Pricing Strategies… What is the perfect balance?

The area where I reside is very urban. It’s in a downtown area where parking is scarce. Recently, the parking lot where I park and the building I live in manages was sold to a developer. Yet another rental complex being built in an already overpopulated area…. YAY!!!

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So this set me on a search for new parking arrangements within a reasonable vicinity of my condo. There are a few lots – all very small, but suitable. All of them are outdoors, offering no protection from weather conditions or vandals – yet on average the monthly rate to rent a space was between $60 to $75 a month. Over a 1 year period, that’s close to $1,000 dollars – just to park a car!!!!

This little exercise got me thinking about pricing strategies for Bedford Street Marketing, LLC and the overall topic of pricing in general. There are many who will say charge what the market bears – true free market ideology.  However, how does one reconcile that with knowing that market rate is sometimes grossly overstated and in fact, a rip-off to customers? So, here are the initial thoughts I have on pricing strategies I want to employ as a business owner.

Superior Service:

No matter what the price you settle on, the most important thing is offering premium service all the time. It is my opinion that doing your best work is not tied to a price tag, but personal pride. If you, as a marketing agency, can improve results, increase the brand awareness of your client and make the product/service being offered recognizable, then you have succeeded. The only job you have, regardless of how much is being paid, is to do what I just stated.

So, tenet #1 in my pricing strategy is quality is never sacrificed. If a client pays a discounted rate or top pricing – they get the same service level. All clients are equal and the big dollar ones should not get treated differently.

Market Research:

I’ve been doing some research into what the average price per hour for marketing consulting services. Interestingly enough, it is rather high, in my opinion at $100 to $150/hr. The same goes for $1,600 to $2,000 to build a website/landing page and worst of all, $600 to $800/month for social media management – with a cap on the number of posts!!! WTF?!!!!

I know the amount of time and work it takes to do all of the above. If a marketing firm is a home business or a single proprietor – the above rates are way too high. Yet people are willing to pay them – which is even more confusing.

Based upon this research, ideas began to percolate in my head about concepts like perceived value and if clients really know what they are paying for and how over-priced these rate actually are. It seems that there is a societal blind spot that makes people think if something costs more – it must be better. But we all know that if you go into CVS and need antacid – Prilosec costs $28 for a two-week treatment, while the CVS brand (with the same active ingredients and is the same product) is less than half that price. Yet, people buy the name brand and that is pure illogical to me. It makes me thing that people are like the Homer Simpson image below:

homer

There also is the societal responsibility angle. In good conscious, I am not sure how some business owners sleep at night knowing they are clearly overcharging customers. Sure, there will be justification about overhead and the value of their time – but if you think $600/month for 6 posts a week and 24 a month is fair – I seriously question your morals and business ethics.

As a logical person and someone who sees things differently, I need to know that I am making a decent profit – but not price gouging. After my research into other’s pricing, I knew what I wanted my pricing to be – fair to the client and fair to my business. As cover image shows, it has to be a Win-Win for both parties or something is wrong.

Premium Marketing Service for Affordable Rates!!!!

Knowing I aim to provide Premium Service all the time married with my belief that pricing has to be a Win-Win for both business and customer – I am going with Premium Service for Affordable Rates as my pricing mantra.

If others want $100 to $150/hr for consulting, I think $50/hr is where I want to be – with $35 to $40/hr for non-profits. If $1,600 is the rate for website design, I’ll set my price at $400 to $500 flat. The goal here is to try to break through the mindset that expensive is better – and make clients see that getting Premium service at lower rates is a better deal. It’s more bang for your buck.

Additionally, it makes packaging more services easier because the rates are fair and in line with the actual work and time needed to complete the tasks. So, end of day that is how i am tackling the sticky question of pricing my services.

 

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