Nevertheless, I have learned a few things about pricing…
I have been selling consultancy services for over 23 years. There are scars on my body to prove it.
One lesson I’ve learned is never to offer a prospective client a single price point for your freelance or consultancy services. Instead, offer a range or bundle of services. Package A, Package B, or Package C and so on.
Perhaps you already knew this, you clever freelancer you?
If you do, please stop reading and watch another “I identify as a dog” video on Instagram or Snapchat.
For the rest of you, here’s why you should never have a single price point for your freelancing or consultancy services.
Offering a single price point forces your customer to make either a ‘yes’ or a ‘no’ decision. Pretty obvious, I guess.
Unfortunately, your single price point pushes the client into either one or the other corner. They can either pay for it. Or they won’t. There’s no wriggle room.
That’s not good.
Your prospect may try to negotiate with you. That’s always a possibility. However, it’s a topic I’ll come back to another time.
I suggest you always offer prospects several price points for them to choose from. Prospects can then ask themselves, ‘which package of services can I afford and which one looks the best value?’
Many times, the prospect will purchase more than you expected. Indeed, they often choose the most expensive version. This is because, as I’ll explain, your standard offering now looks like a bargain.
Another advantage of several price points or bundles is that a customer who can’t afford a great deal can still buy from you. This means they still get value, and you start a business relationship. You also get extra cash you may have lost.
This is called ‘win-win’.
Why consultants and freelancers don’t always offer a bundle of services
Unfortunately, many consultants and freelancers use a single-price structure.
Here are three reasons why:
- In their minds, customers will either want or won’t want what they’re selling.
- Consultants and freelancers don’t know much about the psychology of pricing.
- And they don’t take a lot of time to think strategically about pricing.
So, let’s fix some of these problems and make more money while we’re at it.
Here’s how to step by step:
Step 1: Create a cheaper version of what you sell
Start by giving your prospects a basic service so that they can compare your standard offer to (see below).
Don’t do this your standard service offer can look expensive. Instead, your mid-range service feels like a steal if you have a down-and-dirty version of what you do.
Think about how you can deliver some benefits of your standard package but at a lower cost. Whatever you do, however, don’t downgrade the impact or quality of your services.
Instead, consider ways to help your prospect without wasting too much time or effort.
For example, imagine a prospective client who wants to run an in-house course, but cannot afford your workshop fees. You could offer to run a shorter and less expensive virtual workshop here. Or sell them access to the recordings of a previous workshop.
As another example, you may offer expensive face-to-face consultancy.
A cheaper alternative would be to provide your prospects with workbooks and guides so they can do some of the work themselves. You could then support them with two hours of Zoom calls instead of your usual two-day intervention.
Step 2: Create a mid-range offer
This is your standard package. You provide this type of service all the time. Obviously, you adjust the price depending on the number of days you think a project will take. However, your day-rate remains pretty consistent.
As discussed, a mistake here is that your standard offer can look costly without a lower-cost version to compare it to. Better still, your standard offering becomes the sensible option when prospects check out your top-of-the-range package (as below).
Step 3: Create a ‘gold-plated’ version of your services
Lastly, consider how you might create a super-duper version of your services.
Map out the extra benefits you can provide. These add-ons should go way above and beyond your standard package. Bells and whistles might include increased access to you, personalised support, a private log-in area for clients, or free training and workshops.
In my experience, this gold-plating is often what you already provide to clients. It’s level of service you deliver when you’re starting out and learning the freelancing ropes. Or when you’re not disciplined with your time and give customers more than they pay for.
We’ve all done it.
An easy way to add extra value is by leveraging your low-cost version. Suppose, for instance, you are hired as a management consultant. You could give clients free access to your online course, plus all the workbooks and guides from your lowest package.
Another advantage of bundling is that you can always nudge demanding clients to take your top-of-the-range service.
You can even offer only your costliest to deter those impossible-to-please clients from buying from you. Be warned, however, that these demanding clients will sometimes take you up on your gold-plated version!
That’s why I’ve got scars.