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How I price my service offerings
Manage episode 430082529 series 3522273
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Did you know that 92 per cent of women in business make less than $100K a year in revenue? A large part of this is simply due to not knowing how to price their service offers properly.
I want to see more women making more money—not just for the sake of it, but because it leads to more choice and freedom in your business and life.
First things first, I want us to stop charging an hourly rate. Charging by the hour can cap your earnings and make it difficult to scale your business. Let’s say you want to make $100K a year, work 40 weeks out of the year, and work for 30 hours each week. Your initial calculation might lead you to believe you need to charge $84 an hour. But remember, you won't be billing all 30 hours. Between marketing, social media, bookkeeping, and other tasks, you'll likely only be billing 20 hours each week. So let's revise that to an hourly rate of $125.
Even though we don't want to charge by the hour, understanding this helps us see the value we need to attach to our time and services.
Introducing Tiered Pricing Models
Now, let’s talk about a tiered pricing model. This involves offering multiple levels of your service, each at a different price point. Money psychology teaches us that if a person is presented with three options, most people will pick the middle option. Your tiers could look something like this:
- Basic: $100 per month
- Standard: $200 per month
- Premium: $400 per month
You can offer different sets of features or benefits for each tier. For example, your basic tier could offer essential services, the standard tier offers more comprehensive services, and the premium tier provides the complete package for those willing to pay extra. This way, you attract a broader range of clients and maximise your revenue without significantly increasing your workload.
Consider implementing a tiered pricing strategy in your business to give yourself more stability and focus on trying to achieve the MRR (monthly recurring revenue) number that will get you to the 100K per year goal. It can take some time to figure out the perfect tiers for your service, but the effort is well worth it.
LINKS:
For a copy of Emma's book, 'Go-getter: Raise your mojo, shift your mindset and thrive' – https://www.emmamcqueen.com.au/book/
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