How to price your credit repair services
By Brett on October 23rd, 2007
You may charge whatever you like for your credit repair service. However, charging too much will leave you with no clients. Charge too little and you will be out of business before you get started. To succeed, you must select a price that will cover your operating costs as well as demonstrate value to your customers.
Here are some preliminary steps to develop your pricing strategy:
1. What are your production costs?
The first step is to determine your “production cost,” that is, how much it costs to run your credit repair business. These costs consist of “fixed costs” and “variable costs.” Fixed costs include rent, salaries, computers, insurance - basically any item cost that does not change. Variable costs fluctuate based on the amount of services you provide. These costs include envelopes, postage, hourly wages and sales commissions (the good news is if you have more variable costs you are selling more).
2. Analyze other credit repair businesses
Take a look at how much money other reputable credit repair businesses charge. Conduct research in local markets as well as on the internet. Credit repair companies use a variety of pricing strategies including monthly fees, one-time fees, and per deletion fees. Before you decide, conduct some market research and field trials. Try several different pricing models to see what customers respond to best. You may also want to vary your pricing depending on your strategic goals. For example, if you are just starting up, you might want to charge an intro price for a short time to attract new customers.
3. Any additional services you can offer?
Are there any additional products or services that your company can offer? This could give you an advantage over competitors. For example, Lexington Law offers several different service levels and add-on products such as credit monitoring and education. You have an advantage over competitors if you offer additional value-enhancing products. Look for ways you can make more profit for your company by having more products or services.
4. Is your service unique?
Evaluate the uniqueness of your service. Typically credit repair is credit repair and you will want to price similarly to your competitors, but if your company offers a higher level of service than the norm you will need to price your service to reflect this additional value. One pricing model is a concept called benefit pricing. This is the idea that perceived value is associated with price. Thus, the greater the benefits the more you can charge. However, the more money you charge the higher the expectations your customers will have!
IMPORTANT TIP: No matter how you decide to charge, you must follow the Credit Repair Organizations Act guidelines on billing consumers. Read What you must know to operate a credit repair business for more information.
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