Money. Time. Quotes. Discounts. Cheaper. Affordable. Package. Profitable.
These are all words I hear on a daily basis. Recently, I had a conversation with a co-worker that prompted me to read a little bit more on the perception of prices.
Let’s look at our industry for a minute. Every day I price jobs that require vendors for shooting TV spots, videos, developing websites, printing annual reports, etc. And then there’s assigning the the price or cost to pay for our in-house services like strategy, marketing plan development, designers, creative directors, copywriting, etc.
When it comes to setting a project price, there’s the obvious— we have to make sure we cover our time and vendor expenses. Do we always cover 100% of our agency time? No. Do we more often than not over deliver on our time? Yes. But that’s ok. There’s a balance we have to obtain between covering our time and producing the product that the client has hired us to deliver, in the best way possible. And if that means investing a few more hours of creative thinking or writing, then we’re ok with that.
Now let’s talk about pricing in more general terms when you have a buyer and seller. This could easily be applied to any business, and here are just two things to think about or consider:
1. Some people think that when the buyer or seller agree on a price, then the market has arrived at the best price. But ultimately, pricing is about value. You’re providing something the buyer can’t provide themselves and they see your product or service as valuable. And in order to set appropriate prices, you first need to understand what your customers value.
2. There’s more to price than price. Many buyers want relationships or partnerships with their vendors. When a vendor invests significant effort and added value to the company that they supply services to, then it’s less likely that they’ll be replaced on price alone. The longer a vendor works with a company and the more success they bring them, the less likely they are to be replaced.
My takeaways? Pricing isn’t just a number. There’s a whole lot more that goes in to an estimate. You must understand what is of value to your customer, and sometimes, over-delivering and going the extra mile to strengthen the relationship or partnership is totally ok.