What is value based pricing?

I have been working with brand strategy for professionals from the healthcare industry, such as psychologists, who deal every day with the challenge of building trust and position their price fairly, once their expertise it’s almost impossible to show, depending 100% on referrals and experience. 

One recurring struggle is the moment to put a price on their services. It’s a delicate dance once they are truly connected with their patients on a personal level, seeing the necessity and emergency of the treatment and devoted to helping with everything possible. In the moment of truth, they feel their client’s concern about the price and tend to position themselves at a low rate.

The truth is that the same person who hired them for long-term treatment with a rate below market will book an international (and well-deserved) trip at the end of the year, which represents 10 times the price they have paid for that super important service.

The ugly truth in this scenario is that: they just did not value that service as much as the trip. It’s a matter of value and perception. We are not talking about humanitarian work (which we should do for free as much as possible), but a fair positioning when delivering a great value and expertise, with the potential of transforming one’s life.

Pricing is a way of positioning that will attract similar customers (informed by the price from your previous buyer). So, before setting your price, assess your expertise, market value and reflect on the necessary distance between you and the added value your service offers.