Your Price Isn’t Just a Number, It’s Part of Your Strategy and Positioning

Let’s face it, we solopreneurs and small business owners often start our businesses without thinking much about strategy or positioning. As a result, we often set our prices too low.

Low prices may seem like an easy way to attract customers. But they can make it very hard to earn a profit, pay yourself fairly, and keep the business running long-term.

But to set the right price, we first need to understand strategy.

So what is strategy? I know it sounds complicated and may bring to mind large corporations, expert consultants, and thick business plans bursting with tables and graphs. But the basic idea is dead simple.

Strategy is your plan for how you will win.

Think of your business as a team entering a tournament. Before each game, the team studies its own strengths as well as the other team’s strengths and weaknesses. Then it decides on what it must do to win. That’s strategy. You need it because you have competitors who want the same thing you do, to win customers.

Or, imagine that you’re the only plumber, baker, photographer, or bookkeeper in town. Since customers would have no other choices, you wouldn’t need much in the way of strategy. Anyone who needed your service would have to come to you.

But that’s not the world we live in, is it?

Your customers may have dozens, hundreds, or even thousands of choices. They can hire another business, do the work themselves, delay the purchase, or decide they don’t need it after all. They’re also bombarded with ads, emails, videos, websites, and social media posts all day long. The market is loud, crowded, and full of choices.

You need strategy because you have armies of competitors, and strategy explains how you intend to rise above that noise and give customers a good reason to choose you.

Once you understand strategy, you can begin to understand positioning. Positioning is the place your business holds in the customer’s mind compared with all their other options.

To illustrate this, think about someone shopping for a car.

They may think of Mercedes-Benz, BMW, or Lexus when they think about luxury cars. They may think of Toyota, or Honda, or Subaru when they think about value and dependability. Each brand creates a different picture in the customer’s mind about what makes that brand special.

Customers do the exact same thing with small businesses. They may see one provider as the cheapest, another as the fastest, another as the safest, and another as the most experienced.

All this means that your positioning answers an important question:

How do you want customers to see your business?

Do you want to be known as the lowest-priced option? The luxury option? The neighborhood expert? The fastest provider? The most personal and caring service? The best choice for a certain type of customer? Since you can’t be everything to everyone, you must decide which space you want to own in the customer’s mind. That’s how strategy and positioning work together. You study the market, your competitor’s strengths and weaknesses, understand your own strengths and weaknesses, choose the customers you can serve best, and decide how you will stand apart.

Like I said before, this isn’t brain surgery. It’s simply about making some clear choices. So where does pricing fit into all this?

It’s helpful to think of price as a signal to the customer.

It tells customers something about the quality, value, and position of your business.

Imagine that you need a plumber. You search online and find several companies. You read their websites, look at their reviews, and ask for prices. Because you’re not a plumbing expert, you may not know how to judge the quality of their work. So you use the information you do have. And perhaps the most important piece of information is the price. If one plumber charges far less than everyone else, you may wonder whether the work will be good. If another plumber charges far more, you may expect better service, greater skill, a stronger guarantee, or a faster response. The price alone doesn’t prove that one company is better but it definitely helps shape what the customer expects.

Customers make these kinds of judgments every day and that’s why your price must support the position you want to hold in their minds. Price is thus a positioning tool and positioning is part of your strategy.

Unfortunately, many small business owners believe that low prices will help them compete and attract more customers, faster. That can be true. But keep in mind that sometimes the opposite happens.

A very low price can make customers question your quality. Remember, as many customers do, that “you get what you pay for.” But if you do attract more customers because of a low price position, it doesn’t mean you’re winning. Such positioning may leave you without enough money to do excellent work, improve the business, or stay open.

You also don’t have to jump to the other extreme and position yourself as the most expensive or premium provider. Such a position requires a lot of resources, time, and expert branding which we as solopreneurs or microbusiness owners can’t easily access, at first.

Luckily, you don’t have to be the cheapest or the most expensive. You can choose a high-value position: charging a fair, profitable price for work that delivers meaningful value to the customer. Such a business position allows you to charge more because you intend to win the game of business by offering better service, proven quality, stronger expertise, greater care, or a better result.

Toyota is probably a good example of this positioning.

Toyota is rarely the cheapest car brand, and it’s not positioned as luxury. Its value comes from reliability, durability, fuel economy, resale value, and lower risk of expensive repairs. Your business can make a similar promise. You can say, in effect:

We are not the cheapest option. We are also not charging high prices just to look fancy. We charge a fair premium because we provide useful, dependable, and valuable work.

Then the real work begins, delivering on that promise.

By now, I hope it’s clear to you that pricing your goods or services is not something done in isolation without consideration of other aspects of your business. You have to make all the pieces work in concert. In other words, your strategy, positioning, price, message, and customer experience should all support one another.

• Your strategy explains how you plan to win.
• Your positioning explains how you want customers to see you.
• Your price signals the level of value they should expect.
• Your marketing explains why your work is worth that price.
• And your service proves that the promise you made was true.

When these pieces match, your business becomes easier to understand and easier to trust and your chances of success go way (way) up!

It’s when they don’t match that the trouble begins. Customers become confused and when customers get confused, they usually don’t buy.

Now that we’ve covered all that ground, let’s recap and talk in practical terms.

We begin by facing facts. We work in a crowded and noisy market. Most customers aren’t waiting for our businesses to magically appear. We must earn their attention and give them a clear reason to choose us.

That requires strategy, a way to win, so let me propose a possible winning strategy you can start using right away:

Give your customers the best of YOU.

Why? Because I believe you have something tremendously valuable to give to the world and that something, is not some generic service, or a commodity imported from China, it’s something much more precious: it’s YOU!

By YOU I mean your talent, your gifts, your life experience, your triumphs (as well as your mistakes and failures), your skills, your strengths, your quirks, your knowledge, your expertise, your passion, your support; in a nutshell—your LEADERSHIP.

We need YOU to show US a better way.

I know it’s been said too many times before, but in my mind it bears repeating, that you are one of a kind. There’s only one of you in the whole wide world. No competitor or soulless corporate chain can replicate who YOU are. ChatGPT or Claude can try, but they’re pathetically weak imitations. They can also try to clone you, but even your clone can’t be YOU, just like identical twins are very different people with different God-given gifts.

The way for you to win as a solopreneur or microbusiness owner is thus to give the world the best YOU, you possible can. That’s what I would call a solid strategy. Hard to replicate.

Next, you must decide what place you want to hold in the customer’s mind. That requires positioning. Which, again, goes back to YOU. By being unafraid to be uniquely you, a talented individual who truly cares about his or her customers, you stake a unique position in your potential customer’s mind. As the old proverb goes, “People don’t care how much you know until they know how much you care.” If that’s true then with every move you make, show them how much you care, how hard you’re driven to help them succeed, solve their problem, or get what they want or need.

And that right there, is why you should choose a price that supports that position and communicates the massive, unique value you bring to the table, and allows your business to earn a healthy profit that helps provide for your needs.

Yes, I know this requires courage and careful thinking, but I also know that you can do it.

I hope you can now see that pricing isn’t just a number plucked from the ether, or posted on a website or an invoice. It’s stands for much more and it’s part of the grand story your business is trying to tell.

And if you want customers to accept your price, you must learn how to tell that story well.

That’s what we’ll discuss next.