If you’re a wedding industry entrepreneur, you know that setting percentage-based prices can be a challenge. You don’t want to undercharge your clients, but you also don’t want to overcharge them and risk losing their business. In this blog, Nicole Mower from Nicole Mower Events shares her three best practices for setting percentage-based prices. By following her advice, you can ensure profitability, sustainability, and scale in your business.
Nicole Mower is a wedding planner who has mastered the art of percentage-based pricing. While doing this for a few years, she has a wealth of knowledge to share about the different ways that you can implement percentage-based pricing in your business.
When it comes to setting percentage-based prices for wedding industry entrepreneurs, there are a few best practices to keep in mind. First and foremost, it’s important to make sure that your percentages are based on your overall costs, so that you’re not losing money on each transaction. Secondly, it’s important to be consistent with your pricing, so that your customers know what to expect and can budget accordingly. Finally, do not take for granted the vendor recommendations you recommend, these are invaluable, giving your customers highest quality service for the best price! By following these best practices, you can ensure that your percentage-based pricing is fair and profitable.
Here are the steps you need to follow:
1. Don’t be afraid to charge percentage based pricing – it’s more fair for the client and for you!
2. Use a hybrid model of flat fee + percentage to ease into it.
3. Practice selling percentage based pricing with friends to get comfortable with it.
If you’re thinking about implementing percentage based pricing in your business, the first step is to overcome any fears you have about charging this way. It’s more fair for the client and for you, so don’t be afraid to charge what you’re worth. You can start by baby-stepping from flat fee to percentage based pricing, by charging a flat fee plus a percentage.
This will help you get used to the new pricing model and help your clients understand what they’re paying for. As you get more comfortable with percentage based pricing, you can move to charging a percentage only, with a minimum fee. This will ensure that you’re always getting paid for the work you put in and help avoid any resentment towards your clients.
Always be transparent with your clients about your pricing. They should know exactly what they’re paying for, and how the pricing works. This will help build trust and avoid any confusion or frustration down the road.
The first step is to come up with a minimum fee that you’re comfortable with. This is the fee that you will charge regardless of what the final cost of the event is. Next, you’ll charge a percentage on top of that minimum fee. This percentage will be based on the final cost of the event. The idea is that this will help to cover any additional costs that may come up as the event is planned. This hybrid model of flat fee + percentage is a great way to ease into percentage based pricing, and it will help to avoid any resentment that may come from feeling like you’re not being compensated for all of the work you put in.
Be sure to communicate your pricing structure to your team so that everyone is on the same page. This will help to avoid any confusion or misunderstandings down the road.
If you’re considering switching to a percentage-based pricing model, one way to ease into it is by charging a flat fee plus a percentage. This allows you to be transparent with your clients about what the minimum cost will be, while still being able to adjust for any increases in scope. For example, if a client books a $3,000 DJ, you can add a $300 production fee on top of that. This way, there are no surprises and clients understand what they’re paying for.
In the beginning when Nicole was a little bit nervous and a little bit unsure, she would get more questions. But something that really helped her was to role play sales calls. Actual mock sales calls with vendor friends. Years ago when she worked for a tent company as a sales consultant. She said it was kind of goofy, but it really does help, especially with friends. They’re going to know the kind of questions a client might ask you. Great practice!
I’d love to hear how you apply to get Profitability, sustainability, and scale. Leave me a comment on how it went for you in our Facebook Community!
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I help creative business owners sustainably scale their business so they can create a thriving career and work-life balance.
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I have experience speaking at both live and virtual events, educating creative and wedding entrepreneurs how to step into their role as CEO. If you're looking for speakers for your next conference, workshop, event, or the next guest for your podcast, I'd love to see how we can collaborate!
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