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Price Strategy is different in Service Businesses

Thomas, D. (1978, July). Strategy is Different in Service Businesses . Harvard Business Review. https://hbr.org/1978/07/strategy-is-different-in-service-businesses behind paywall  The more abstract and complex the service, the greater the need to develop reputation.  service businesses rely entirely on type and quality of service (reputation) they deliver  being consistent in the delivery of the SAME quality of service  value of a service is determined by a customer ... not the provider .. but the value can be marketed to customers so that they can perceive it customer must have some means of "experiencing" the service .. to recognize value  further complicated by the need to review, revise and update services (a moving, ever changing target)  capital is typically a barrier in product based businesses - service based businesses have no such moat to prevent others from competing  
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Price your services

Wasserman, E. (2009, November 1). How to Price Business Services | Inc.com . Inc. https://www.inc.com/guides/price-your-services.html Pricing there is no formula on how to calculate it  need to calculate your operating expenses  monthly rent insurance utilities  admin costs overhead  mileage advertizing  depreciation  taxes your target profit  difference between your operating expenses and selling price  factors to consider  competitor's pricing  businesses doing same / similar type of service  check their website call them  note how you set yourself apart from them (differentiation)  needed to convince the customer of enhanced value  perceived value to customer  not time but value given to the customer  they seek your expertise in realizing X (peace of mind, quality, efficiency, better than what they could realize)  need to factor for  materials to deliver service  labour  your work efforts to deliver what they expect  your subcontractors efforts  overhead  expenses (see above)
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5 Common Pricing Strategies

BDC.ca. (n.d.). The 5 most common pricing strategies . BDC.Ca. Retrieved January 15, 2022, from https://www.bdc.ca/en/articles-tools/marketing-sales-export/marketing/pricing-5-common-strategies “How much the customer is willing to pay for the product has very little to do with cost and has very much to do with how much they value the product or service they’re buying,” says Eric Dolansky, Associate Professor of Marketing at Brock University in St. Catharines, Ont. 5 Strategies  Cost-plus pricing —simply calculating your costs and adding a mark-up Competitive pricing—setting a price based on what the competition charges Value-based pricing—setting a price based on how much the customer believes what you’re selling is worth Price skimming—setting a high price and lowering it as the market evolves Penetration pricing—setting a low price to enter a competitive market and raising it later How do you arrive at a  value-based  price? Dolansky provides the following advice for entrepreneurs
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