Image by Sasin Tipchai from Pixabay
I talk a lot about pricing. I help companies to optimise their prices which improves their profitability, and I think that’s a good thing - strong companies can weather economic downturns, can pay a fair wage to their teams, can invest in training, and more. I strongly believe that companies should be remunerated for the value they deliver.
I recently posted a thought about how often a company should raise prices, and that it’s important to regularly review them. My post prompted this question from @JustynaGutowska:
Price increase amidst the pandemic has been rather tricky for me, though. And it's not because I tried and didn't succeed, but because I've not had the heart to do so. I was more in the "add more value for same price" corner, as I understood we all struggle and could do with some help. I'm really interested to know your view on this.
It’s an extremely good question, and I thought it deserved a longer answer than I could give in reply.
Of course, there are two meanings to ‘value’.
Obviously, one meaning is the value you deliver which should be related to the price you then charge. But another meaning, as my good friend Michelle Mills-Porter talks about, is what you stand for - your core values.
When you consider your pricing, you need to think about both meanings of ‘value’.
Right now things are tough for a lot of companies. Before Covid hit I quoted a retailer a multi £1000 fee for a pricing workshop. However, it's a retailer who I know provided free equipment to a charity that I have an interest in. So just recently I got in touch with them to tell them I would do exactly the same program for free, because I wanted to give something back.
I’m currently helping another business where the owner has gone through a particularly difficult time. I will let the owner decide how much they want to pay me, and have made it clear that I will be happy if what they pay me is zero.
Both of these are about my core values. They are about being part of a community, all pulling together, and all of those other cliches. I’m not alone, I know of many many people and companies who are doing the same thing. It's why lawyers do pro bono work, it's why people volunteer their time for good causes.
So charging the optimum price is important, but it’s not the only thing that’s important. Sometimes, when considering all the factors regarding an opportunity with a client or customer, something other than the highest price is actually the right thing to offer.