When you’re new in the industry and struggling to find clients, pricing your services low might seem like the best option to bring you more bookings. But before you go slashing your prices and packages, let me explain exactly why low pricing doesn’t work for event planners and wedding planners.
For a more in-depth look at how to effectively charge a fee for your event planning services be sure to check out our blog post and Workbook.
1. Low-Value Comparison
Low pricing can be equated to low value in your potential clients mind.
Think about when you go shopping for a product. If you’re comparing two products and all the features are exactly the same, how do you make a decision? By default, most shoppers will use price as the deciding factor.
Let’s use a more practical example. I was recently shopping for a blender. I knew what I wanted in terms of features.
- It needed to be able to blend my smoothies in a jiff without leaving clumps of fruit still unblended.
- It needed to not be noisy because I love blending in the mornings when everyone in my home is sleeping.
- And it needed to seamlessly blend in with my kitchen decor.
When I went shopping for the blender, I found two that fit all my requirements perfectly. However, one was cheaper than the other. Considering that this was an investment, I didn’t want a cheap product. Suddenly I became skeptical about why one blender was cheaper if it had all the same features.
Now if this was an everyday product, I would have not thought about it twice about buying cheaper. But because this was a product that I knew I wanted around for a long time, and that I intended to use, again and again, I wanted the higher quality not lower valued.
Wedding planning services are the same.
While some clients will shop around based completely on price, not all clients will. Clients who value having their wedding day planned perfectly without any issues will often look at the perceived value if your services are priced too low.
In their minds the questions become:
- Why is he/she priced lower?
- Are they cheaper because they are less experienced?
- Will this mean they won’t know everything that’s needed for my wedding?
2. Increased Competition
The second way in which low pricing can hurt your event planning business is that it actually increases your competition.
If you’ve never heard of the blue ocean strategy, this is the time to start reading carefully.
The blue ocean strategy says that when your price is lower it puts you in an ocean with more competitors. Since more often businesses will try to compete based on price.
In the area where there are lots of competition (aka sharks), there is a ton of biting and fighting to get to the same clients. This is the viscous area of the ocean where you have to be cut throat to get those clients in the door. This ocean then becomes red – you know from all that biting? – graphic, I know, but stay with me.
According to the blue ocean strategy, the further away you go from your competition, whether that is through higher pricing or just differentiating your services, the further away you get from the red ocean and to the blue ocean (less biting).
But why do you want to be in the blue ocean? Well in the blue ocean there’s less competition around, and clients that come your way are more likely to be looking for a shark like you, and you’re more likely to hook that client because there isn’t 10 million other sharks around waiting.
Now that I’ve ruined your appetite with that analogy, let me summarize. Essentially, pricing your services low will increase your competition and make it more difficult to book clients.
3. Attracts Discount Shoppers
The third way in which low pricing hurts your event planning business is that it attracts discount shoppers.
Now you might be thinking, what’s wrong with that?
Discount shoppers in themselves aren’t bad, I mean who doesn’t love a good discount? I know I do. But if the main reason that someone is hiring you is because you lowered your price, then you have to think about if this is your ideal client.
Here’s the thing with luring customers in with discounts, it gives the impression that your service, which for event planners comprises your time and creativity is up for negotiation. And once you’ve put that out there the expectation will be that you should be willing to discount on other areas as well.
I say this from personal experience, but clients who are willing to compromise the quality of their event to save a couple of dollars will not see the value of your service.
They will also be the clients who continuously expect discounts through your entire planning process. And why shouldn’t they? If it was so easy for you to cut $1000 from the price of your services, this probably indicated to them that it was priced too high, to begin with.
Conclusion: Low Pricing Hacks
While it might seem like a good strategy to price your event planning or wedding planning services low. I promise you it is not. Instead of lowering your prices, work with your customer to see what they are comfortable paying financially. Then think about how you can work within that budget. Or look at what services you might be able to add as an “upgrade incentive”. This can be used for example as a reward for booking, rather than lowering the price of your services or packages.
As I mentioned at the beginning of this post, check out my workbook for pricing your event planning services. I review step by step exactly what you need to look at to come up with your perfect price. I also show you how to calculate your hourly price, package price and minimum booking price.