The thing about setting prices is that we think we are being paid for our time but that’s not actually the case.
Our clients are paying us for an outcome – not the time that it takes us to deliver that outcome.
By charging by the day or the hour we are actually incentivised to be slower – but delivering an outcome more quickly could be a lot more valuable to the client.
That being said, the time it takes to deliver the required outcome does need to be factored into pricing.
The key is to see your time as a business asset that you use to provide a service rather than something the client is buying from you. An overhead that needs to be covered as part of the price you charge for your services.
And sometimes less is more – clients will pay a higher price for a streamlined service.
I used to find this a really tricky concept to get my head around until one day when I was ordering a slice of cake for dessert at a restaurant.
I can’t actually remember what it cost but let’s say it was £7.
After it arrived it occurred to me that if I was buying a similar cake as part of my weekly shopping I would consider £7 to be quite pricy – and that would be for the entire cake.
And yet here I was, happily ordering a cake that cost £7 for just one slice – and if they offered me the entire cake for another £7 I would say no because I didn’t want it.
It’s all about context and expectation and on a different day in a different context the same person will be happy to pay more for what is on the face of it – less.
So please stop tying yourself in knots trying to figure out the ‘right’ price – there’s no such thing. There’s only the price that is right for you – the one that covers your costs, repays you for your service and provides an outcome for your client that they feel is worth the amount they paid for it.
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