How to Price New Services

How do we price something that we’ve never done before? It appears to me that many business owners worry more about how to price a new product/service than they do learning about how to do it in the first place. Web sites, social media, QR codes, email broadcasts, shopping carts as well as Twitter, Facebook Business Pages and LinkedIn pages all come to mind. How do you price such a service for customers? First, understand you can never accurately price something you haven’t done before. Second, you need to know how to do it before you worry about pricing. And third, it’s hard to learn on the customer’s nickel but that’s been the tradition in the printing industry. Going far afield however requires a better approach and I have a suggestion of how to do that.

So what do we hear in the trade press about pricing social media? Hum, value to the customer and substitution pricing are the primary responses. Charge what the market will bear. Hum. Okay, I agree, but how do know what that is? Well, bear with me and I’ll give you one way of getting there.

Are you old enough to remember your first coated offset job on your AB Dick 360? If you’re not, then you don’t know that coated offset had a nasty habit of sticking to the blanket cylinder, being projected into the ink train and wrapping tightly around ink rollers which created that irritating slappy sound.

Well, if that didn’t happen to you I’m sure you have had an equally interesting training experience. You see, we small business owners (not just printers) train on live jobs. We simply do not allow training time for anyone to actually gain skill in whatever it is we’re doing; rather, we buy a piece of equipment and then expect it to produce saleable work instantly.

I was in a plant installing a multi-million dollar six color press and the owner was pressuring the installers to cut short their test runs saying he would sign whatever they needed just so he could get the press online and get the work out that needed to go that afternoon.

On the flip side, I know printers who have always stayed with what they’ve always done because they were fearful of losing money by doing anything else. And since they didn’t know how to do that anything else, they didn’t and aren’t around because the processes passed them by.

Nether life or printing should work that way, but it does.

Okay, how do you break the logjam?

Start with the premise that you really don’t know how to do it. Even if you are just buying a different press, schedule your operator to run enough jobs so they can become proficient. In the real old days we would save a pile of photos so the newbie would have photos to learn how to shoot halftones. Add to that a box of film and lock them in the darkroom until they knew how to “bump” one appropriately. Usually took about a day or so. Point is, in learning to do anything it is the intensity of the effort that is required especially if no one in the shop knows how to do the new task, let alone price it.

Let me admit one thing here. If we are expanding into familiar territory such as buying a press; it’s far more doable to stretch and learn on the customer’s nickel.

What do we do when it comes to a real game changer like: the Internet, social media, Twitter, etc. All the gurus are yelling at us to become marketers and social media experts. Let’s assume they are right for now. How do you do that?

Ground work: I assume you’ve gone through setting your website (hope you bought a canned program and made it work instead of building it from scratch) and you’ve begun using Twitter and Facebook and LinkedIn and survey software and more. That’s the first step.

Then you’ve also taken the second step of actually reading a few of the million or more books on the subject of social media. And you have even gone so far as to establish your own on-line presence (profiles including, yes, pictures of you) and set up a Facebook and LinkedIn business page and you feel comfortable with this and are ready to take the plunge into selling marketing services.