What Are You Doing to Increase Your Price Power Online?

If you’re feeling confused about how to price your services, you’re not alone. If you’re sweating the possibility of charging too much, you’re definitely in good company. If you’re obsessing over what the competition is charging, please STOP. You’re focusing on the wrong things.

Every entrepreneur operates within a unique set of internal and external constraints. Within those constraints, the entrepreneur must carve out comfortable but sustainable margins. Further, every small business is as different as its owner, a human being with his or her own short and long run objectives, most of which will not match yours. Then consider the fact that the majority of small businesses do not survive the first 5 years, indicating that the majority of small business entrepreneurs are not exactly ideal examples to follow!

The small business sector is dominated by sameness. Conforming to the standards set by your competition will only make your target market more price sensitive and ultimately put downward pressure on your rates. Who wants that? Set yourself apart with one thing: a focused marketing plan. Here are some tips to give your business what I call “price power.”

1. Niche. In small business, there is no other way to sustain healthy profits. Yes, you could try to compete with the big guns but you’ll go broke doing it. These companies enjoy economies of scale that are out of reach for most small business owners, and thus, they can do a lot more for a lot cheaper. Fight the aforementioned sameness and offer a well defined product that services the narrowest market niche while still earning you a profit. If you do this one thing, demand becomes inelastic your prospects will care not what you charge but rather how soon you can begin servicing them.
2. Get to the heart of the matter. Every single piece of business communication, bet it email, phone consults, or the copy on your website, must focus on the desires of your target audience and how you will satisfy them. Note here that I did not say “needs.” On their own, needs are too subjective. Desires, however, are the stuff of life. Desires are our deepest needs dressed in the emotions that make us human. And most buying decisions are emotional. So if you tap into your prospect’s desires, you’ve tapped into his pocketbook, and probably avoided a drawn out negotiation over price.
3. Do something that no one else does. It doesn’t have to be expensive or all that original. It need only be difficult to duplicate and economical to sustain. If what you offer is one of a kind but of high value to a specific group of people, price becomes moot. The easiest way to achieve this kind of advantage is by combining two or more skills into one service. For example, if you have a way with words and are an adept transcriptionist with a medical background to boot, offer to transcribe and edit presentations given by medical professionals.
4. Be straight up, but especially if you do business online. Clarity promotes trust. A lack of trust makes people clutch their pocketbooks, not open them. Additionally, most business people operate on information overload and are quick to mentally trash anything perceived as irrelevant, vague, or just plain dull. Be pointed with exactly what results you will deliver, how you will deliver them, and to what benchmarks of success results can be measured by.

These tips for increasing your price power are simple, effective, and cost nary a penny. You need only to invest your time and most ambitious intentions. Remember, you’re in this for the long haul. Leverage your strengths; don’t be intimidated by competition; and focus on what you can do profitably in the here and now.

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