If you are wondering if you are selling your services too cheaply, you are not alone. Most SME business owners find themselves wondering if their price is right when it comes to the products and services they offer.
Setting the right price, however, can be a challenge if you are in a competitive industry. The price of something is usually higher if you have high demand and scarcity, but if you are one of many businesses offering the same service, trying to compete on price can be a race to the bottom nobody wins.
So rather than focus on price alone, it is important to look at value. The prices you set can speak volumes about quality. If you set your prices too low people may consider they are getting something cheap but they might also go elsewhere if they think your price is a reflection of the value you provide. Some customers might even look elsewhere and pay more, if their perception of the value your competitor can provide is higher.
Another danger with setting your prices too low is that you either sacrifice time or the level of service you provide. The first will almost certainly result in longer working hours and less opportunities for expansion while the latter can result in a poor service which leaves customers feeling short changed.