Do you have a service company? Then you will know that calculating the price of a service is a complicated task, because being something immaterial, it is difficult to determine what its actual value is. That’s why in this post we want to give you a series of recommendations to help you set sales prices to the services of your business.
At AYCE Laborytax,we are aware of the difficulty of putting a price on intangibility, because reallyuntil the client has tried our service, he will not know if the investment made will have been satisfactory or not. Therefore, it is important that companies have a clear strategy for setting sales prices for services.
Here are some tips to help you design that strategy.
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Aspects to consider when setting sales prices for intangible services
> Cost analysis
To set sales prices, the first thing you need to do is analyze the costs of production, distribution and sale; and from there, set a price that allows you to recover those costs, as well as get certain benefits.
So far all clear, but what should then be the final price of a service? To set the final sale price of a service, in addition to considering that it must offer you benefits, you will also need to assess other aspects such as effort, experience, customization or time spent. All this will help you get a rough idea of what the price of the service should be.
> Demand estimate
To set sales prices you will also have to take into account the demand for each service since, the higher the demand, the higher its price.
> Studying the competition
Possibly the most important point for setting prices for selling services is to study competition,since analyzing the competition will allow you to get an idea of the prices at which the market moves. You should also pay special attention to whether competitors have offers or promotions.
From there, you must assess the quality of your services with respect to competition,and set the most appropriate price. However, even if your service is much higher, we recommend that you do not set too high a price compared to the competition, since as it is a service, the consumer will not be able to know whether or not it is satisfied until after consumption.
> Pricing policy
Before setting sales prices, you should be clear about your pricing policy,differentiating between a high or low price policy.
Some companies have a high-pricedpolicy, whose products are intended for an audience with medium-high purchasing power, while others have low-pricedpolicies, with more affordable prices and aimed at the general public. Having a clear pricing policy will help the public get an idea of the services your company will offer and also the prices.
The most effective techniques for setting sales prices
These are the main key points, but from there, there are a number of techniques that help to set the sales prices of the services, and that vary mainly depending on the type of service offered and the target audience.
> Prestige price
Usually, a high price is synonymous with prestige,and so consumers understand it. So if you offer a quality service, with added value to the competition and you want it to be conceived by the public, a higher price will help you to have a greater prestige.
> Warranty price
Another option is to set prices based on the service you can guarantee to users. If you can guarantee a certain level of service, the user will not have a higher price than the competition.
> Attraction price
You can also follow an attraction pricing policy,offering your services at low prices, with the aim of attracting the public and getting a greater number of customers, compensating those low prices with a higher number of sales.
> Optimal price
Setting an optimal sales price is to set acceptable sales prices according to the quality of the service, withoutlowering the price, but also not increasing it. In short, set prices based on the value for money – price of services.
> Joint prices
One technique that works very well is to set service prices together. By this we mean, for example, creating service packages that would allow users to access each service at a lower price. But on the other hand, you’d be increasing the number of sales.
> Complementary prices
It consists of setting low prices for a basic service, which can then be completed with other more expensive services. This is a way to attract the public with low prices, getting them to increase the number of contracted services later.
Here are some of the Key tips for setting service sales prices,which we hope will help you to set a price appropriate to the services you’re going to offer in your business, allowing you to capture the public’s attention, increase sales and improve your revenue level.