Profit From Value Pricing, The Best Picing Strategy.

How much do you charge to make a healthy profit?

It is difficult to decide on a price, and too easy to lower your price so that your customer will buy your product or service. What you should really consider is “what is valuable to your customer?” and “How valuable is it to your customer?”

If you can show your customer how they will get back more than what they put in, the amount they put in is not as important (as long as they can afford it). This is the best pricing strategy. Always charge as much as you can, while still showing your customer how they are getting a great deal!

Here is an example that will show you how to be profitable. You figure that it will take about two hours making a video advertisement for a customer. It is a very simple idea, and only requires $30 in props. How much do you charge? There are a few things you need to consider:

1) what is the customer’s budget? Ask them! Remind them that they need to save some money for promoting the ad, or buying advertisement space.

2) Take one third of the budget. Does that much money pay for enough time and material that you can complete your work?

3) What does the customer get out of it? Make sure the customer knows this, and gets excited about it. Remember, this is their initiative, If they want a product or service, it is because they want something out of it. For the example we are using, the customer might expect to make 5 sales worth $10,000 in profits from people that visit their website. Can you give them what they expect? If not, that is ok! You just need to manage expectations, and explain the value that they are getting. First ask them “how many people need to visit yourwebsite to make a sale?”  Based on this number, you will know how many people you need to send to get 5 sales.  Even if they do not make 5 sales, as long as you make sure they get the number of visitors they expect, they will feel like you did your job.

I will probably add to this post later… It’s getting kind of late.  See the copyright notice in my last post, it applies to all posts.