There seems to be some businesses out there that feel a sense of guilt charging more for their services out of fear customers won’t be able to afford those prices. It’s a problem referenced in an article on Inc. about setting the proper price ranges for products a business sells. But how can you basically calculate your worth so you don’t find any guilt in charging enough to make profit?
No matter how generous you might be, you have to lose all assumption that people won’t always pay top dollar. After you calculate your worth, adding things like superior customer service will help the customer understand that they’re paying for high quality.
Calculating Your Net Income for the Year
If you need a net income that fits your lifestyle, you need to calculate it in accordance to what prices you’re charging. Those who charge less for an expensive product are obviously going to come out with less net income after taxes. But based on what you want to make to support your lifestyle, you can guesstimate how much you should be charging for your products or services. For products that requires a big budget to produce, you’ll have no choice but to charge more without losing money.
The Every Girl blog notes that some businesses feel guilt about charging more because they feel the product doesn’t provide enough value despite being expensive to make. In those scenarios, it may be time for you to revise your product so it provides more value to the people who buy it.
Believing in Your Product Helping People
Assuming your product really does have value, you shouldn’t be ashamed to charge more for it if it can truly help solve a problem. And that’s the real impetus for any product or service existing in the marketplace. While there might be degrees in how valuable that problem solving is, your price should also be based on what it can do to help people.
That doesn’t mean you shouldn’t provide some alternative bargain products in your business for those who simply can’t afford to buy your top inventory. Those bargain products or services should also provide some kind of value so there isn’t a feeling of being condescending.
Estimating the Value of Your Entire Business
You should also look at what your business provides as a whole that makes you charge what you’re worth. As mentioned above, providing a superior customer service almost always warrants charging a little more because of the extra mile you take to make your customers feel valued.
Inc. wrote once on how customers are going to pay more when they have the feeling of being valued. It doesn’t matter how cheap the product might be in its materials. If you charge more for a product that isn’t as expensive to produce, you still shouldn’t feel guilty if you provide it with classy service.
The above is the true secret to finding a middle road between charging more and giving back to your customers. In the end, you both win in different ways, especially if your product successfully solves a problem that incited the sale in the first place.