There are three common mistakes that wedding professionals make in their businesses. These are mistakes that if not corrected will continue to plague your ability to succeed. We’ll be discussing these mistakes this week:
- Under-pricing your services
- Paying for advertising that gives little or no returns
- Not setting boundaries for balance between work and personal life
Let’s get into our first mistake…
The PRICING problem
Many entrepreneurs open their business with this thought: “I’ll set my pricing low in order to compete in the industry and raise my pricing once I’m established.” This can backfire in so many ways:
- Clientele will become accustomed to your pricing and will come to expect it
- People will begin to refer you as the “budget” vendor and you will be pigeon-holed
- Potential clientele may not want to do business with you because they may see you as providing a less-than-valuable service (often a more expensive item is perceived to be of higher value; a less expensive item can be perceived as cheap or of poor value)
- You won’t be able to turn a reasonable profit (eg: if your business expenses are greater than what you are charging, you will be operating at a loss)
- It devalues the services of all of those in your profession
In setting your pricing, you should ask yourself the following questions:
- How can I provide exclusivity of certain products or services?
This goes hand-in-hand with finding a market niche. Find something that you are unique at and build on marketing that as something special. Your pricing should reflect the exclusivity of what you offer.
- How do I add value to my client?
This is very important in understanding how you will service your client and add value to their wedding. The value proposition gives your customer an understanding of the benefit you are exchanging for the price you have set on the product or service.
- What does my brand say about my product and my level of service?
Branding is extremely important in marketing a product or service that is of high-value and worth. A brand that is synonymous with service and value is a brand is associated with the higher cost.
A few more thoughts…
Sean Low, President of Preston Bailey Designs, Inc. recently wrote a great post on pricing and gave some very strong recommendations on pricing strategies for creative types. I recommend reading the post here.
A small business seminar I once attended mentioned that most small business owners under-price their goods and services. Their recommendation was this:
price what you think you should charge,
and then add 10-20% for what people would actually pay.
The thought behind this is that people are usually willing to pay more for your services than you give yourself credit. Don’t undersell your skills, value, products, and services. You are worth it!
Tomorrow… we’ll be talking about advertising… and how to make sure it’s working for you!