So the topic of transparency in pricing was the subject of EntrepreneurGram a few weeks ago and now that Al Gore’s internet has had some time to breathe, I want to share my take on it.
I remember when I started my entrepreneurship journey back in 2019 with no blueprint and simply gleaning from the so-called gurus on social media. I saw that everyone, or what felt like everyone, who was providing the same services as I did never put their price out there. You had to set up a meeting to share your vision and they will create a price specifically for you. It really bothered me because as a consumer, comparing price lists is how I determine who I can work with.
For instance, for my birthday party last year, I was trying to find a caterer and I appreciated everyone that had their rates available so I could compare accordingly. I do not like wasting my time so I would rather go on your website and see that this is not a relationship we can have right now than set up a meeting only to find out within the first few minutes that you’re out of my league. And as a business owner, you just wasted your time too.
And why is that? Why are business owners hiding their price list? I understand you want to get that lead magnet but it’s a useless lead if you are truly not in their budget. My catering budget was $2,000. My party was an upscale lounge vibe so I wanted cocktail hour food – small plates that could fill you up paired with my open bar. So I knew going in that my budget was firm regardless of who provided the service. It was always the ones that did not have a price list that gave me a hard time because they either wanted me to increase my budget or cut back on what I wanted.
As a business consultant, I feel like it is my duty to let you know that you need to be open with your pricing. Whether you shop at Forever 21 or Neiman Marcus, the price for their products are listed. Now, I know what you’re thinking “my price depends on what they get” and I feel you. I get that. But you should have a minimum price that you are willing to work with and that should be listed.
I was working with a client that designs custom evening gowns and when we walked through her customer experience, I had to explain to her that one of the reasons she is not getting the money she wants is because she’s not upfront about her price list. If I want a custom gown and don’t know how much they cost, I probably don’t have a budget in mind. I am willing to set up a consultation with you so I can get some understanding but when we have that meeting and you tell me the gown is going to cost me $800, I am running out the door because my brain cannot process that. I was not ready.
However, if you as a designer know that for the basic of basic gowns and labor, your starting rate is $600, now every prospective client that reaches out knows that they need a minimum of $600 to work with you. Both of you benefit from this situation because you are getting the client and the money you desire while they get the gown of their dreams.
I see way too often business owners that get so excited they finally get a lead that they settle for the short end of the stick. And the reason for this is your lack of systems, procedures, and a solid price list. You should know the base price of what you would charge for all of your services not only so you can justify why you are charging the price you charge but so you can assess how your business is operating.
Personally, my favorite people to get serviced by are hairstylists, nail technicians, and make-up artists. Every time I book one, I love looking at their price list because NOTHING catches you by surprise. Everything has a base price and add-on fees. The final price is not the problem for the customer; the problem is when they have to guess what the final price will be because they don’t have anything to work with.
Lastly, a friend and I were talking about this and realized many business owners do not know what part of the customer’s journey they want to be part of. If you are a product photographer and you want to work with new business owners, your rates will not be the same if you were interested in working with established businesses that are not new to professional product photography. The latter is willing to pay top dollar because they understand the importance of professional photos and how that can convert to sales.
I say all that to say, if you are not someone that is transparent with their price list and/or their base price, I highly recommend you revisit that concept and see how that changes your business clientele and structure. Then come back here and let me know how it went.
I’ll be doing another write-up with the benefits of sharing your price list but in the meantime, start thinking of your base.
Until Next Time,