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Digg it UP - Setting Prices - Pricing Your Consulting Services
Sales management is an integral sub-system of marketing management. It translates the marketing plan into marketing performance. Sales management is hence described as the muscle behind marketing management. The sales manager in a modern organization holds a multitude of responsibilities. He has to plan, direct and control the personal selling effort of the firm. His task does not stop with the achievement of sales quotas. He is also responsible for bringing in the required profits. In addition, he is also responsible for creating the desired image for the company and its products. In fact, a modern sales manager has to do marketing rather than mere selling.His firm expects him to assume a much larger role than the traditional responsibility of achieving sales quotas. It expects him to be customer-oriented as well as profit-directed. Sales managers set sales goals for their sales teams and bear the brunt of the responsibility for achieving the set
PRICE
There is absolutely nothing positive about competing on price, unless you specifically position yourself as a low-cost provider. Certainly, there is a market for the discount provider, but I believe this only works if you have a very high volume of transactions. As a service provider, the only sensible route is to obtain premium prices for your services.
No matter what you charge, there is
Starting and owning your own business can be a very gratifying experience if done correctly. If done incorrectly and without the proper preparation, it can be a nightmare. Since competition in most businesses is fierce, you must become an expert at your business and develop a niche in your market.Listed below are a few of the most important tips potential business owners need to consider before starting a business. Your preparation should be long and thorough. The more extensive your preparation is, prior to starting your business, the greater your chance of success.Consider the following to start:1— Make absolutely sure there is a market for your product or service, research the need for your product or service through your local chamber of commerce or library. Librarians are helpful with finding research information.2— Use online business guides, for top business links.3— Interview several veteran business owners in yo
In case you hadn’t noticed, people can react very differently when faced with the same price for a product or service. In fact in most cases, we’ll never actually know what is in their minds when they consider a price and then decide to respond to it in certain way. So what does that mean for those of us pricing and selling our services out there in the market?
Typically, people who sell services go for an hourly rate. They use a process called “reverse competition” to determine what their rate should be. This is where you take a look at what your geographical competitors are charging, and you decide where in the range you want to fit on the spectrum of hourly rates. Inevitably, we choose a rate somewhere in the middle, so we can say that we’re not the most expensive, but neither are we the cheapest!
What kind of message are we sending out to our clients with this approach?
We’re showing absolutely no differentiation from any other company – just sticking ourselves straight down the line. In other words, we compete with everyone! Not a very prudent marketing decision.
So pricing simply using an hourly rate that sits in the middle of the spectrum is, in my view, a wasted opportunity to create a point of difference with your offering. Let’s think more broadly for a minute about what we are actually offering to your clients: Regardless of what our specific offering is, we all offer some combination of:
Quality, Price and Service
QUALITY
Quality has become an expectation - the minimum you need to be in the game. It is similar to a high school degree - no one cares if you have one, but watch out if you do not. Quality is no longer an effective differentiator. So if you are going on about the exceptional quality of your service in your promotional material and sales pitch, just realize that in your customers eyes, you are not differentiating yourself in any way.
After all, no sane company is going to advertise the fact that the work they do is of average or low quality. It’s all high, isn’t it?
PRICE
There is absolutely nothing positive about competing on price, unless you specifically position yourself as a low-cost provider. Certainly, there is a market for the discount provider, but I believe this only works if you have a very high volume of transactions. As a service provider, the only sensible route is to obtain premium prices for your services.
No matter what you charge, there is
Rewards Programs? What are they really selling? For those of you who are indecisive when it comes to travel incentives it’s best to understand what travel companies are selling. Like many companies of the travel industry the essence of success is relationship marketing.Rather than the ticket that they are selling, Travel Industry such as airlines focus a lot on the marketplace. A main tactical marketing program in the airline industry is the frequent flyer program that is supposedly solves the problem of customers’ brand loyalty. Each airline developed a unique core set of tactical marketing materials in their frequent flyer program scheme to address each member of a target market. In achieving brand loyalty, frequent flyer programs are generally provided under an alliance to expand their marketing product. Some even develop exclusive membership to increase the value of program members.With the dozens rewards offered from frequent flyer prog
What kind of message are we sending out to our clients with this approach?
We’re showing absolutely no differentiation from any other company – just sticking ourselves straight down the line. In other words, we compete with everyone! Not a very prudent marketing decision.
So pricing simply using an hourly rate that sits in the middle of the spectrum is, in my view, a wasted opportunity to create a point of difference with your offering. Let’s think more broadly for a minute about what we are actually offering to your clients: Regardless of what our specific offering is, we all offer some combination of:
Quality, Price and Service
QUALITY
Quality has become an expectation - the minimum you need to be in the game. It is similar to a high school degree - no one cares if you have one, but watch out if you do not. Quality is no longer an effective differentiator. So if you are going on about the exceptional quality of your service in your promotional material and sales pitch, just realize that in your customers eyes, you are not differentiating yourself in any way.
After all, no sane company is going to advertise the fact that the work they do is of average or low quality. It’s all high, isn’t it?
PRICE
There is absolutely nothing positive about competing on price, unless you specifically position yourself as a low-cost provider. Certainly, there is a market for the discount provider, but I believe this only works if you have a very high volume of transactions. As a service provider, the only sensible route is to obtain premium prices for your services.
No matter what you charge, there is
If you want to succeed at negotiations, you need to understand that negotiations are like a game. And, just like any game, the prizes go to the side that understands the rules and plays better. Here are 8 rules taken from the game of squash that can be applied to the game of negotiations.Rule 1: Get Fit. Good negotiating is an art that is learned from experience. Like any game, the more matches you play, the fitter you get. Fortunately, you can practise negotiations in everyday situations, from booking a holiday to buying a car, to ordering a meal. And then you should let your experience be your teacher.Rule 2: Seek An Advantage. All games are defined as interplays in which one side seeks an advantage over the other. It's the same with negotiations. Every move you make should be aimed at securing an advantage over the other side.Rule 3: Follow the Ball. In squash, it is what happens to the ball that matters not wh
So pricing simply using an hourly rate that sits in the middle of the spectrum is, in my view, a wasted opportunity to create a point of difference with your offering. Let’s think more broadly for a minute about what we are actually offering to your clients: Regardless of what our specific offering is, we all offer some combination of:
Quality, Price and Service
QUALITY
Quality has become an expectation - the minimum you need to be in the game. It is similar to a high school degree - no one cares if you have one, but watch out if you do not. Quality is no longer an effective differentiator. So if you are going on about the exceptional quality of your service in your promotional material and sales pitch, just realize that in your customers eyes, you are not differentiating yourself in any way.
After all, no sane company is going to advertise the fact that the work they do is of average or low quality. It’s all high, isn’t it?
PRICE
There is absolutely nothing positive about competing on price, unless you specifically position yourself as a low-cost provider. Certainly, there is a market for the discount provider, but I believe this only works if you have a very high volume of transactions. As a service provider, the only sensible route is to obtain premium prices for your services.
No matter what you charge, there is
1. Optimizing processes Documenting and standardizing processes to minimize exceptions and improve efficiency. Staff should always be knowledgeable on these processes.2. Control environment A key finance function objective is protecting assets. Ensuring critical controls, policies and procedures are in place is crucial, while at the same time not creating bottlenecks in the organization.3. Optimizing available technology Ensuring processes are appropriately enabled by technology and new functionality is constantly incorporated into existing processes in a controlled manner. Staff must be knowledgeable on the technology.4. Performance management Another key objective of the finance function is creating value. This is possible through appropriate reporting, information visibility and performance measurement systems for the organization.5. Compliance >
QUALITY
Quality has become an expectation - the minimum you need to be in the game. It is similar to a high school degree - no one cares if you have one, but watch out if you do not. Quality is no longer an effective differentiator. So if you are going on about the exceptional quality of your service in your promotional material and sales pitch, just realize that in your customers eyes, you are not differentiating yourself in any way.
After all, no sane company is going to advertise the fact that the work they do is of average or low quality. It’s all high, isn’t it?
PRICE
There is absolutely nothing positive about competing on price, unless you specifically position yourself as a low-cost provider. Certainly, there is a market for the discount provider, but I believe this only works if you have a very high volume of transactions. As a service provider, the only sensible route is to obtain premium prices for your services.
No matter what you charge, there is
Have you ever noticed how successful people always seem to have a very wide net of friends and acquaintances? Howard Hughes became an infamous recluse only after he was fabulously wealthy. His network of business associations enabled him to excel in aviation, manufacturing, heavy industry, oil, movie making and hotel/casino ownership. He tapped into the best managers, engineers and executives available within each industry he tackled to manage his properties and provide essential expertise.Most people are very lucky if they have two or three truly close personal friends in a lifetime. Do not confuse personal friends, friends and acquaintances. An acquaintance is a person we see from time to time, know in passing and have some basic knowledge of their background. A friend is more likely someone we socialize with, invite into the home and make an effort to schedule onto our social calendar. The rare personal friend is that person to whom we will divu
PRICE
There is absolutely nothing positive about competing on price, unless you specifically position yourself as a low-cost provider. Certainly, there is a market for the discount provider, but I believe this only works if you have a very high volume of transactions. As a service provider, the only sensible route is to obtain premium prices for your services.
No matter what you charge, there is always someone, somewhere, willing to perform the work you do for less money. Customers are value conscious, not price conscious. They look to do business with people they feel give them more than they are paying for. So the goal for the service provider is to make sure the customer perceives the full value of the service, not simply the price component.
Its accepted fact that many customers will equate high price with high value - especially when there is very little else to judge your value on.
Wise consultants know that if they price their services at the low end of the market, customers do not take their advice seriously. On the other hand, if you charge rates on the upper end of the spectrum, the customer will hang on every word you say and has a higher probability of implementing your suggestions. This of course has a proviso that you are offering a great service, rather than a mediocre one.
Sometimes the biggest hurdle to get over when considering charging premium pricing is our own attitude. Do any of these sound familiar?
‘I can’t charge those prices – my customers will all walk away!’ ‘My service isn’t worth that much’
As long as you stay in that mindset, you’ll never make the transition to high end pricing. You must truly believe the value of what you offer - after all if you don’t, why should your customers? More on this below in a discussion about articulating the value of what you do.
If you are selling good advice, and your customers listen carefully and implement it - they will be more successful and thus will value you that much more. It is a cycle that spirals upward: The more you charge, the more people follow your suggestions, the more profitable they become, the more valuable you are to them. This is a vicious circle that you definitely want to be part of.
SERVICE
The third component of your offering is service. In today's world, service is the ultimate differentiator and separates successful companies from mediocre companies.
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