How to Price New Services

If you haven’t done that, well, you can stop now because much of what anyone tells you won’t make sense and you’re probably one of those who make grandiose statements such as, “I am too busy to waste my time reading what someone had for lunch on Twitter.” If you want to continue in business however, you just might want to take those steps.

If you have, then how do you take the jump from proficient amateur to actually getting paid? And what price do you charge? It’s really simple.

One, start with a good customer with whom you have a good relationship and who needs to have a better marketing program. Approach them sorta like, “I have this new stuff which has worked for me … I don’t know if it will work for you … but I’m looking for someone who needs what it does which is where you come in because it appears to me you do … and I’m trying to learn more about it … and I thought if you would be interested that we could do a joint venture over the next three months (extremely important that there be time limit and shorter is better but long enough to get results) … I will be willing to do the work but I do need you to share some costs … I would say we’d need a budget of $xxx … price needs to be low enough they can’t refuse but high enough to at least pay for your direct costs … $500 set up and $200 a month for three months …. $1,100 total … lower if you’re uncomfortable or higher … remember the point is you need experience and a referral …

A side note here. Never do it for free. The customer must have skin in the game to take it seriously so they’ll actually get results and be a good referral. You can’t love their business more than they do.

Then specify what do you do? Assess what the client needs. If you don’t have some good ideas, then you’re not ready to turn pro; rather stay as an enthusiastic amateur until you have more of your own expertise and ideas to help others.

Let’s just say this customer needs: a more robust website with an auto-responder; once a month email newsletter broadcast; website main product feature update every two weeks; one or two RSS feeds supplying the site to keep fresh content popping up; some sort of weekday tweet once a day which also hits their Facebook Business Page; and a printed monthly newsletter along with mail list management (and a plan to gain followers).

Okay, you can price the printing and probably the mail list management. But what about pricing the rest of the stuff? You can’t price it for you have never done it. That’s specifically is why this is a short-term deal. Our original offer was $500 and $200 a month for three months. At the end of three months you may continue or change the price but increasing it greatly will be hard to do with this customer.

That’s why you start another customer in the same program but you increase your price. As you gain there, then you do a third one and increase your price again. Main point is you lock in each price for a short while with few customers and raise them each time as you gain experience and pricing backbone. And note, at some point you will like to continue doing business with number one, but you won’t be able to afford to do so at that pricing so you either drop them or raise their price to your current price level.

After a short period, you will be able to more intelligently price your service for you will find what customers are willing to pay on whatever you offer. From the customer’s view, they will substitute paying you for paying the radio station or newspaper. It’s all about getting a piece of the advertising budget.

Oh yes, a couple of cautions.

Select customers that actually have an advertising budget. Don’t try to teach business owners who don’t advertise to do so. It’s far more productive to compete for a piece of existing funds.

And second, please don’t allow your graphics person to be the only person to learn how to do all of this on your dime. You have to be personally involved and know why an email broadcast looks different in different browsers. That’s a dumb owner trick because you will either end up being hostage or your graphics person will leave and starts their own thing after they are trained.

Hope this helps.