I often hear people in the business world say, “Charge what you are worth!” I wonder whether that is possible at all. I think not. I think the better way of saying it is, “Charge what your services are worth.” I say so because no one can ever put a dollar amount to you as a person. You are the total of so much more than anyone can ever price. So separate yourself from your services/business.
When deciding how to price your services, many factors come into play.
People buy services or products because of the value/benefit they get from the purchase. They pay for the promised solution or transformation.
Some of the things to consider when pricing your services are:
- The length of time it takes to deliver/provide your service
- Your hourly rate (the cost of your time)
- Your desired profit margin
- What your competitors are charging
- Your niche
- The perceived value of your services – what your market is willing to pay
Nailing down the perceived value of your services is probably the most challenging element of determining your prices.
Here’s an example –
Perceived value is one reason Hermès Birkin handbags sell for thousands of dollars, up to $500K while another purse can sell for $15-$30 at Walmart. Hermès is famous for making luxury bags from premium materials like calfskin, alligator skin, and ostrich skin entirely by hand in France. Hermès’ exclusive customers consider their purse collections investments worth even more than gold. Hermès also limits how many Birkin bags a client can purchase per year, preserving their bags’ exclusivity. (That’s the perceived value).
If you want to charge premium prices for your VA services, be sure to incorporate and communicate the perceived value of your services in your marketing.