I read this today and thought that it applies directly to us as professional dancers. We are, essentially, freelancers.
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The Subtle Effects of Pricing on the Mentality of Clients
from FreelanceSwitch - The Freelance Blog by FreelanceSwitch.com
feeds.feedburner.com/~r/Free...6262261/

Most freelancers hate dealing with pricing. We would rather focus on what we do best, and as a result, pricing sometimes doesn’t get enough thought and attention.

Pricing obviously has a huge impact on how much money we make, but what about its affect on potential clients?

--Ways that Pricing Impacts Clients--

While these items are not absolutes, they certainly should be examined and taken into consideration as you are developing a pricing structure for your services.

1. Their Level of Expectation

When clients see a high price tag they’re going to expect a high quality of work. Of course, it’s possible that the client will not have an accurate idea of what price is high and what is not, but most will also look at the prices of some other freelancers and compare.

If clients expect a higher level of quality with a high price, is it safe to assume that they will expect a lower quality of work with services that are lower priced? Not always.

I believe it depends on the client and the type of work that is being done. Many bargain shoppers for web design services tend to seek out a freelancer based on a low price, but still expect the same quality of work that they would get if they were paying twice as much.

From my experience, bargain shoppers usually don’t realize that there is a huge variance in terms of quality of design services as well as in terms of the services provided (for example, a static HTML and CSS-based design as compared to a more complex database-driven website). Those clients who truly understand the difference in quality tend to avoid lower-priced providers in favor of higher priced and higher quality services. When this is the case, pricing services too low only has negative consequences.

2. Their Impression of Your Skills and Experience

Logically, higher-priced services would indicate better skills and more experience, whereas lower-priced services would indicate lower skill levels and less experience. If you’re able to charge a high amount in comparison with other freelancers your work must be able to justify that price, right? By raising your prices you can generally improve the perceived quality of your services, unless your portfolio clearly indicates otherwise. On the other hand, lowering your prices can give clients the impression that your work isn’t able to justify any more money.

3. Your Level of Urgency

In some cases, low prices can indicate to clients that you’re desperate for work. After all, if your work is worthy of higher prices, why would you charge lower amounts unless you were having trouble finding work? Some potential clients may not be bothered by this thought, but others will wonder why you don’t have any other options and it may lead to second thoughts about your ability to get the job done.

On the contrary, higher prices can tell clients that you are not desperate for work. If they’re willing to pay your rates, great. And if not, someone else will be willing to, because your work is worth the expense.

4. Your Level of Professionalism

Most clients see the work done by freelancers as professional services that require them to pay for a certain level of service. If they see prices significantly below the rates that they expect, they may question the level of professionalism of the provider.

If you see an offer to create a custom website for $100, what is the first thing that comes to your mind? I think most of us would assume that the work would be done by someone with poor skills and poor communication, or by some kid working out of his mom’s basement; in other words, someone who is not truly a professional.

While the country in which someone lives is not at all relevant for many freelancing jobs (assuming they can get the job done), the level of professionalism is important. Unfortunately, the varying costs of labor around the world make it possible for freelancers with very little experience to drastically undercut prices of professionals. As a result of this trend, many clients are skeptical of the level of professionalism when low prices are involved.

--An Additional Impact--

While all of the factors above focus on the impact that prices have on potential clients, there is also an impact on the mentality of freelancers themselves. While clients will often associate a certain level of quality with the cost of the services, this can also affect the freelancer’s mentality. You may not realize it at first, but over time you will probably come to see that the prices you charge your clients will have a somewhat subtle impact on how you view the level of quality of your own work.

By constantly charging rates that are lower than other freelancers, you’re bound to develop the mindset that your services aren’t on par with the services of others. Likewise, charging higher rates will cause you to view your services in a positive light. This mentality can carry over to your quality of work, because it is subconsciously what you expect from yourself.

--Conclusion--

Because of the significant impacts that prices have on potential clients, freelancers should seriously consider what their prices are communicating to clients. The thought of pricing services low to secure more work can have serious consequences, and it may not even result in more work. Your prices should not be any lower than they rightfully deserve.

Make an effort to find the ideal pricing for your services. If you’re unsure of what this may be, try some different things to see what tends to be optimal, and ask other freelancers in your network about their own pricing so you can compare.