When I plan to monetize my services, I find it hard to price them. I bet you can relate to me and may wonder how to price your services in the Philippines. Also, just like me, you’ve come to realize the importance of pricing your services. Personally, one crucial thing about it is making an extra income the moment you price your services. In addition, it shows the value of what you can offer to a client.
So, how to price your services in the Philippines so that all your costs are covered and you’ll eventually get a profit? In this article, you will know the steps and strategies on how to price your services in the Philippines with given examples for better understanding. Moreover, you’ll get tips on pricing your services as a freelancer or consultant in the Philippines. Ready? Keep reading.
Note: This article is about pricing your SERVICES. If you’re interested in knowing how to price your FOOD PRODUCTS, head on to our guide on How to Compute & Price Food Products (w/ example).
Steps on How to Price Your Services in the Philippines
Here’s how to price your services in the Philippines. Take a look at the following steps.
Step 1: Know and analyze your costs of services in the Philippines.
Let’s say your service is writing blog posts to finance bloggers in the Philippines just like me. The number one cost of this service is an internet connection. As you know, research is a must for writers and can be done through the internet. Another thing, writing blogs cost you a portion of electricity as you’ll be using a laptop or desktop. Speaking of a laptop or desktop, this will be a separate cost however you can set this as one time cost. In addition, some writers still maintain a pen and a notebook with them. Accordingly, these are considered your costs too. Lastly, your website and domain name are also a cost. It’s where you incorporate your writing portfolios and eventually, your blogs can be a business in the Philippines that requires you to have your own website.
Costs can be divided into two categories such as fixed and variable costs. Fixed costs are indirect costs that don’t change regardless of whether your earnings increase or decrease. While variable costs are direct costs that change as your earnings increase or decrease. With the above-mentioned costs, let us categorize them as shown below.
| Fixed Costs | Variable Costs |
| 1. Internet | 1. Laptop or Desktop |
| 2. Electricity | 2. Pen and Notebook |
| 3. Website and Domain Name | – |
Step 2: Look and identify your target markets.
Your service is meaningless if it hasn’t been offered to your ideal markets. Going back to our service example which is my service to The Thrifty Pinay, writing blog posts wouldn’t be the service needed for logistics and delivery service in the Philippines, right? To simplify, identifying your target market is to find out what your markets’ preferences are. For instance, my markets are finance bloggers. Somehow, their preferences are the writing tone, style, and knowledge on the topics. While keeping in mind the rates your competitors charge, pricing should be in line with the value that you can offer to your ideal markets.
Step 3: Take into account the time invested in pricing your services.
The costs and markets of your services are not the only things to consider when pricing. There’s time that you need to put into account. For instance, in writing blog posts, time is undeniable. As a content writer, research costs a lot of time to me. And there’s still writing the draft, editing, proofreading, and so on. Well, as a beginner too, I only charge a fair price to my clients.
Consider how much time you devote to providing services. To help you determine reasonable pricing, keep track of how long it takes you to complete a project. Moreover, take into account your experience in the field. The more experience you have, the more value you bring to your services. As an expert in your field, you may typically charge more.
Step 4: Determine a profit and set service rates whether hourly or per project.
Some service rates are negotiable depending on your client’s budget. Let’s check the below computations to also determine your profit.
- Profit margin
The key to a profit is a fair margin that will come up after deducting all the costs you have. Let’s say you’re just a beginner and you set a 5% profit margin. Let’s use this formula:
Service Price = Total Cost + (Total Cost x Profit Margin)
Source: https://www.patriotsoftware.com
For example, your total cost is P500 (assuming you have the spare laptop, pen, and notebook that you don’t need to purchase anymore) times 5% is P25 plus P500 equals to P525 as your service price. As you can see, you already attached the 5% margin resulting in a profit of P25 after deducting total costs of P500 from the sample computation of service price.
- Per Project service rates
Assuming your monthly cost is P1,000 and you plan to work 40 hours a month which is equivalent to 10 hours per week (2 hours/day). Then you devote a 5% profit margin. Using the formula above, in a month you’ll charge P1,050 for one service project.
- Hourly service rates
Having the same example, first, get the hourly rate by dividing the total cost of P1,000 by 40 hours. The answer is P25. Then, multiply P25 by your desired profit margin of 5% resulting in P1.25. Lastly, add this amount to your hourly rate in order to get your hourly service rate. Thus, your service rate per hour is P26.25 which is equivalent to P1,050 in 40 hours of working a month.
Do keep in mind that these are just simplified examples and the figures aren’t realistic at all. By following the above steps, you can now choose a pricing strategy that is best and doable for your services in the Philippines. Continue reading to know these strategies.
Pricing Strategies for Services in the Philippines w/ Examples
Pricing your services involves more than just figuring out the costs and applying a markup. How much your clients are willing to spend on your services should be your top priority. Therefore, you need to find a pricing strategy that suits you. Here are the common strategies in the Philippines that you can choose.
1. Bundled Pricing Strategy
In general, bundled services cost less than buying each service separately for a customer. This strategy, when used well, is a terrific method to upsell more services in the Philippines and increase your revenue.
When I once started to offer my freelance writing services, this is the common pricing strategy I used. In addition, I’ve noticed a lot of writers used this strategy too. Let’s go over the sample below.
2. Value-based Pricing Strategy
Set a rate depending on the benefits (value) your service offers. For instance, business owners who hire assistance services pay more for the time it saves them to do administrative tasks like setting appointments or meetings than doing such tasks on their own. By valuing your services, you can charge a premium and avoid the all-too-common price that takes place with some clients.
3. Cost-plus Pricing Strategy
Determine the total costs of your services and then add a profit margin to use this pricing strategy. To generate a 10% profit margin, for instance, if your total cost is P500, simply charge P550. This is the simple formula shown in the above example of calculating per hour and per project rate. Thus, the cost-plus pricing strategy is already illustrated above.
4. Competitive Pricing Strategy
From the word itself, a pricing strategy that’s based on what the competitors charge for the services. But take note, even if your rivals can provide you with an excellent concept of where to start, keep in mind that your service is distinct. To illustrate this strategy, let’s use virtual assistance services as our example as shown below.
Let’s say you’re the virtual assistant #2, as you can see above with competitive pricing you have the same price as your competitor. However, the services you offer show a distinct part by leveling it up which could catch the attention of your prospects. That’s how this strategy works and helps you.
Eager to know more? Keep on scrolling below.
How to Price Your Services as a Freelancer in the Philippines
As mentioned earlier, I find it hard to price my services. And it’s one of the many struggles of a freelancer in the Philippines, isn’t it? That is why it’s important to have knowledge of what’s going on within the business and the market itself to validate how much you should charge to your clients in exchange for your services.
So, what are the factors to be considered in setting your price as a freelancer in the Philippines? Here they are as follows.
1. Operational Cost
Anyone’s primary goal is to earn a profit when offering services. To ensure that you are earning more than enough, have all your operational costs covered then add a markup. By this, you can safely assume that your business is sustainable and in a good position. Record your costs on a monthly basis and determine your acceptable profit rate to come up with a pricing that favors you, your business, and your clients.
2. Competitive Pricing Practices
You can use this as a basis to not price your services too high or too low. Because setting the price too high will be unreasonable on the other party and if you charge too low your business will be compromised. Checking on your competitor’s prices through inquiry or their social media platforms will help you gauge your pricing. Checking the market trends in and outside the Philippines will give you ideas if there are significant changes in your industry.
The table below shows the competitive average rates according to job titles that are recognized globally.
3. Perceived Quality
This is the value that determines the price. How much does it cost your client for the service you offer? What will be the advantage of working with you compared to other freelancers with the same offer? Knowing your value as a freelancer and backing it up with excellence will help you increase your rates over time as long as your client recognizes the impact and is satisfied with your service.
How to Price Your Services as a Consultant in the Philippines
As you know, business owners have a lot going on in their minds such as operations, client-getting, possible expansion, and their personal lives. Oftentimes, they need a helping hand when it comes to decision-making. Thus, a consultant comes into the picture. As a consultant in the Philippines, you have solutions that would greatly benefit the client’s business and will make way for higher rates, right?
But, how do you determine your consultancy fees in the Philippines? Here’s how.
1. Determine your value.
You are an expert in your field and knowing the ins and outs of a business is your strategy. Be confident and believe that you can provide solutions to the client’s business problems and deliver quality ones. Surely, money will follow that you’ll be able to price reasonable consultant fees.
2. Do your research
With the innovation of technology, you can find out your current market value through various search engines and research on pricing your services. Additionally, inquire about a consultant who offers the same services as yours. Make a comparison and consider the lifestyle you have and the tax you’re able to incur, as these are variables to your costs in pricing your services.
3. Discuss your acceptable rates.
It is important that you and your client meet halfway in terms of negotiating rates. I’ve mentioned earlier talking about service rates can be negotiable to clients. Since you’re working towards the stability of the business, pricing too high might add to problems instead of solutions. Remember, the client doesn’t depend only on how many hours you’ve worked but on how you can create an impact on its business. How you solve the recurring problems and anticipate possible issues that are invisible to the client’s naked eye. Your net worth increases as you work on different projects.
- Related Post: 40 In-Demand Consulting Business Ideas Philippines
And that’s it! I hope you have learned how to price your services in the Philippines. Among those steps, strategies, and tips mentioned earlier, apply what you think is doable. And remember, the best thing in offering service is how you can help your clients.
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How To Price Your Services in the Philippines (w/ Examples)