There is perhaps no more vital measurement of your service or product value to a consumer than the price they are willing to pay for it. However it seems like in the current climate of fiscal uncertainty and belt-tightening there are quite a few companies missing the mark by some extreme margins and freelancers, usually quick to adapt, have been trailing in the confusing wake of pricing variations with most stubbornly refusing to believe that they need to modify them at all.
Recently my eye has been drawn to some price-related news stories:
Firstly Dixons laughable attempt to get over the “The last place you want to go” fiasco was to introduce a sale so epic that only 9 or 10 people got to see it before it collapsed under the weight of visitors. This is not so much a bad price setting strategy as it is completely missing how important the price has become to people recently and hence how much it can sway a decision.
Econsultancy are ‘estimating’ (using fag-packet technology I suspect) that Dixons may have lost as much as 45% of their business due to this site outage (still ongoing whilst I write this), which has got to put it up at the top of the shitty-sales list. Imagine explaining that to the Dixon’s Retail board, just after the part where you had to explain that the guy who was supposed to be turning it all around, has actually fucked off to Apple.
Next we have Adobe, well known for it’s charitable leanings, announcing that the next generation of it’s flagship Creative Suite will still be costing a staggering $2,599 or $49.99 a month, forever. This puts it out of reach for everyone except businesses and hardcore web-designing freelancers who can probably offset it against tax or something… and, well, pirates.
The operating system this software cannot function without costs ~£100, the hardware to use this software effectively costs about £750, heck for $2,599 I can build my own uber-sexy design table out of a touch screen TV and a shuttle PC and just use Gimp. It would be a small price to pay for having the most awesome furniture in the world in my living-room (though there would probably be additional costs surrounding the electrifying to keep the kids off it).
My point here is that Adobe are being greedy, and by doing so, potentially losing customers and making less. The customers they do retain, now trust them less so when someone comes up with a viable alternative, customers will jump ship faster than rats on the Titanic. And that is assuming the Titanic was launched on fire, minus a hull, half under water and with a special, faster-than-light, rat-ejecting cannon on every partially-submerged deck.
Finally on a pricing tip; the black market. Asia knows black market. No one does it like Asia and that shows so much it is starting to become a tourist destination, much to the horror and confusion of the manufacturers being “ripped off”. Why is this happening? How could people do this to lovely cuddly companies like Apple and Sony?
Well I’m going to guess that becasue they have been shafting you for so long, you’re now pretty cool with buying a knock off that might not last as long or be as good, but IS adequate, rather than re-mortgaging a kidney just to get the latest version of something you already have that is almost indistinguishable from what came before. I’m not saying that this is a good thing, but I am saying that if people don’t think your product / service is worth a certain price, they won’t pay.
My point is: you can’t just sit there thinking that you are worth £450 a day if you have zero clients. Setting your day rate at £450 “because all other photographers are that much” is a stupid strategy. There are oodles of guides & calculators for working out how valuable your time is to other people, so go and use one and stop telling people your day rate is a multiple of £50.
Why is it a multiple of £50? Does it make the sums you don’t do, on the accountancy package you rarely glance at, that is basically dealt with by an accountant anyway, easier to pretend to do? Why not give it a go, drop your price by £5 and see if the world comes crashing down about your ears?
Photo by Lisa Sexton