Know-How Exchange : Strategy

Hello mis_maria,

I would suggest you first write a marketing plan and then find your USP (Unique Selling Point) that distinguish you from other businesses. Next you have to do a market research to find out what your competitors are doing with pricing and also marketing. You have to find out how they conduct their business by way of pricing and advertising.

In addition, by looking at these factors you can find a middle ground in setting your price structure. There are companies that will help you with your market research. Do a search on Yahoo or Google and type in Market research you will get some pointers.

I hope this helps.

I started it by getting an average figure for marketing consultancy in the UK and using a sliding scale based on that for different projects I was asked to do.

It worked for a while, but the price can put some people off, so I am starting to change it to a value pricing system. if a client wants a project doing, I am trying for forget a set day rate and see if I can price the project, this seems to be a little more appealing to the businesses I approach.

When you start out, whist hard cash is nice, you can also swap products and services for your fee! So if you pick up a accountacy business (for example), maybe they will give you a good discount or do your accounts for free instead!

Good Luck

Aliza,
Here's another way of determining price:

• Figure out what income you need to live first - add up all your personal and business expenses, including taxes, insurance, etc, add to that the amount of "extra" money you want to accumulate per month.


• Take a look at the projects you can complete in a month (or extend the timeframe out if projects can't be completed in a month). This means picturing typical projects and all of the activities and how much time each activity takes. Make sure to include some "spare time" for prospecting new clients in this model - you can't do one project and then step into another one without actually working to find the next project. Typically, factor 25% of your time for finding new clients and projects.


• Divide your expenses and desired income from the first bullet by number of projects in the second bullet and you have the minimum price per project.

With this minimum price, you do two things:

• Determine if the market will bear this price. Will customers pay this much for the kinds of projects you can do? If not, you may have to figure a way to augment your services or differentiate them enoungh to yield a better price, be more efficient so as to do more projects within the timeframe, to be able to live on less, or not be in that business.


• Determine if you can charge more than this minimum because the market will bear more. This is tricky, but you can find out by networking. Ask people you know who have contacted services like yours what they paid in the past, find people who know people who contracted services like your and ask them what the fee was, etc. Another way is to evaluate the benefits of your service. If typically, you provide a vehicle to generate $100,000 in new sales, and the customers' companies make 10% profit on sales, then they make $10,000 from your services. You could easily point this out and name a price that splits this profit with the customer.

The idea of generating your own marketing plan and also a business plan is a very good idea. A business plan typically looks at monthy expenses and revenues for the business over a three year period. The marketing plan concentrates on your benefits to clients, differentiation points from the competion, and also how you reach potential clients with personal selling, advertisements, press releases, trade magazine articles, trade shows and conferences, local chambers of commerses, word of mouth and referrals, etc. It will help focus you on the tasks you have ahead of you.

I hope this helps!

Wayde