How to create a price for SEO services

Ever thought about how to evaluate your SEO services? Products? Set prices at a favorable level for you?

Pricing seems like a simple task, but in reality it’s a little more complicated. This is quite an interesting topic, especially after considering the schemes of work with the customer. We have previously considered the issue of prices in the article entitled "Who sets your prices?".

In this article, we will get acquainted with various pricing methods, some strategies and analyze why you will not like the same rates of others.

Why is a pricing strategy important?

It is clear that setting the wrong prices, we just lose the business.

In order to increase revenue, we constantly need to develop new products and services. However, to squeeze a little more profit from the provision of services and the sale of goods, you can change our current pricing strategy.

To squeeze more profits, companies are looking for different ways to sell the same product at different prices, to different customers.

Cost price plus markup

The usual method of pricing is the addition of the cost with the markup. To the cost of goods or services add the desired amount of profit . There is nothing strange or bad in this method - it is widely used, but still there are several problems.

The first problem is that this method does not take into account competitors . If we offer SEO services at a price of $ 15,000, obtained by this method, and our competitors offer the same for $ 10,000 - it is clear that our pricing method does not work. We have to set prices, given the market situation.

This pricing method also does not take into account changes in demand . If the demand for your products / services has increased dramatically, say, because of your recent interview on television - they were missed, hence the price should be increased.

Another problem is that this method does not take into account the importance of the product or service for the client .

Imagine that you have created a widget that doubles the performance of a car. The value of such a product for the buyer will be high, and the cost of creating this product is low. Pricing method cost + margin simply underestimate the product. A pricing method based on the value of the product evens out the cost and value of the product.

Let's take a look at the method to accurately calculate the cost of your goods or services.

Price calculator

In the book The Art Of Pricing, you will find the following method for setting pricing.

Step One: Price and Availability of Similar Products

• Are there products similar to yours?
• If so, how are they evaluated?

Step Two: Similar Parameters

• Is there something that you offer, but what competitors do not have, and vice versa?
• Are these differences important for your customers and are they ready to overpay for them?
• Are other parameters important for a customer: brand, service level, reputation, location, etc.?

Step Three: Income

• Are your customers able to buy the product?
• Can buyers afford to buy the product at new prices that are different from the previous ones?
• Is there a seasonal dependence: at one time of the year they can afford it, and at another there isn’t?

Step Four: Demand for Related Products

• What are the additional costs of owning your product?
• Let's say you sell cars. Having spent on the purchase of a car, the buyer will also have to spend money on insurance, service and maintenance of the car.

Step Five: Marketing Environment

• Has your product suddenly become meaningful?
• Has the demand for a product increased or significantly decreased in a short period of time?

This pricing method takes into account several variables: price availability, significance, market conditions and competition .

Some problems with this pricing

Pricing, not taking into account the overall strategy of business development - a mistake.

For example, there was a natural disaster, leaving people homeless. Hotels can dramatically increase the cost of rooms knowing that demand will increase. However, in the long-term development, the brand will suffer damage, as the hotel’s reputation for overpricing will be firmly entrenched.

Some companies can set attractive prices for customers, but not profitable companies. For example, in order to gain market reputation, SEO agencies sometimes lure new large customers by providing services at a discount or for free.

Subtle pricing

Rule of Three : Going to buy a washing machine, you will be shocked by a huge selection of models. This is not unusual. The store tries to maintain the range.

However, there is always one thing hidden. Most buyers will purchase a car at an average price, since the product at an average price seems like a bargain. Therefore, the store will always be in the presence of the machine at a very low price and at a very high .

The model that the store wants to sell you will be at a price between the lowest and the highest. If the store does not sell very expensive cars, then cars that were sold at an average price will be sold at a high price and most likely you will choose another model.

Auctions : this may not be applicable to SEO, but by selling products, an auction system may be the best way to get better prices. Numerous books about the psychological impact of auctions on a person agree that a person is ready to kill the price based on his desires. Those who need more product will pay more.

Variety - offer things that are only slightly different from each other. Take a look at the prices of Apple and their product - the iPad. The cost of each product is practically the same, but by offering various options they can determine what they are willing to pay for more.

Some companies can hold a seminar with you (lesson, conference) for several thousand dollars, and then sell the record for several hundred dollars, relying on the fact that having downloaded this lesson for only a few hundred dollars, people can study it at home, saving $ 1000 +.

Price segmentation - your customers may not be able to pay the full cost of the product / service right away, but they may use other payment methods, such as a monthly payment. Some customers prefer a whole package of offers, while others will want to use only a part of your services. Make several different options for your services so that each client can afford them.

Differentiation of prices - offer discount cards and you will win those buyers who are very sensitive to price changes or always waiting for a profitable offer. Perhaps other buyers do not attach importance to the cards, so you can successfully combine 2 different pricing strategies.

Markdowns are an obvious but powerful tool. You advertise the usual price of the product, but immediately cross out and write the price with the markdown. What is not so clear is when you need to use markdowns. Such a move does not work with exclusive things, because it immediately puts into question their value.

Note that in advertising of exclusive things do not indicate their cost, and if they do, you can see prices starting from $ 1,500. Budget things are advertised with the price in dollars with cents, for example, $ 39.95, $ 99 - which is not $ 100 and lower. The price format says a lot: exclusivity, lack, etc.

What about honesty?

To offer a product / service at one price to one group of people and at a different price - another may not seem fair. But this question I think everyone should consider for themselves.

But do not forget that different prices affect the level of value of goods / services for the client , and then the client decides for himself what is more important to him.

Yes ... They can always say no