Ask yourself what your service or product is worth

Article written by Jannie Rossouw, Head: Sanlam Business Market

In a competitive market environment business owners are prone to sell themselves short, because they do not take the time to determine a fair and justifiable price for their services and products.

There are so-called “value drivers” that support the charging of a premium for your service or product, if:

  • It solves an expensive problem for the client.
  • It saves the client money.
  • It increases the client’s turnover/profit.
  • The demand for your service/product is high and there are only a few providers.
  • You have a good track record with regard to delivery.
  • You provide good warranties.


You can also consider the following pricing alternatives:

  • Per hour.
  • Per project.
  • Per unit.
  • Per solution.
  • Per result.
  • A “freemium” model – provide a basic solution for free, but charge a premium for greater functionality.
  • Based on volume (use a sliding scale for a volume discount).


The following factors can also influence your pricing strategy:

  • The price and value offering of your competitors.
  • The market trends within your industry.
  • The value your product/service has for a client.
  • The difficulty of the work that must be done.
  • The resources necessary to complete the work.
  • The expected time frame within which the work must be completed.


“Pricing is actually a pretty simple and straightforward thing. Customers will not pay literally a penny more than the true value of the product”.
Ron Johnson (American Businessman)

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