One of the toughest things to come up with is the right pricing for your product or service. I had recently a fun experience between trial and error to come up with my pricing for a new service and I wanted to share it with the rest.
Earlier this year, a crazy idea hit me in the face . I decided maybe it is not as crazy as it sounds, spent couple of weeks planning how this will play. Packed my bag, and traveled half the world to expand my company overseas and offer a service for the first time. Interviewed people, hired team of SEO experts, trained them, and figured I put out a very competitive offering with low rates, this is definitely a big win or at least I thought at the time
I came back home and launched my service with the lowest rate I can afford, less than $2/hr, I figured nobody can compete with that. I done my home work and expected as always to burn cash first before I see real results. 1st Month I ran with that rate, and my conversion rate was zero and few thousands in ads cost. As I start adding more services and burning more money on advertising (nothing that was promoted differently from the original offering), I had to raise my rates. Once my rate jumped above $2/hr, I start getting clients slightly, one at a time, every couple of weeks I would increase the price slightly and as a result I get more people people hiring us for their business.
When I first launched the service for less than $2/hr, the only thing I was getting on regular basis are people who are questioning the service, after all there is that concept "if you give out a peanuts you get monkeys"
As my prices start maturing up, I realized while people expect a low price, going way lower than the average / minimum of marketplace can actually play against you.Not only I was getting the service questioned as low or bad quality, but I was getting a specific type of people who would be bugging me all the time for every small and big thing.
Now that the price has matured, I am getting only a quality customers for the most part ( small - medium business owners who appreciate what I am offering and actually value it for the rates that is being offered ). I also want to highlight that nothing in my campaign (landing page, chat, communication) has changed but the rates, the landing page exactly the same.