Knowing How To Price Your Brand

Knowing How To Price Your Brand

Picasso, Picasso!

“What price should I charge?”

Answering this question seems daunting and is considerably one of the most difficult tasks that we, as entrepreneurs and creators, face while striving to grow and expand our businesses. 

“What if people think my prices are too high and decide not to purchase?”

“If I charge less, can I still make a decent living?”

“Should I start with a low price and then gradually increase with time?”

We can ask ourselves this same question a thousand different ways and come up with a million different fallacious answers but, truth is, there is only one right answer and, luckily, it’s pretty simple. 

Charge your worth!

That’s what the Great Picasso did… and every other legend. 

You’re probably thinking, “What are you talking about, Ky? I need better advice!” Here. Let me put things into perspective for you with a quick story about Picasso and his million-dollar napkin:

Picasso was sitting in a Paris café one day when an admirer recognized him and keenly asked if he could create a sketch on her napkin. Without hesitation, the artist politely agreed, sketched a dove, and signed his name. Before handing the napkin back to the young lady, Picasso asks her for a million Francs.

In disbelief, the woman exclaimed, “How can you ask me for so much? It took you five minutes to draw this!”

Picasso modestly responded, “No. It took me 40 years to draw this in five minutes.”

There’s a lesson that all entrepreneurs can take from this story. Charge your worth. Not everyone will see it, but they weren’t there with you through the late nights, early mornings, blood, sweat, and tears. Your price should reflect all your hard work and the value that you can provide your customers. 

Pricing Strategies

If you are looking for a more clear-cut answer, here is a list of 8 popular pricing strategies and the types of businesses that have had the most success with each of them. Not every strategy will work for every business. Choose what works best for you and your brand. It could be one of these listed below, or maybe it’s a combination of a few.

Hourly

Hourly pricing is popular for freelancers and consultants who offer business services. You are simply exchanging your time for money. Many clients are reluctant to honor this pricing strategy because it can be abused easily, interfering with the efficiency of projects as people purposely extend the completion time for their own benefit.


Project-based

Project-based pricing is the opposite of hourly pricing. Instead of getting paid based on the amount hours spent on a given project, the client gets charged an upfront fee based on the nature of the project and all that it entails. Thus, different projects will require different prices. This strategy is increasing in popularity within the service industry due to its high rate of acceptance and transparency. Many clients prefer this method to the hourly pricing strategy because there are no surprises about the costs. Price is agreed upon before the project even begins.

Skimming

A skimming pricing strategy is popular for people who sell technological products. To “skim” profits, a company will charge the highest possible price for a product and then gradually decrease the price over time as its popularity declines. Apple is one company known for this strategy.

Penetration

The penetration pricing strategy is the opposite of the skimming strategy. Companies enter the market with very low prices to attract attention. Over time, they will gradually increase their prices. If your goal is to make a quick profit, this is not the right strategy for you. Penetration pricing is most popular for start-up businesses who are trying to grow their customer base and gain exposure. Remember when the standard plan for Netflix was only $9.00 a month? The good days.

Premium 

When it comes to premium pricing, think all things luxury. Many businesses will choose high prices to give the impression that their products or services are top of the line, high-value, or prestigious. Consider the fashion brand Telfar. In February 2022 the company announced that they would be dropping their newest handbag, the “Round Circle Bag,” priced at $567.00. This came as a shock to many people around the world because many of Telfar’s previous bags were only $150.00 and have been labeled as “accessible luxury.” The jump in the brand’s pricing came soon after our queen, the only and only, Beyonce, was spotted out on vacation with a white Telfar bag back in July 2021. 

I mean… are you surprised? If Beyonce is spotted with any of my products, the price just went up, honey! 

Premium pricing is an illusion. This method is popular in the fashion industry and helps to bring brand awareness and create a brand perception. Remember, you are your brand. If you want people to believe your product/service is luxurious and exclusive, you should believe it and present yourself accordingly.

Psychological

The psychological pricing strategy is exactly how it sounds. It targets the human mind to boost sales.  Ever wondered why many companies price things as “.99” instead of just rounding up to the next dollar? This is a tactic called the “9-digit effect” and is used to make people believe they are getting a better deal. The psychological process behind this is that humans naturally read from left to right and are more likely to process the first digit they see. “Buy one, get one” deals are another form of psychological pricing and have a high success rate throughout many industries. Some studies have shown that even a small change in the font size or color of prices has proven to increase sales.

Competition-Based

Competition-based pricing is focused on the market rate that a product or service is selling at. Costs and demand are not primary considerations. Instead, price is set based on what competitors in the market are charging. This strategy is used in more saturated industries because companies are aware that if their prices are even slightly higher than their competitors, consumers still have plenty of other options to choose from.

Cost-Plus 

With a cost-plus pricing strategy, the price is set by adding a certain percentage to the costs incurred to sell a product. Whatever profit you want to achieve will indicate how much you should charge. For example, if the cost to sell a fitness set is $40 and you want to make a $40 profit on each set, your price would be $80.00. This is a markup of 100%. This strategy is recommended for businesses that sell physical products.

No matter which pricing strategy you decide to pursue, make sure to consider your customers. Show appreciation by rewarding them with discounts, coupons, or gifts. They are the ones putting money in your pocket and keeping your business alive. You need their support to grow. The least you can do is thank them, and what better way to do that than by saving them some coins? We all love a good markdown! This enhances the overall customer experience and is a great marketing tactic for your business because you are strengthening relationships and building trust which will increase the likelihood that customers return in the future. Offering small samples or free trials is also a quick and easy way to promote your brand. If you haven’t already, give it a try! 

My Pricing Journey

When I started my business journey back in 2018, I had no idea what I was doing. I started by using a penetration strategy and charged people $50.00 for Youtube introductions to make quick money and draw the attention of many customers. This worked for me at the time because the goal was to accumulate as much money possible in a short amount of time. I received an overwhelming number of bookings which allowed me to coupe the financial resources necessary to buy my first set of lashes and start my business. Once I started selling lashes, I had to adjust my pricing strategy to a cost-plus method so that I could reach my goals and bring in a higher profit. If I continued to charge very low prices, like I had with the introductions, I’d be selling myself short. 

Do not disparage your hard work. I was working well over 40 hours a week when I started my business and let me be the first to tell you… it was never easy. I did everything myself from creating the lash cases, prepping orders, printing labels, and designing my own website and logo. Every day was just another day to make my brand better. If you are pouring your all into your business, you deserve to be rewarded for your time. That reward is your income. Raise those prices, sis!

Now, as the owner of Likely Maybe Studio I set my prices based on my own value, experience, and dedication. The term “charge your worth” means giving your all to match your pricing, and I always put 100% into every project and every person I work with because I’m passionate about what I do. Of course money is important, but once you can turn your passion into a career, you feel more happy and more fulfilled because you love what you do for a living. That is something you just can’t put a price on. 

“Choose a job you love and you will never have to work a day in your life.”

- Confucius

Where to start 

So, there’s the answer to that infamous question: “What price should I charge?” It’s not rocket science.

Know your purpose and know your strengths. Ask yourself what your goals are and what it is you’re best at.  This will help guide you in determining your prices. 

For example, say you are a new permanent make-up artist and know that you’re not the best at microblading. You may need to temporarily charge a lower price for that service until you become more experienced and earn the right to increase your price based on your improved skillset and increased demand. That’s okay! We all must start somewhere. Luckily, a lot of times where we lack in one skill, we make up for it in another. This is known as a specialty. So even if you’re not the best microblading artist in town, you may be a superstar at creating killer ombre powder brows, which allows you to charge an above average price for that service. It all balances out.

Your price will also vary based on your business goals. Is your goal to grow your business over time and gain loyal customers? Penetration pricing. Is your goal to create a prestigious brand persona? Premium. Maybe your goal is to take advantage of a current trend and make quick money off it before it loses popularity. In that case you might want to consider a skimming pricing strategy.

Pricing is very subjective. Don’t feel the need to put a concrete amount on everything. Using the “starting at” technique is always recommended. This will protect you in unique circumstances, giving you the leeway to adjust your price when necessary. Start with the strategy that feels right to you and your brand. It’s your business, you have full control. 

The Girls that Get it, Get it

Why did you leave your job to become an entrepreneur? I bet it wasn’t to be broke and unhappy. Entrepreneurship is a beautiful concept. What you put into it is what you get out of it. Prioritize your business so that you can provide your customers with high quality products/services and have that luxury of charging higher end prices. This is where dedication and creativity are salient. You’ll never regret investing in yourself, whether that be time or money, when you’re truly able to enjoy the fruits of your labor.

Stop worrying about what to price your products and start thinking about how you are going to make your brand the best that it can be! From there, everything will fall into place. 

You got this, girl!