How much you charge for something may not have any direct impact on your sales and profits. If you charge $1,000 an hour for services, but if no one accepts it, then the high fee becomes a path to low sales and profit.
- If you have no one looking for your product or service, you will use a "pitch" to convince someone there is a need and get a sale.
- If there are buyers who are hungry and searching feverishly for your product or service but see a large buffet of choices, you will send the message about how your product or service is either: the best quality, the cheapest, the most valuable, the fastest, the most trustworthy.
- If your business is one of a kind and people need you more than you need them, I hope you hear them knocking at your door.
Charging by the hour will leave any entrepreneur open to hiring someone else offering a cheaper price.
Example:
Social media managers are in abundance. Check it out. There are 34 million results when you search for "social media managers".
Who's looking?
Look deeper for who is searching for social media managers and what words they use. As we do so, we will think of a product or service.
As you look at the screen shot, note the competition is HIGH for almost every term.
The next action step
If you are a social media manager, you will want to keep your prices low and if you do everything yourself, you will most likely have your time filled with daily tasks. One solution is ODesk.
ODesk is both a blessing and a curse. If you are a social media manager and expect to "charge a premium" for your services, you are in direct competition with Fedora. Fedora has a rate of $3.33 per hour. Can you compete? What is the return on investment for your service?
The blessing comes when YOU hire Fedora and outsource work to her as a social media management company. You will be able to compete within a hyped market where EVERYONE seems to be a social media manager. You will be thinking like a business owner instead of a hired hand and you can grow business. Your competition will not understand why they are always behind the curve.
The risk
How long will it be until the customer reads this article and understands how they can save money by hiring Fedora directly? With high competition and a range of skills among social media managers, where people charge money for using FREE social media tools, you better have a track record to show your awesome social media marketing services success.
Charge a monthly service fee and create a very long list of benefits. Track the results every week and send a success report. If your product or service will improve sales by 10% or lower refunds, you can raise your prices every year.
The tool is not the most valuable asset, it is your ability to wield the knowledge and execute well.
Charge what you will. Understand the world is smaller and your competition is around the globe.
