.

What if I’m no good at numbers?

As someone who has suspected ADHD this part of the equation is really hard work for me, so if you can get some expert help from an accountant or use an online tool like this to some tools like a sales pricing calculator by Sally Farrant or watch a replay of Laura Cook’s previous MINT training – this will make life a little simpler.

Competitor pricing

Another factor when looking at your pricing is to look at a couple of competitors – now I’m not saying get into a bout of comparisonitis. Please don’t. But do look at their pricing so you have something to measure yours against plus you will be better armed in a negotiation if your prospect pipes up about this other company.

What you need to keep in mind when doing this part of your research is to remember all the value you have stored in your head, that they don’t. And vice versa – you are working out YOUR prices not theirs.

Different Pricing Models

Lastly you need to consider how you are going to charge clients.

An hourly rate – this helps you receive a good return on the actual time you spend on delivering your service and helps cement that value you offer, the level of expertise and seniority you have.

But some clients want to pay a flat fee – this helps them budget when times are tough and they need to keep a reign on outgoings. If your client does insist on this you need to be clear with them that if a project overruns or incurs more of your time than you are quoting for, there will be an additional fee that they must agree to this before you start the project.

You should also decide if you will offer variable pricing. This can work if you have distinct offerings (e.g. for me I have a 121 price that clients book by the hour and I am happy to discuss a package price if the client wanted to book 6 sessions up front). But I also have clients that book me to deliver training sessions for their organisations. These sessions require time to conceive and prepare the training as well as delivering it – so I work out a flat fee price for them.

What’s important is that you show some integrity and respect for clients when having pricing discussions with them.

Monitoring Prices

As you grow and scale your business you need to factor in increased costs (e.g. will you need to outsource more? Do you need to invest in better technology? etc) so it is prudent to look at your profits on a monthly basis and again enlist the help of experts if this is something you struggle with.

If you see competitors raising their prices, does it make sense for you to follow through – not always a yes, you need to keep a close watch on the mood of your clients. But if your type of services are more in demand now than they were and your competitor is still gaining new clients I’d say it’s a good time to raise prices.

When clients tell you what a bargain you are, or insist on paying you more for your time, then I’d hazard a guess that you really need to increase your prices.

Test out new services if you believe there is a need for them, based on client feedback and market conditions – these can help you create more turnover but keep checking they are profitable for you.

The bottom line is you owe it to yourself and your business to be really vigilant with your pricing. How you set your prices could be the difference between you succeeding – or failing in business. But always remember that clients are paying for your expertise and experience that no-one else can offer them and if they insist they won’t pay your worth – they aren’t the right clients for you anyway.

If you’d like some help understanding your worth, book a 121 session with me and I can help you work out what your unique value proposition really is.

ABOUT MOIRA BARNES

Moira is a long-time friend and founding member of MINT Business Club, who delivers sales training for our members. If you’d like to see more of Moira, sign up to MINT for regular training and content from Moira and other qualified and experienced sector professionals. Moira also offers one to one sessions which can help you get your ideas in order before you sit down to do the hard work. By doing this pre work it means you will have clear objectives and goals you can easily map out on your sales plan.

Sales: Why Is A Sales Plan Important?

Sales: Why Is A Sales Plan Important?

We all know we are advised to write a Business Plan when we start our businesses. So why should you also have a sales plan?

A sales plan focuses solely on sales – but specifically the strategy for how you are going to reach your sales goals.

What is the benefit of having a sales plan?

You (and any team you may have in place) will waste less time searching for sales but ultimately increase sales for your business!

It’s win-win!

What should you include in your sales plan?

Here I outline 10 key elements to include in your sales plan…

  1. Your mission and a bit of background to the business. While you may not currently have any team members, this could change in time (especially if you increase sales) so it is worthwhile having something that lays out what your mission is and where the business has come from.
  2. Target Market. It’s so important to understand who you really are targeting. Having a scattergun approach hoping you’ll attract the right leads is not going to cut it. It is really important to sit down and work out exactly who it is you are targeting with your services. Work out what their pain is that you can help them with. Think about the positives AND the negatives for this market so you can use this to your advantage. Knowledge is power!
  3. Outline what tools you will use to measure success. It’s important to have something in place whether this is a neat piece of software or a Google Sheet to keep track of who is in your pipeline/funnel – you can keep track of who is a prospect and who becomes a client. This will help you track your KPI’s (key performance indicators) as well as let you see at a glance who needs what from you (a follow up call/email proposal etc).
  4. Positioning. Where do you sit in your market? Take a look at who your competitors are not so you can suddenly come down with a bout of Comparisonitis but so you can work out what their strengths and weaknesses are. By knowing this you can position yourself better – you are armed and ready to highlight why you offer great value. Again knowledge is power/fore-warned is fore-armed!
  5. Marketing Strategy – sales and marketing sit side by side. The marketing helps drive prospects to you for you to convert into sales. So while you should have a separate marketing strategy make sure you refer to that in your sales plan (it can be a link to that document).
  6. Lead Generation – how are you going to get leads? You need to know where your consumers are coming from. How they found your service and what problem they believe your service is solving. A great way to understand this is to ask your current customers. This will help you understand how you should qualify potential sales and where you should be making that sales outreach.
  7. Action Plan – what are the exact steps you need to take to achieve your goal. Break it down by quarter (Jan-Mar, Apr-Jun, Jul-Sep, Oct-Dec) and then again by each month in that quarter. How many calls you need to make, how many meetings do you need to get in, how many subscribers to your email list if you have a conversion rate of e.g 2% (# of sales x 100 divided by 2). And make sure you keep checking in and reflecting on how this is working for you.
  8. Sales Goals – have these clearly displayed so they are easy to refer back to. Are your goals based on £ revenue or # of deals? Afterall remember “If you have a goal, write it down. If you do not write it down, you do not have a goal – you have a wish.” Steve Maraboli. Write it in this plan and then write it in big letters/numbers on your whiteboard!
  9. Outline who does what in the team – if you do grow the business to the point you need to either hire a team or outsource some help, be clear in your plan who is responsible for what part of the sales process. e.g. Do you do all the outbound calls but someone else deals with incoming? You don’t want to get to the end of the year and someone to say to you they didn’t think it was their responsibility.
  10. Sales Budget – can you assign any budget to helping you achieve your goal? E.g. investing in some CRM software, hiring in a VA to help you with inbound enquiries or how about someone to help you write your sales plan if you find it too overwhelming?

I hope that has given you a good skeleton to start building your sales plan. April and the start of the financial year, is a really good time to get that nailed. But it can be done at any point in the year. Make sure you regularly review step #8 The Action Plan to see if there is anything you need to add or if things are running so smoothly and you are ahead of the game, how you can maximise on that success.

ABOUT MOIRA BARNES

Moira is a long-time friend and founding member of MINT Business Club, who delivers sales training for our members. If you’d like to see more of Moira, sign up to MINT for regular training and content from Moira and other qualified and experienced sector professionals. Moira also offers a 1 hour Sales Breakthrough Call for £99 which can help you get your ideas in order before you sit down to do the hard work. By doing this pre work it means you will have clear objectives and goals you can easily map out on your sales plan.