Guess what? There is a formula for financial success, and I’ve got it.
I’m PASSSSSSSIONATE about pricing… everything having to do with it! The psychology, the branding effect, the reputation aspect, the technical how-to… you name it, I love it and I love teaching it.
In this blog post, I’m not going to go into detail about how to implement or utilize a formula because I’ve already created a detailed, step-by-step guide for that (you can get our Pricing for Profit Guide by clicking here ).
I am also NOT going to go over the obvious; All of the overhead and invisible costs that you may not realize you have that you can read all about on other blogs (I’ve read ’em all!), but I want to go BEYOND that here…
What I want to focus on is the reason behind why you should be pricing yourself mathematically for the benefit of your client relationship and your reputation.
Simply put, pricing yourself via any other method is NOT GOOD FOR BUSINESS.
If you’ve read my previous introduction blog post, you know that I had no experience or background in florals when I first started. I hadn’t worked for anyone else and I had no idea how to price myself to clients.
To get price points for my proposals, I would simply eyeball an image of a centerpiece that the client would bring in and ambiguously choose a price based on what I could mentally justify paying if I were in the clients shoes (it pains me to even write this). This method is so terrible because it is so unethical all around… it isn’t fair to you as the business owner and it isn’t fair to the client.
Time after time, I sabotaged myself by not pricing enough to cover my costs, but again, I’m going beyond that here…
THE STORY THAT CHANGED THE WAY I PRICE
I want to tell you a little story…
About a time that I met with a client that I was DYING to sign. This client had received 3 other quotes and I was her 4th visit. She was a friend of a friend and she told me during the meeting that as long as we saw eye to eye and that I fit in her budget, she PREFERRED to sign me because we knew similar people and she felt comfortable with me.
WHAT?! How awesome is that, right?!
She was very specific and had exact images of what she was looking for, which made our meeting productive and to the point, she openly gave me her budget (which was way more than I was used to bidding at the time). At the end of our meeting she commented on how she “couldn’t wait to work with me”.
I was going to nail this…
I took her images and I created a proposal using my uber scientific method of the psychological guess-timate. I felt pretty darn proud of myself with my beautiful proposal that was within her budget and I sent it off, already excited about how the pictures from this event were going to look on my website.
Well, a few days went by and I got no response…
so I kept waiting…
then a week… then 2 weeks…
Finally, I checked in with her. She had gone with someone else! I was heartbroken. Very confused, I asked, “Can you give me a bit of insight as to why you went elsewhere?”.
Politely, she answered, “Honestly, I really wanted to work with you, but your pricing made me feel like you didn’t quite understand my vision“.
…confused I asked, “Can you give me an example, I would love to learn from this situation.”.
“Sure, I would love to. One example is that both of the centerpieces that I wanted (there were 2 styles) were priced nearly the same. This doesn’t really make sense to me since some of them are bigger and some are smaller. None of the other bids that I got from other florists made them so similar in price… Another reason is that I specified that I wanted lots of orchids in my tall centerpieces, and I know these are very expensive, yet you didn’t charge more for them than you did for the ones without orchids. Also, I had told you that I wanted really large bridesmaid bouquets, but you priced those the same as you did for the very small cocktail table arrangements, and that made no sense to me either. Ultimately, it just made me feel uncomfortable.”
I was totally stunned and even more bummed. She was right. Since I had no basis for why I was pricing the way I was, I randomly assigned things based on the psychology of what I thought would sell, and in doing so, I had squashed her confidence in my brand and her trust in my ability as a PROFESSIONAL.
OOoggghhh…. tough lesson but a majorly important one.
The major reasons you should be pricing mathematically are as follows:
- The trust factor between you and your client
- Invoking confidence in your brand and your confidence level
- Ensuring you make a profit on each event
THE TRUST FACTOR
Weddings and events are scary for clients. They are spending more money than they want to be spending and they can’t see the event in advance, they have to TRUST that it is going to be beautiful, perfect and exactly what they dreamed of. They only have their budget and intuition when it comes to signing vendors.
It takes time to build trust and clout, but it only takes a brief moment to rip it all down. Like I demonstrated with my above story, you have to be able to mathematically justify reasons to everything that you do so that you and your client are always on the same page.
INVOKING CONFIDENCE IN YOUR BRAND & YOUR CONFIDENCE LEVEL
You invoke confidence in your brand with self confidence. To be confident in your pricing, you have to understand why you priced yourself the way you do and you have to easily be able to articulate it to a client. When you price yourself mathematically, there is always an easy answer to any pricing question and therefore, you can always be confident in your response, which invokes brand confidence and ultimately, a happy client.
When a client asks, “Why are these two centerpieces such different costs when they are the same size?”, you have to be able to return it right away with, “because this centerpieces contains more expensive flower varieties than the other”, or “because this centerpiece is much tighter and requires more flowers than the other one that is the same size”.
ENSURING YOU MAKE A PROFIT ON EACH EVENT
If you don’t use a mathematical process for your pricing, how can you ensure that you aren’t over or under charging? I can’t tell you how many of my coaching clients think that they are charging an appropriate amount, but upon mathematically calculating their costs, realize that they are actually undercharging so much that they may not even be breaking even!
p.s. I couldn’t possibly talk about pricing yourself correctly without addressing the big fat bright pink elephant in the room…
That topic is NEGOTIATING to make the sale…
I am going to save that gem-of-a-topic for my next post! I hope to see you there!
I encourage you to charge your worth and I hope to serve you on your path to success!
RELATED DOWNLOAD : The Blush Method Pricing for Profit Guide