Should we charge as much as we can?

Well man, you are talking about commodities. We need to add value. So if you can add value to a $3.99 hosting plan, say by being really responsive or adding more services, then go ahead and raise your price.

If you're going to be a web designer, then I hope you have style. You can do cookie-cutter, and charge small, or you can add value by being a real designer.

I can buy a $1 hamburger, and I can buy a $20 hamburger (darn those fancy hotels!). Someone could try to under cut the $20 burger, but they'd have to sell me on why since I'm already in the hotel and value why I'm there.

Live by price, die by price. How do you add value? That's the question to answer.

I agree with Jason.
Charge what you are worth.
Your worth is determined by the value you provided.

No matter what your product or service, you are free to charge whatever you like.

In day to day life, when I need to purchase something, I weigh (research) all my options to include pricing, value, benefits and overall the "difference" in the product or service. Sometimes I choose to go with the low, sometimes it's the high, or the middle, it all depends on my needs and what I feel is a good value.

To go off the "purse" analogy, I've had a Target purse and I've had a few Coach bags...I know they both carry all the same items and function the same, but I prefer the Coach because it's prettier, and makes me happy...and it lasts longer!

With our business (and it's the same with everyone here), there will always be someone that is more or less than you, but they will never be YOU and provide what you provide. Sure, someone can pay 7$ per hour for what I do, or you can pay me what I charge and get all the experience and benefits that come with my price. If you don't want to, then by all means, use someone else.

Value yourself, and others will value you. Those that don't can enjoy the pain of getting what they pay for.

You said two things that are wrong.
Like Jason said, you are not selling commodities. You are selling services. You are selling expert recommendations. You are selling peace of mind.

You said;
"researching for options and prices is the responsability of the decision takers at every company"

That shows that you are trying to justify something you feel is wrong. And that's incorrect thinking. Never cheat your client. Never take advantage of them if they have money.

Offer your best advice. Give it serious thought. Explain it clearly. Now you are giving real value beyond selling "500 blog posts".


If you don't feel you are worth what you want to charge? Get better at the service you offer until you are actually doing your client a favor by working with them.

"Charge enough so that you love your clients. Give them good enough service that they love you"

Pretty good advice, I think.

Yup, I will go with the designated accountant to do my taxes every time.

Why? Well I have a business and expenses and I'm afraid I'll miss something that will save me money. So doing my own taxes or having software take me through it just isn't good enough. The Liberty Tax folks are too cookie-cutter for me. I'm not a dumb guy, and I have 3 years of accounting training, but that doesn't mean I know the tax code. I actually have an hour a month built into my budget for accounting services--whether I use it or not, it's there.

I met my accountant at a BNI meeting a year and a half before I moved back to town and had enough business to merit using him. But I knew he was "my guy". Why? He impressed me that he a) knew his stuff, b) had been around a long time, but wasn't so big he wouldn't take my call, and c) charged a helluva rate--not too low, but lower than it should be because of his perception of local competition. In other words, I believe I get fantastic value from him.

Trying to illuminate why someone would happily go with the more expensive option here.

In a previous life I sold managed services. That's where a tech comes in and takes care of your workstations, antivirus, cables, operating system and the like, on a regular basis. A business could certainly hire its own IT guy or contractor and take care of this need for less than the $90/hr we charged. But it's a hassle...the owner probably doesn't understand IT and doesn't know what they're getting...and I positioned us as knowledgeable about business as well as IT and therefore all about keeping their business up and running. Made a big difference.

Are you stopping someone from having to lie awake at night worrying about whatever it is you do? Do they acknowledge that by bringing you on board, they won't have to worry about it anymore? Now you're providing value. Now you can raise your price.

It is finally about charging for ignorance and taking advantage of it as well, to some extent at least.

I touched on this a bit in your other thread.

The problem isn't the price. It is the value of what you provide.

A $299 website is not the same as a $10k website.

Yes someone out there may find a way to get a guy to spend $10k on a basic 5 page wordpress site but the customer has certain expectations. You can't over promise and under deliver.

You can add value to anything and charge more. But you can't simply charge more because you want to. Well you can but you can not expect to be successful with that plan.

People pay more for Apple products because they are precieved to be better. Would Apple's pricing work if my iPhone broke as fast as my last Samsung smart phone? Of course not. The truth is that Apple products are better and are easier to use. They also are more profitable because they realized that people will spend more for quality. We all bought iPods for $299 while other companies had trouble selling $99 MP3 players. The reason was the iPod worked well and was built well. It had a high value.

That's the key to pricing high you have to provide or at least create a perception of value.

Let's look at your examples.

Hosting: $30 vs. $4 doesn't matter. As a business owner/manager I would rather pay $30 a month and know someone was handling it. The value is in the fact it is hands off. Yes it costs 7+ times as much but both amounts are small. I hope everyone here can say they have wasted over $30 on a meal before. So if it's that little no business owner will worry about it as long as it frees their time or perceieved time like hosting does.

Websites: While a business owner might get lucky and get a $1500 value website for $200 that will take them effort to find. Having someone take care of it that they can trust is worth paying the true value. And a 5 to 10 page website even made with a template has a real world value of $1,000 plus. If someone wants to sell that for $200 and work for peanuts let him. That said you would be hard pressed to get a business owner to pay $10k for such a basic website unless you built up your precieved value.

Designer Bags: If you do not think they have value beyond the $50 they cost to make please feel free to buy a cheap fake and see the quality difference. Like Apple they create a qaulity product and then charge a premium for it. It isn't just a cheap bag with their name put on it. You can get those fakes and you can see the difference in quality just by looking at them. Maybe that quality is only really worth 4 times as much as the cheap knock off. But buying from a brand you can trust as quality allows for a premium.

Now to your business plan. Here are the choices your customers have.

Free: Simply use the services like Facebook and Twitter directly. If they are not a power user this will make a lot of sense.

Free: Hootesuite's basic plan. Once again if they are not a power user and want to do it themselves why not.

$10/mo: Hootesuite's paid plan: As a do it yourselfer this might be worth it since it's what I spend on average for lunch.

$200+/mo: Your solution which is still do it yourself though it has been made to be localized.

$200+/mo: A semi to fully managed social media service. These guys will handle it all for them and will likely use a service like hootesuite behind the scenes.

And that is the issue you are not adding anough value for $200 or $300.
To use your service they have to
1. Have a need to use social media as a power user.
2. Spend a few hours a month on it.
3. Give you $200+ for your dashboard.

If I am a marketer selling my service for semi or fully managed social media solutions you know what I am going to do? I am going to target every one of your customers. I know they will pay $200 plus for a DIY solution which means I can likely make $500 plus by helping remove them from the personal time element. Yeah I might have to spend or outsource a few hours of work per month but I can show my value to them.

Now to make matters worse you said you were planning to target people who are not tech savy. So you are targeting a service that is....

1. DIY
2. Over priced
3. Designed for social media power users

to someone that isn't tech savy?

You can not just make a product or service and poof have people buy it. Honestly step back and ask yourself the following.

1. Am I targeting the right people? Do they have a need for my solution?
2. Will my prices maximize profits? Aka would you rather make $10/client with 100k clients or $150/client with 50? And what if you would attached the 100k clients with less effort than the 50?
3. How come my white label service provider is charging me more than Hootesuite charges end users? A classic retail rule is you make money when you buy not when you sell. Are you buying at the right price?

I think if you sit back and really look at your business model you will see it is doomed to fail. But the basic idea is great. And if you listen right now I am about to provide you with gold. Here are some basic ideas that you can put into action which will work and make you money.

1. Provide a managed or semi-managed social media solution to businesses. This is the perfect sell to the non-tech savy people you want to target and fits your price well. You can use cheaper solutions like hootesuite to run the campaigns. No need to pay for an over priced solutions.

2. Create a Latin American version of hootesuite. This will cost more money upfront but could lead to a buy out for a few million dollars within months. Many companies in the world merely copied the business of a US company and made a local version. Some because local successes. Some were bought out by that original company. And yes some failed. But it is a sound business idea and worth the risk if you have the financing to pay for the custom coded website and service. Yes it is a bigger risk but it is also a greater reward.

Either of these will work. But you current business plan IMO will not. You can keep creating threads to try to convince yourself it will but you know as well as I do deep down you know I'm right. So refocus your efforts, change gears, and reach that final goal on a modified path.

They should get what they have paid for, always never they should not get that value on the $$$ they've paid for. I will get mad of course if I am your client and I've found you are charging me hundreds of dollars but the quality and value of your services is the same as the one in fiverr. They are all right here, make sure add value and guarantee of course.