How To Price Your Digital Services
Pricing can make or break a business, whether it’s a big corporation, a small business or a one-person endeavor. Learning how to price digital services properly is essential from day one and it also greatly impacts the scalability of any enterprise.
As a freelancer, you are the deciding factor regarding most aspects. You are the one who comes up with pricing strategies and you are the one who has to apply them. And once applied, you are also the one who needs to adjust.
When applying a strategy of this kind you are not only setting a price for your services, but you’re also sending out a message regarding the quality of your offer. They’re two types of clients in the digital world: the ones looking for the cheapest bid and the ones looking for the highest quality. Your pricing strategy is highly dependent on your target client base.
Pricing is difficult for the simple reason that while it needs to attract clients, it also has to sustain and reward your work.
When thinking about your pricing strategy, research and analysis are your cornerstones. Use some of our insider tips to set a fair price for your digital products.
Per hour vs. per project pricing
Usually freelancing is automatically linked with the idea of hourly pricing. This option is very popular amongst freelancers because it helps set the concept if being paid for what you work. However, clients may have a different perspective. When asked about the price of your service, you should not only provide your hourly rate, but also forward your client the number of hours necessary to complete the task.
The timeline and level of effort are always highly subjective, which is why pricing per project may sometimes be a better strategy. When you set prices per project, it doesn’t really matter for your client whether you require 1 or 3 hours to complete the task. You have provided a deadline and you respect that deadline. The project is complete, the client is happy and so are you. Per project pricing might be a bit uncommon to freelancers and more familiar to small business, but it can be more rewarding.
Pricing plans and their benefits
In the SaaS world, more and more companies are switching from the Freemium model to pricing plans. Why? Simply put, they work better.
- Broader public: Offering pricing plans, you could certainly reach a greater public. You could have access to multiple public segments. When activating different packages having distinct prices, you could pleasantly discover that people value the possibility to choose.
- Test your success: The great thing about pricing plans is that you can test. If you had several packages priced differently, you could test and see which ones work best.
- Go against your competition, the right way: You know very well that clients will check your competition and the pricing offered before contacting you. You know that if you price your services considerably higher, you might lose a few clients who run to your competition. However, with package pricing plans you could win customers back.
Go public with your digital services pricing
This is a double-edged sword that’s hard to tackle. For an hourly rate pricing strategy, it might work to make your rate public. Clients will know what to expect and if they contact you, you know it’s not time wasted. On a project basis strategy though, rarely two projects are the same. The time and level of effort or even the knowledge that goes into one project can be nothing like the next. If this is your strategy, it’s always best to analyze the requirements first and then send an offer.
Offering customized pricing is a strategy that can help your business grow. Display your basic pricing, but inform clients that you can provide them with customized offers.
How does this help?
- It can pave the way to long-term collaborations.
- It can show clients that you are willing to negotiate.
- It can teach you more about where your clients are in terms of price. This allows you to make the necessary changes in your pricing strategy.
Pricing strategies are a blend between what you believe your work is worth and what your clients are willing to offer. Take the necessary time and create a pricing strategy that allows you to grow.