- PRICING STRATEGY: PRICE SKIMMING!
- PRICING STRATEGY: GIVING YOUR PRODUCT/SERVICE FOR FREE
- SHOULD WE COMPARE OURSELVES?
- WHAT SHOULD WE MEASURE WHEN WE EVALUATE OUR MARKETING EFFORTS?
- WHAT IS THE VALUE OF A CUSTOMER?
- DOES CONTENT MARKETING WORK?
- WHAT IS THE DIFFERENCE BETWEEN A BRAND, BRANDING, A PERSONAL BRAND AND A COMPANY/PRODUCT NAME?
- WHAT IS GROWTH HACKING?
- HOW MANY « P » CAN BE FOUND IN THE MARKETING MIX?
- THE CUSTOMER VALUE CHAIN
- HOW CAN YOU PROTECT YOUR UNIQUE PRODUCT OR SERVICE?
- CONFERENCE ON FINANCING - MAY 2, 2017
- WHAT IS DRIP PRICING?
- WHICH AMOUNT SHOULD YOU CHOOSE FOR YOUR PRICES?
- DETERMINING YOUR HOURLY RATE BASED ON THE VALUE YOU THINK YOU HAVE
- IS LOWERING YOUR PRICES A GOOD IDEA?
- TO OFFER OR NOT TO OFFER FINANCING?
- HOW TO PROTECT YOURSELF AGAINST EXCHANGE RATE RISKS
- WHEN IS A GOOD TIME TO INCREASE YOUR PRICES?
- DEMAND BASED PRICING
- WHAT IS A LOSS LEADER?
- HOW TO ORGANIZE A DRAW THE RIGHT WAY?
- HOW TO HAVE REMOTE EMPLOYEES
- IS IT GOOD TO BE FIRST IN A MARKET?
- THE THREE TYPES OF CUSTOMERS
- EXPORTING TO MEXICO - QUERETARO REGION
- DEFINING BUSINESS SUCCESS
- ARE YOU USING REBATES? WATCH OUT FOR THESE
- IS THE CUSTOMER ALWAYS RIGHT?
- EXPORTS AND QUEBEC COMPANIES
- COWORKING SPACES
- YOUR PLACE OF BUSINESS AND INTERNET
- WHY IS SOCIAL MEDIA IMPORTANT FOR YOUR BUSINESS?
- HOW TO USE FREEBIES
- WHAT IS THE MAGICAL FORMULA FOR HAVING SUCCESS IN BUSINESS?
- DO YOU HAVE EXPERIENCE IN MY FIELD?
- WHEN CAN WE STOP OUR MARKETING?
- WHAT IS A CALL TO ACTION?
- WE ARE ALL SALESPEOPLE; HERE'S HOW TO GET THERE
- HOW CAN MARKETING AND SALES COLLABORATE?
- HOW TO SELL MORE TO YOUR EXISTING CLIENTS
- WHAT IS CROSS-MARKETING?
- WHY SHOULD I SEGMENT?
- WHO IS RESPONSIBLE FOR MANAGING YOUR COMPANY'S IMAGE?
- HOW TO CHARGE FOR YOUR PRODUCTS / SERVICES?
- HOW TO DEFINE YOUR PRICING STRATEGY: PRICE POSITIONING
- HOW TO DEFINE YOUR PRICING STRATEGY: MARKET PRICING
- WHAT PRICE SHOULD YOU SELL AT? - COST-BASED PRICING
- WHAT IS A PRODUCT?
- HOW TO MARKET YOUR NEW BUSINESS?
- IS BUYING A FRANCHISE A GOOD WAY TO START A BUSINESS?
- HOW SOCIAL MEDIA HAS CHANGED WORD-OF-MOUTH
- HOW SOCIAL MEDIA HAS CHANGED PUBLIC RELATIONS
- WHAT IS BRANDING?
- WHY INCREASING SALES IS NOT THE SOLUTION
- HOW TO SELECT YOUR COMPANY NAME?
- WHY HAVING A WEBSITE IS ONLY THE BEGINNING?
- WHAT IS MARKETING?
- HOW TO MAXIMIZE THE VALUE OF YOUR SOLE PROPRIETORSHIP BUSINESS
- WHY SELLING IN MEXICO?
- LOW COST MARKETING INITIATIVES
- WHY IS PRODUCT DIFFERENCIATION IMPORTANT?
- hOW TO PRESENT OUR COMPANY
- WHAT IS THE DIFFERENCE BETWEEN MARKETING AND PUBLICITY?
- 50% OF YOUR ADVERTISING BUDGET DOES NOT PRODUCE AS MUCH AS THE REST
- RIGHT SELL AND OVER DELIVER
DETERMINING YOUR HOURLY RATE BASED ON THE VALUE YOU THINK YOU HAVE
This pricing approach is not part of the traditional ways of determining an hourly rate, but in my career I have seen this approach so many times that I feel I need to talk about it here.
I have met several people in the service industry who determined their hourly rate based on a perception of their value. For example people who had friends or colleagues, doing something similar and who earned a particular hourly rate, were influenced in their thinking when the time came to establish their price. Their level of education also weighed in the analysis. Same thing regarding past experiences (I met several trainers with university experience who wanted to have the same hourly rate in the private sector).
It is a way of evaluating your price; which, even if it brings some useful elements, remains highly emotive and relies only in part on an analysis of other aspects to establish the price. What will weigh the most in the balance will be a system of social value based on the hourly rate: I am a professional with 10 years of experience, I must charge $ 150 an hour for example. Or my friend who works in a major company earns $ 150,000 / year, to do the same job that I am doing, I should earn at least the same amount.
There are elements that are valid in this comparison, but the whole situation must be analyzed, not just the elements that suit us. For example, a professional who is in a reputable office with several associates and support staff, charges $ 150 an hour for the same number of years of experience you have. You are self-employed, work from home with the help of an assistant, and you do not yet have the high-profile customers. Then your hourly rate could be lowered. Unless you would rather have fewer customers. The same applies to university lecturers. Of course the hourly rate is high, but it usually does not cover hours spent doing homework and grading exams as well as allowing time for questions. If a private company offers you a mandate that does not involve grading and additional periods, some flexibility may be required.
Another important factor is the impact that a change in the hourly rate can have on your business volume. You're starting out, being stubborn and charging $ 35 an hour which could give you 15 hours of work per week ($ 525) is less profitable than charging $ 25 an hour and being able to get 30 hours of work per week ($ 750). Over a week, it is a $ 225 difference, but over a year we are looking at a difference of more than $ 10,000.
If your choice is to work less, then asking for a high hourly rate is quite valid. But if your goal is to start your business, having an hourly rate that brings in business is more important for the short and medium term. In the long term you can always adjust your pricing when your waiting list is full.
If you have any questions or comments on this topic please do not hesitate to contact me.
Stéphane Elmaleh-Riel, B.Ed., MBA