Digital marketing isn’t just about SEO, pay per click or Facebook ads. It’s also about understanding how to correctly price your products and services.
I remembered my first freelance SEO contract I closed, it was $9000 for 6 months of work. That sounds really good: wow, you made $9000 in just ONE deal. However, if you did the math, I was still undercharging myself. I had agreed to be the equivalent of the company’s: website designer, content writer, SEO consultant for $1500 a month. That was lower than a diploma holder’s pay in Singapore.
Business creatives like myself often have problems with pricing.
First, you’re uncomfortable with pricing, secondly, you just don’t know how to. There are just so many variations, there are different products at different price points, your competitor’s charges, requests for discounts and etc. So how do you navigate through pricing strategies?
Pricing Based on Competition
The FIRST pricing strategy I despise is: if my competitor is charging X amount dollars, I am going to charge X minus $1, and it’ll out price him. I learnt this early in my investing career to never compete based on price. Warren Buffet, the wealthiest man in the world proclaims that he invests in business that don’t compete in price, Well, you surely shouldn’t be starting a business that is competiting on price.
I once had an SEO client show me 2 other quotations from other SEO companies and said: look, this is what your competitors are charging, you’ll need to match their price, or we won’t purchase from you.
Despite educating them on good SEO versus bad SEO, they were quite adamant on me matching my competitor’s price, citing reasons like: they’re certified by Google, ‘this is the market price’ etc.
This is why most business owners in Singapore end up paying $500 for some cheap SEO Indian firm, fail at it and call SEO a scam.
The second pricing startegy that I absolutely dislike is: discounting. Should you be discounting my products and services based on New Years, Christmas and other holidays? I actually once seriosuly considered this strategy and figured: that’s too much work, I can’t be bothered. My products and services are great, why should I discount them just because it’s Christmas or New Years?
Do you see Apple discounting their products? Nope.
I also do not discount my services to friends or family. Here’s my mindset: I put in tip top work in my projects, and you’re going to pay for it.
You shouldn’t be slashing your prices as a marketing strategy. Instead of competing over PRICE, you should be looking at how you can position yourself better in your market.
Strategies: Diving Deep
The more you charge, the more you can potentially can make. However, pricing don’t just determine the money you make, but also the brand of the type of company you’re building.
Pricing is actually one of the most important decision in your business. It sends a signal about your products, encapsulates what your service is, and it attracts a certain type of customer. Think about the price of a Mercedez versus a Toyota. How they price their products? Who are they reaching out to?
Okay, let’s take a look at a breakdown from a digital marketing expert specifically digital products:
- eBooks [$50 – $99]
- eBooks + Minor Video Content
- Basic Video Content [500-1000]
- Advanced Video Course [Live coaching with Live Elements]
- Personal Interaction (Eg. My in person SEO Courses) & 1:1 Interaction $5000 and above – 1:1 Sales process
When you charge above a certain price limit, you’re not only just charging for content. You’re chargining for for accountability, community, in person coaching and webinars.
I realized that in the SEO service industry, I was going up against cheap SEO Indian firms. I didn’t want to compete with them on price. Some of them charge as cheap as $300 a month and promise page 1 Google rankings on short tailed keywords. Unfortunately, it sells. Easy to charge, easy to promise, but hard to deliver. The clients that sign up are looking for a quick fix.
Here’s my philosophy: your website is your online store that is synonymous across geographic locations. There’s huge potential in a simple website. Take a look at Amazon, a billion-dollar company that was built off their website. If you aren’t going to invest in it, then you’re not my target audience.
So why do I charge a premium price for my services?
That’s because my knowledge isn’t just limited to SEO. It encompasses all other digital marketing skillets: business, branding, positioning, technical SEO, copywriting, UX and design.
When I work for a client, I’m not just ‘SEO-ing’ his website, helping him get rankings. I’m helping him from a business standpoint.
So how can I charge a premium price and still sell?
Step 1: Be great at your craft! There’s no way about that.
Step 2: You need to have a narrative, a vision, a philosophy that you’re not willing to compromise on when pricing your products. Just showing your portfolio, testimonials isn’t enough. You need to educate your clients, students, get them to revere your work, and show them WHY you’re the best choice for them.
You can do this by a multitude of ways.
One of the ways I do it is to continuously pump out high quality content on my blog, the ideas and I myself use in my day to day life, so that when I actually do get an enquiry, my clients or students already know 98% of what I am about.
Closing Thoughts on How to Price Your Product or Services
When starting out as an entrepreneur or attempting to grow your business, you’re going to face psychological barriers when pricing your products or services. Business creatives like me (entrepreneurs) often have a huge problem when it comes to pricing.
I know I did.
Whilst the majority of the people out there are unsophisticated with their pricing strategies, take what they see based on their competitors or randomly splashing out prices, you should dive in as a business owner, figure out the different range of services, your target client, how you can justify your prices and work from there.