“You can’t always get what you want. You can’t always get what you want, but if you try sometimes, you might find, you get what you need.” -Rolling Stones

How do you effectively price your services?

Charge too much and you will scare potential customers off. Don’t charge enough and you will lose out on revenue and possibly lose customers who believe that cut rate prices mean cut rate service.

In the best of times, this is a sticky problem. These days, with free cash at an all time low, and everyone thinking up any way they can to avoid spending, it can be the problem faced by entrepreneurs trying to monetize their businesses.

What’s the answer? The secret has been deftly concealed in the lyrics at the beginning of this article.

You’re not Wal*Mart.

You should understand this right off the bat. Small business owners and their teams wear too many hats for that. Your cost of customer acquisition will always been higher than a larger company, and the cost for servicing individual customers, even if it’s small, will also be larger. Marketing, advertising and PR all cost time and money, making each person who walks through your door a precious commodity. Competing on volume is a tough gamble.

You’re a lot more like Brookstone.

Brookstone doesn’t compete on price. There are a lot of cheaper places to buy a desk clock, but you go to Brookstone not because you’re trying to get the clearance rack special. You go to Brookstone because you’re looking for design, quality and innovation.

People should come to you because you can offer them something that larger companies cannot give, quality and personalized service. When you understand that this is your primary value proposition, Jagger’s lyrics start to make a little more sense.

Don’t charge what you think your product is worth, that number usually vastly understates your true value. When developing pricing, look at your competitors and be willing to price yourself on the same level.

Not only will you avoid both of the dangers of under-pricing yourself but this will also give you room to discount. It’s always easier to lower prices than it is to raise them, so setting your “real” price a little higher gives you a buffer to work within. You might not be able to get that price all the time, but if you try, you will almost certainly get a higher price than if you built your discount in upfront and tried to compete on volume.

Getting what you need means at least trying to get what you want.

Pricing is complex but don’t make it so complex that you lose track of what people are actually paying for — good service, customer care and a more personalized experience than they could get at the Wal*Mart’s of the world.

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