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    2 Replies Latest reply on Mar 31, 2011 10:36 AM by LUCKIEST

    How to begin to price your services?

    ohdang888 Newbie

      So i'm starting a new business at

      http://www.crambu.com

       

       

      Now that i've buillt the site (need to revise a few things, still), my biggest issue is figuring out what my prices should be.

       

      I know this is something i'll havta decide for myself, but i'd like your advice, seeing as though many of you have done this before.

       

      My biggest competitor currently working MoFuse, here's their prices

      http://www.mofuse.com/plans/

       

       

      Here's my current prices:

      http://www.crambu.com/pricing.php

       

       

      The biggest issue is the Geolocation i see features. My competitor requires an enterprise account, which undoubtedly is at least $100 a month. Whereas my prices are much cheaper, but are by features. One other web developer i've talked to thought the prices were too high, but clearly people are going for it at MoFuse (and i'm not suggesting I could/can/will ever charge that much..). I'm pretty good at the web developer end of things... the business side is where I struggle and am looking to learn.

       

      Anyways, I'd really appreciate your input on my current pricing scheme: too high, just right, too low?

       

      Also, seeing as though many of you are business owners... whats your input on this? Do you see this as a service your business might realistically utilize?

       

      Thanks

        • How to begin to price your services?
          Barky Dog Tracker

          OhDang,

           

          At the end of the day the customer ultimately wants one of two things: 1) the cheapest price or 2) the best value for the money.

           

          In my experience it's a mistake to try and position your service as the "cheapest" solution available.  Unfortunately, that's what most new small businesses do, because it is often the easiest way to try and differentiate their product.  The problem is, in a few weeks another competitor will join the fray and undercut your already low prices.  Most small businesses will ultimately fail using this model.

           

          So, for a healthy small business (and bottom line) you've got to do the hard work and find ways to differentiate your product based on value.

           

          For your type of service, providing a free trial is the right way to go.   Get them hooked on it, so when the free trial is over, they don't want to lose the service.  Also, solicit as many testimonials as you can from these "early adopters" and display them prominently on your home page.  As an incentive, you could offer them three additional months free in exchange for theory testimonial.

           

          Those are just a few thoughts.  Good luck!

           

          -Barky

          • Re: How to begin to price your services?
            LUCKIEST Guide

            There are two objectives in pricing.

            Meeting the competition and making a profit.

            There are a number of guidelines that should be considered in determining price:

             

            Being competitive

            Making your business know

            Getting to know your market

            And getting to know your customers needs

            When costs go up - - raise your profits to maintain your margins

            Reduce your price when the item slows down in sales

            If you sell for credit - - you need a higher mark up.

            Customers expect special or sale prices from time to time