Pricing strategy

This is an interesting article I just read. It's not aimed at face painters, but it is worth considering in your pricing strategies.


Freelance pros take the zeros out of project bids. Here's why.

BY: LINDSAY VAN THOEN – JUNE 16, 2014

FOLLOW THE MOVEMENT


Here’s a really simple piece of pricing advice that always works: cut the zeros.

Let’s say you’re doing an interior design project for a client. You list out all the services you’ll provide in your proposal, and then you give them a project fee: $5,000.

The client balks. Even though you provided a breakdown of how you got to that number, they want a breakdown of your hours or an itemized list of expenses. They try to haggle you down another $500.

What would happen if you quoted them a price of $5,180?

I bet your client would be happier. A specific number has greater meaning because it looks like you calculated your cost exactly. You took the time to break down all the custom component costs, and come up with a number for their needs -- not just the number you normally quote. $5,180 looks like an unrounded number with no padding.

I’ve seen it time and time again: clients don’t like zeros. It wakes up their never-far-away suspicion that freelancers pad their quotes and are trying to milk them dry. It’s a law of non-even price numbers that marketers have employed for centuries.

If you’re pricing your services right -- based on true value -- you will not be lying to your clients. This is not about misrepresenting yourself. It’s about making the proposal and bid process smoother.

This is not always going to make your clients happy. But try it and you may see a difference.

Agreed. There are a couple of interesting sales books on the psychology of pricing and this idea is backed by actual studies.

Interesting.....
Food for thought for sure.

How do you pay someone to fill for you?

Little Friends, like a subcontractor?

so for face painting, this would apply to a price for a party, corporate event, etc where you are invoicing for the total amount?

does it apply to pay per face? i know in retail there is a similar concept, don't use whole dollar amounts like $4.00, $15.00, use $3.99, $14.99, or even end in .98, .97 or lower.

jlirie wrote:does it apply to pay per face? i know in retail there is a similar concept, don't use whole dollar amounts like $4.00, $15.00, use $3.99, $14.99, or even end in .98, .97 or lower.

Not that I'd ever do pay per face, but I would dread having to hand back a penny as change every time. It's much easier to keep it at even dollar amounts. It's the same logic why stadium/ballpark concession stands charge prices rounded to the nearest 25 cents, and have sales tax included.