When was the last time you rejoiced at receiving a letter from your insurance company informing you that your premiums were increasing? How happy are you when you purchase an item you really want, and then return to the store a week later to find that the item is now 50 percent off?
As a customer, changes in pricing have never made me happy, but as a business woman and market researcher, I know that they’re sometimes necessary. A recent customer’s surprise at the total on his invoice prompted me to ask other people in my industry who work with my direct competitors how much my direct competitors were charging for their services.
I found out I was grossly undercharging for my services. This is a result of several factors. 1) In my original business plan, I thought the bulk of my business for Research Works would come from a different set of core services. 2) I wanted to be a strong competitor, and as a new business, I thought something like a mega-sale forever would attract business. 3) I researched some competing freelance copywriters, writers, and editors on the internet, but because none were local, I took my MSA’s cost-of-living into account and came up with prices much lower than the prices for larger cities. 4) My niche customer and my mission were almost non-profit in nature; I sincerely want to help people, and the people who I thought in my original plan would want my help the most would likely need lower prices.
But the people who were more established and who wanted to do business with me couldn’t because with those prices – which were 50 to 75 percent below the average for the market – there was no way they would take me seriously.
I’m now pricing at about 15 to 30 percent below the average for the market. Potential clients will see it as a great deal, but with the established clients, I had to make a choice: grandfather them in at the old rates or inform them of the increase – either via letter (the appropriate way) or by telling them the next time they call – and let them decide if they want to continue to do business with me.
I chose the latter. After talking with a business mentor, I decided that I have to value my own expertise and my time. Everyone pays for services they can do themselves. They just don’t have the time to do them, or they can’t do them as well as someone they would pay to do it. I’m saving my clients time, providing them with high-quality service that goes beyond their expectations and that surpasses their capabilities, and I’m charging less than the current market rate. And when I put that in writing, I don’t feel bad about it at all.
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