Branding & Pricing: What's their relationship to your business?
Ever wondered what the relationship between the two are?
If you’ve invested in branding, that will definitely have an effect on your pricing. One of the main goals of branding, is to in fact, increase the demand for your services, which in turn would allow you to price higher, and here is where you see your ROI. But let’s back up and take this step by step. I’m going to lay out a couple of points about pricing that you should know first…
• Money goals: what do you want to be paid of your time?
My thoughts: If you haven’t taken time to establish your money goals (just as important as other business goals you’ve laid out), then how do you have a measuring point to say whether your business is doing well or not?
• Industry (standard) pricing: what do your competitors charge?
My thoughts: It’s important to have this reference point because the fact of the matter is, you’re not alone in your industry. Nine times out of ten, there will be at least one other person doing the same thing you do in your business. Take the time to study their pricing methods and see where you fair. Perhaps there’s an opportunity to offer your customers a better offer for your goods or services.
• Level of expertise / # of years in business: are you established? can you position yourself as a go to person in your industry (i.e. expert)?
My thoughts: Number of years in the field doesn’t always equal knowledge or ability. But one thing remains true in any industry: with time, you gain wisdom. The faster you are to humbling yourself and realizing you don’t know it all in the beginning, the smoother the journey. Be open to absorbing as much as possible and know that this will effect pricing.
Industry newbies tend to price lower, and often times will bring in more clients or customers due to the fact. But nothing replaces experience and wisdom. Pricing accordingly based on those factors, may also present an opportunity for your to target a new group.
• Factors that go into producing service or product (materials, travel, time, etc): how much does it cost to create your product or service?
My thoughts: I don’t have the formula for this but there is one out there. Common sense tells us that our profit needs to out way our investment into the business, yea? Make sure to slow down and take the time to do this math. Hey, there’s all sorts of accounting software out there (like quickbooks or freshbooks) or hire an accountant. A financial professional might be able to help you find some wiggle room in your budget or help you produce an annual budget all together. This, of course, will effect how you price your goods and services too.
All of these questions are extremely relevant to the fact. Take the time to go through them and really get to the bottom of your positioning in the market and how that will effect your pricing structure.
Whether you are a service based business or product based business, you need to have goals laid out as well as the confidence to carry them out. If you’ve done your research and put the time into what it takes for you to charge for this knowledge, then just own it darling. Once your goals are established, try working backwards to figure out how much you should be “paying” yourself per hour.
For example: If you hope to make X in a certain length of time. Then how many units of goods will you need to sell to make X? Don’t forget to factor in how long it takes you to make 1 unit.
NOW LET’S TALK BRANDING.
First off, it’s good to know that BRAND and BRANDING are two different things. Where brand speaks to the building of your business, the purpose behind your business, who your customers are, how you’re going to serve them, the experience you want to instill, etc. (seriously, we could go on for hours here), branding, on the other hand, is how all of these elements are visually compiled; i.e. THE LOOK.
All roads through both of these processes point to you being viewed as an established and credible business. So it stands to reason that you need to brand, before branding.
"branding is what people say about you when you’re not in the room"
HOW DO THESE TWO FIT TOGETHER?
An established brand has built an audience within their niche, solving their pain points (or problems) in one way or another. Their story has been told - so their audience knows them. Their marketing foundation has been laid - so their audience likes them. Their product or service solves their customers pain point - so their audience trusts them.
Ex. 1: Take Brooks Brothers for example: they are not the only store to sell professional button up shirts. However, the quality of their product and creating a wrinkle free shirt has attracted that specific market niche - solving the pain point of a good quality shirt that doesn’t wrinkle.
Because of this unique product and their established brand, they charge more for this product and their audience happily pays it. This is a good example of pricing for your market.