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Pricing: Are You Being a Con Artist Without Knowing It?

It doesn't pay to sneak around your pricing; stating it up front is a better way to go.
It doesn’t pay to sneak around your pricing; stating it up front is a better way to go.

A short while back we wrote a post about why your final price should include GST, and just recently we talked about how you should structure your prices, so we thought we would add to these and talk about whether you should make your prices freely available on your website.

The internet has changed the way we do many things. It’s changed the way we bank, communicate and work, but if there’s one thing it’s almost entirely revolutionised it’s the way we shop — particularly the way we shop for professional services.

Divulging Your Prices

With the internet at our fingertips — on our computers, smartphones and tablets — we can quickly search any business, any time we like. It’s the first thing most of us do before we pick up the phone to call that business, so it makes sense to provide as much information on your website to encourage people to actually make that call.

Yet, many businesses do not. The most common thing missing from a company’s website: the price. This isn’t uncommon in professional services sector. But it doesn’t mean it’s right, either.

There is not a single business that doesn’t have a basic price structure set out for each service they offer, whether they’re an accountant or a plumber — and, frankly, any business that doesn’t is not a very successful one.

Subject to Change Pricing

Even if your prices are subject to change based on the additional services your clients require, put that basic price on your website and mention the fees for each additional service.

You’ll not only establish a point of difference between you and your competitors, but it also demonstrates transparency. Your potential customers know that they’re not going to get a different price depending on the time of day or day of the week they call you.

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At the end of the day, unless you’re hiding something, there is no reason why you shouldn’t put your prices on your website. We cover pricing in depth in our Small Business Management Course.

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When Should You Work for Free?

It's ok to do work for free, but your clients should be made aware of the extra value you're adding.
It’s ok to do work for free, but your clients should be made aware of the extra value you’re adding.

In our Small Business Management Course there is a module on determining and setting your prices, which includes factoring in things like travel expenses if you’re going to be visiting clients and so forth. But what about things like, installation costs – should you bill your clients for this or work it into the price or just let it slide?

Some businesses work those sorts of prices into their final cost; others – think Foxtel, for example – charge installation fees; but a surprising number of businesses let it slide.

We don’t think this is necessarily a bad idea, though we don’t think you should leave this kind of added value go unnoticed by your clients, especially when you consider some companies charge you for everything – from customer support to installation of their product.

It’s not just big players like Foxtel, either. Consider any time you need some form of legal help, be it a letter sent on your behalf or a consultation, you’re billed for that lawyer’s time. The same goes for the medical profession.

Let Your Customers Know What You’re Adding

When you’re starting out, however, it can be hard to do this because usually you’re just hungry for that first customer. That’s why we think it’s a better idea to do some work for free, but notify your customers of this added value you’re providing at no additional cost.

This also enables you begin charging these clients for that additional work at a later date – so long as you give them notice beforehand, of course. By doing this, you’re not only establishing a way to later bill people for time that will eventually become precious as your business grows, but you’re also establishing yourself as a competitive player in the marketplace.

In this sense, doing work for free can be very good for business. By the same token, you can also use this approach when clients ask for discounts or price reductions on your products or services.

Rather than giving them a discount, think of ways that you can provide them with added value without discounting your prices, just as car dealers or some IT resellers do when you ask for discounts.

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Next time you’re thinking about your prices, consider outlining any potential added value that your customers and clients aren’t being billed instead of discounting or giving price reductions.