Entrepreneurs second-guess pricing because they undervalue intangible benefits like time savings, convenience, and client relationships. They also wrongly assume customers are solely price-driven, when loyalty is affected by many other factors.
Benchmarking against competitors is dangerous because they may have already made pricing mistakes. Furthermore, you might offer superior value under the same service name, meaning you'd be severely underpricing your more comprehensive offering.
A single hourly rate prompts a binary yes/no decision. Offering several packages changes the customer's question from 'Should I hire them?' to 'Which option is best for me?' This assumes the sale and focuses the decision on the method of engagement.
To sell more of a $300 package instead of a $200 one, introduce a $500 option. Most won't buy the decoy, but its presence shifts the customer's reference point, making the $300 package appear more reasonable and valuable by comparison.
To set your price, ask clients what they would do if your service didn't exist. Their answer, like hiring a full-time employee, reveals the 'replacement value.' This figure provides a concrete benchmark for your pricing and uncovers powerful marketing language.