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How do you find out the going rate for your services?

Have you ever watched bats? Have you watched how they dip and curve at lightning speed using their in-build radar to ping back echoes whilst on their search for food – flying insects? Does your freelance teaching business need similar a radar device when it comes to finding out a decent going rate for your freelance teaching services?

Could you rely on your senses to find the correct pricing strategy for your freelance teaching? Or would you need radar to ping back echoes – one to find out how to price your freelance teaching services – without endangering your business by over or under pricing?

Why is it difficult to find out the going rate for Freelance Teaching Services?

How do you find out the going rate for your services? It isn’t often the information people are keen on advertising or make public. This information is not found without difficulty and not without losing a lot of time in market research. It does take quite a bit of digging to get at information of this nature. I suppose at the crux of the problem is the old fear of the “dreaded-competitor-syndrome” again.  🙄

So…

(1) Which methods can you use to successfully find out the going rate for your services? And…

(2) What marketing strategy can you use to establish and set up your own pricing strategy?

And yes! There are time-tested marketing strategies to keep your prices abreast of any inflation.

What time-tested pricing methods already exist?

What are time-tested marketing pricing strategies? These are strategies that have proven their value and use over years and by companies in all industries. These six methods are an overview of time-tested pricing methods:

1)      Calculating your costs

Behind this pricing strategy is a simple formula that only requires a few sharp reflections, a careful eyeing of your business outgoings and a couple of arithmetical calculations. It starts with knowing what you need to live on without worrying about the finding the money for the next rent or mortgage payment, or the next bill. To calculate what you need to live on:

(a)    Calculate both your personal and business costs:
personal outgoings (food, insurance, heating, water, electricity bills, savings, etc.),
business outgoings (tax, insurances, rent, personnel if any, office equipment and materials, etc.)

(b)   Calculate how much time you have available to work;

(c)    Divide your costs by the number of hours you have available to work to find out how much you must earn (per hour) to reach the sum of money you need or want to earn.

2)      Ask others:

Talk to anyone you know in your niche about pricing. However, should you ask forum colleagues on the Internet, be aware that some countries may see this as a form of price-fixing and considered illegal.

3)      Quote an impossible and unreasonable price:

– especially if you are not interested in the customer. But be prepared if they accept! This happens more often than you may realise. But be sure you back it up with solid quality teaching and materials.

4)      Quote a price that sets you up as an “A” level provider:

What are “A” level providers? An “A” level provider is a specialist. Specialists can demand – and get – higher prices. Answer this question: Would you go to your general practitioner if you have a heart problem? Or go straight to a heart specialist?

Again, be sure you back it up with solid quality teaching and materials.

5)      Quote a value-based price:

What is value-based pricing? Value-based pricing is to never quote a price until there is a value determined upon its delivery. A price-by-value is never a price by-the-hour or day. And the pricing is not fixed. It is flexible and determined case-by-case (project basis).

6)      Set up a Yes-Yes factor of pricing

What is the ‘Yes-Yes factor’? I learnt about the ‘Yes-Yes factor’ from Sean d’Souza of Pyschotatics. In a nutshell – do not confuse your students and customers with too many choices. Instead, offer your services at a good price and only give them two maximum 3 choices. These choices can be your services plus different extras or bonuses offered at a higher price for a better price-value performance. In the eyes of the students and customers, the higher price has a better value for money.

What is the best method to start your pricing strategy?

There are two methods that will get your students and customers ignore higher prices. These are your USP and your references (testimonials for our American friends).

1)      USP – your Unique Selling Point

What is your unique selling point?
Decide or set up your unique selling point.
Boil everything you do, down to (a) a single phrase or (b) a single word:

a)      What one sentence describes what you do for your students and customers?

b)      What one word describes you and the service you do for your students and customers?

2)      References references from satisfied students and customers

Never forget to ask for references. Make it easy for them to write one! Prepare a template of not more than six questions about your work. Answering questions is easy in comparison to writing a recommendation from scratch.

What simple methods can you use if you don’t have a “best method” in place?

And when you don’t have a “best method” in place? Here are the best two methods to price your freelance teaching services:

1)      The Dartboard Pricing Method

Finding the right price for your freelance teaching services

Finding the right price for your freelance teaching services

Don’t laugh! I am serious! YOU set your prices. The market works on an ‘offer-and-demand’ basis. If you have positioned yourself well on the market (specialising, USP, references, etc.) the market will accept your prices. Yes, there is a ceiling. But mark my words – it’s not inflexible! However, if you really don’t have an idea on how to judge the price level in your teaching market, use this method:

Pick a dartboard, pin your ‘possible-to-exorbitant’ prices on it and then throw darts. Where the dart lands, that’s your price. Who can really tell you what your price should be? You, and only you. My own experience shows that if you are positioned correctly, the market pays.

An alternative to the Dartboard Method is:

2)      Call up your ‘competitors’

Call up, or ask friends or colleagues to do this for you, 5 – 10 professionals in your niche and ask for their prices and if possible their price lists. When I first started in Hamburg – without a clue to the going prices – I boldly walked into every language school and helped myself to their brochures and price lists. In others where the information wasn’t as easily available, I accompanied my daughter (or friend) who was looking for lessons in a suitable school…

Summary

It is difficult to find out the going rate for Freelance Teaching Services because people don’t advertise or make public the information you are looking for. And you don’t have radar like a bat to ping back echoes for a price. There are, however, a few time-tested methods and they need a bit of time and research to set up. For example:

  • Calculating your costs and the time available you have to work, plus what you need to live on
  • Quote an impossible and unreasonable price
  • Quote a value-based price
  • Set up a Yes-Yes factor of pricing
  • Ask others or colleagues you know already working in your niche. On the internet be beware that in some countries such questions may be seen as a form of price-fixing and considered illegal.
  • Quote a price that sets you up as an “A” level provider, i.e. specialist

On the other hand, the two best methods will also need a marketing strategy and some market research to set up:

  • Setting up your USP
  • References

However, the simplest method (or methods) to find out the going rate for your freelance teaching service when you don’t have a “best method” in place is:

  • The Dartboard Method (and probably the closest to your bat’s radar  😉 )
  • Call up (or ask friends or colleagues to do this for you) 5 – 10 professionals in your niche and ask for their prices or their price lists.

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