Have you ever considered that the way we look at a product or a service’s price shouldn’t only be focused on how affordable we believe it is, but should be based on a set of criteria that will guarantee us paying the right price for us at a certain time?
Paying the correct price isn’t a matter of staying within the agreed budget or staying within the common price range you were used to paying for similar products or services. Choosing the right price to pay implies identifying the key purchasing criteria for you. These can be: price, service, quality, speed, scale, options. Following, you should understand which one you value the most. Then, you must consider which one is important to your business and why. This process will help you make the right decision when it comes to choosing a supplier, and price it’s definitory.
Having the above ideas in mind, let’s explore some common stereotypes we have when it comes to evaluating price and make a decision based on it.
We are so focused on affordable that we start minimising the quality we expect for our products and services
Yes, we’ve all been here, the place where we like staying not within a budget but go way below under it so we have the feeling we are not spending too much while we are doing our job. But how many times did this decision prove to be a useless investment? We have just paid for a product that never matched our needs or purchased a service that was below our expectations.
For example, let’s look at a website design: you want to make it nice, but affordable at the same time. You want to make it attractive to your customers, but you are not familiar with any optimisation required in order to build a proper customer experience. There are tons of other things you completely ignore, because you don’t have the necessary expertise. So you end up choosing a supplier to do this for you – which is a good choice. But you don’t want to spend too much money on it. Perhaps you don’t have enough assigned in your budget for this service. Why? Because you haven’t budgeted it accurately. And this is because you didn’t evaluate properly as you didn’t know all the aspects required in order to build a successful website. So you end up paying less to get less than you actually need. What’s the result? You don’t get the website to match your business needs so you don’t achieve your goals. However, you do spend money on it but with no return on investment. Have you ever considered that this costs you more than the price you tried to avoid paying? Expensive doesn’t mean paying the higher price – it means paying the wrong price or buying the wrong service with the budgeted amount of money.
What should you do to avoid this?
First of all, you have to evaluate your needs and requirements combined with a strong overview of your business goals. If you can’t do it yourself for a specific product or service (because you don’t have the knowledge) you ask for support. Usually, a good supplier will not only deliver the service but will help you identify the one you need and could generate business results.
Secondly, you budget according to these needs and requirements. There is no money spent worse than paying for something that will never bring you what you need. Budgeting right doesn’t mean allocating the highest amount on what you want to get. It means assessing the quality of the service you want to get , evaluating the market price for these types of services, exploring multiple options and planning a pricing scale to serve as a model for future purchases.
Ultimately, you choose the optimum price for you based on your pricing scale. You’re already in a better position because you know what you need and how to get where you need. You can start negotiating your final price because you have a strategy in place. This will guarantee you the right price for the right product or service.
Pay more to get more – wrong or simply just wrong?
How many times have you heard this: you should be willing to pay more to get more quality or it’s expensive because it’s high quality.
Let’s rephrase it the right way: you should pay as much as you need to get the maximum quality for the products and services that you require and focus on getting the best solution that brings the outcome you are looking for. Yes, don’t focus on the price, focus on what you want to achieve by paying the price.
You have to work on a design concept for a theme. You don’t have the expertise internally, so you decide to work with a supplier. But how can you choose the right supplier, unless exploring more than one? To make the right choice you have to see some samples – but those aren’t free. So you end up paying different prices from lower to higher and you eventually get some options to choose from. Let’s say you made your choice – you found those you plan to work with in the future. But to get there, you had to pay an amount of money that didn’t bring you the final service. You still have to pay extra to get the final service.
Is that money lost? Logically, it would be a yes. But let me explain why it’s a no. In order to evaluate your needs and find someone who matches your requirements and could help you achieve your business goals, you had to see the solid proof which had a price. In other words you paid for getting the right solution that considerably increases the chance of getting the expected service.
This doesn’t mean that you should always pay more to get more – just choosing the higher price won’t guarantee you the best outcome. Remember, you should always focus on determining the appropriate key purchasing criteria for your business, assess its needs and requirements and build the pricing model that will allow you to scale your business needs and always choose the right price.
The Good-Better-Best approach – offers the opportunity to pay for the services you need without impacting the it’s quality
The model it’s built to match any pricing scale you might put in place to match your business requirements. It gives you the possibility to test the water by starting with the basic fee and then upgrade either to get more or to adjust your needs. This way you see how the supplier product/service model works and what’s in it for each package. This transparency provides more guarantees and stability to both parties because the customer knows what he is paying for while the supplier understands what the customer needs.
OptimizedIT provides a G-B-B pricing model, allowing creative agencies to assess their needs, scale their business, choose their preferred solutions and pay the right price for it. We offer transparency when it comes to our services and the possibility for creative agencies to evaluate the market and choose what’s best in order to support their business development.