Guest Post: The Boutique Pricing Strategy

By Sarah Petty

Being small business owners many of you know in order to stay afloat, you have to charge more. So how do you put a price tag on the time you spend with your clients, the attention to detail that you give, the passion you put into every product you create or service you offer?

You could take a high level class on pricing or read a huge manual, but let’s be honest, who has time for that? We are busy practicing our craft, learning new skills, and building our business.

Determining the price for your offerings can be scary. You might be thinking you don’t want to undercut yourself or maybe you are afraid of over pricing and scaring clients away. I remember when I started my photography business in 2001; I was under charging and had no clue.

As my business grew I realized I had to a make changes in order become profitable and make my business grow.

Here are a few tips I have on how to set your prices:

First; you have to realize you cannot compete on price with huge companies. You never will.

However, what you can focus on is how to create a demand based on desire for your products or services through a strong brand.  When you create a demand, you can charge what you are worth.

So what can you do? You can offer greater services, more customization, a better relationship, and more surprises to thrill them along the way. Your clients will be so happy with their decision; price will not matter.

Here’s what not to do with setting prices: 

The Big Guess: Don’t even consider this strategy; I had to include it because I know this market includes a lot of creative people. Some people don’t know the value of their time or don’t know the price of their costs. They are simply happy that someone is willing to pay them to do their craft and leave the pricing up to the customer. Unless you get lucky, this method of setting prices won’t make you profitable.

The Competitive-Based Pricing: Many businesses base their prices on those of their competitors, but if this is a boutique business you are going to get yourself in a pickle. The truth is you will never win with competitive based pricing.   If you go online to see what your competitors are charging, you will find prices ranging from high to low all across the board.   If you are using this strategy to price your products or services, you’re trying to justify the price of a product as if it is a commodity, and not taking into account your operating expenses, the relationships you build with your customers, or the value of your time, service, and expertise.

Cost-Based Pricing: With cost-based pricing you add up the costs of everything that goes into making your offering (including your time) and add some profit to arrive at a price.  This is where small businesses fail. They don’t add enough profit because they don’t account for the unexpected like having to fix a mistake or not having time to pamper each and every client.

Pricing is tricky, but if you create a demand for your products and perform excellent customer service and thrill them, I promise pricing will become easier.

To get more tips on pricing, marketing and branding a small business that can charge what you’re worth download a free chapter of my New York Times Best Selling book, Worth Every Penny: Build a Business that Thrills Your Clients and Still Charge What You’re Worth at www.wortheverypennybook.com/try-a-chapter.

Sarah Petty is a New York Times Best selling author of Worth Every Penny: Build a Business that Thrills Your Customers and Still Charge What You’re Worth. Her photography studio was named one of the most profitable in the country by Professional Photographers of America after just 5 years in business. She has an MBA and teaches marketing for small business owners s at The Joy of Marketing (www.thejoyofmarketing.com). To grab the consultation form that Sarah uses with new photography studio clients, go to www.thejoyofmarketing.com/sellmorephotography.

Sarah Petty is a highly-acclaimed speaker, author, MBA, boutique marketing expert and the founder of The Joy of Marketing. You may follow her and learn more via her accounts on FacebookTwitter, and LinkedIn.

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