These are the 5 things you need to know about the pricing formula…
1. Population.
The bigger the geographic area, the more likely you’d be able to demand a higher price. That doesn’t mean a lower population is bad. Nor does it mean you should factor in a high population with too much regard. This is one simple factor of the equation.
2. Average “Price Tag.”
In case you didn’t know, this plays a crucial role in the pricing process. Why? Because you should always base your pricing in terms of your prospective clients’ Return on Investment (ROI). The higher the price tag, the easier (and faster) you will be able to deliver a return. That’s why we stay away from the “poodle fluffer” niches! 😉
3. Actual Competition.
This is often overlooked. It may even indicate whether or not you have a good niche to pursue. Why? Let’s say you have a niche in a city with 200,000 people. But… There are only 2 businesses competing. Well, they may not be highly motivated to invest in marketing as a business that is competing with dozens. And this plays a crucial role in the pricing strategy.
4. “Exact Match” Keyword Competition.
Don’t confuse this with your content plan and ranking keyword research (click here if you want to know how good keyword research is done). Again, This part is NOT intended for researching the keywords you are ranking. This is different. This is simply an exercise to “take the temperature” of the overall search engine competition. All you need to do is Take a very general (broad) local keyword and put it in “quotes” and search it on google – to get an idea of how many competing sites there are.
Here is an Example of a broad term put in “quotes” – it has over 46k results.
For example, I would never target “realtor Austin” as a keyword for ranking (it’s too broad), but for the sake of checking the temperature, this is a perfect keyword. The higher the number, the more competitive. This has an impact on the overall effort of your work and therefore plays a role in pricing.
5. Cost Per Click
You should know what a prospective client is prepared to pay for “being on the board.” This ties into the entire notion of having a pricing strategy with ROI in mind. Remember, ROI extends to savings as well. Head over to Google Adwords Keyword Planner and enter the same keyword you used from before (See #4 Above). Now look at the data and determine an average. Don’t overthink it, just look at the first 3-5 results and average them out to have a general idea.
I would estimate this to be around $2.50 just from a quick glance
If you know the current costs businesses are investing in this niche and geographic area, you will be able to demonstrate even more value in your pricing.
Okay… I have gathered all this intel. Now, How do I use This to Come up With a Pricing Strategy?
Good question!
Take the info you just collected and take all of 30-seconds to plug it into the…
Now You Should have a good idea of what you can expect a client to easily pay you for your awesomeness!
Rock On!
😉
Questions, Comments, Suggestions, Wanna Share Some Comment Love or Aha-Moments? Please Share Below 🙂
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Ben is the co-founder of The 2RockStars and a board member of JVZoo. He is a lifelong entrepreneur who dedicates his life’s work to helping turn ordinary entrepreneurs into “time independent” Rockstar Entrepreneurs! Above all, Ben is a family man. More important than having achieved building multiple million dollar income streams, His family is his greatest accomplishment.
Ben is more than a thrill seeker, he is a true business man, he just makes it look easy. Although he will tell you he works his ass off, he loves every minute of it and follows his passion. He is genuine, and a blast to be around. In his words: “Keep Rockin!”
