“I just started a small service business out of my home.  Because my overhead is absolutely rock-bottom, I can charge significantly less for my services than my competitors.  I just set up a website for my business, and I’m thinking of putting a ‘price list’ on the home page showing the prices I charge for different services.  I want people to see just how affordable I am.  But a couple of friends have told me this would make me ‘look cheap’ and is an unprofessional thing to do.  Are they right?"

This is one of the toughest marketing decisions for any service business.  The answer will depend on (1) the services you are providing, (2) the customers you serve, and (3) how much you want to be locked in to a specific price structure.

Your Services.  Generally, if the service you provide is a “commodity”, such as landscaping, where “flat fees” are normally charged for specific services, it’s a very good idea to post your prices on your website.  If your service is more “professional” in nature, such as marketing consulting, with lots of variables that will affect the prices you quote for specific jobs, then it’s probably not a good idea to post specific prices, although you might want to consider posting your hourly rate, a list of factors that will affect the price quoted for a specific job, and perhaps some “ballpark estimates” of prices you have quoted for the most commonly requested services.

Even within a particular profession, your decision may vary depending on the “culture” associated with the specific services you provide.  For example, a lawyer specializing in wills, trusts and “estate planning” work for wealthy individuals will probably not post her prices on the web for fear of being perceived as “low class”. 

Your Customers.  If you are a consultant for large, publicly traded corporations, you absolutely should NOT post your prices on your website.  Corporate clients will indeed think you are unprofessional if you post your prices on the Web, and will question whether you truly understand the corporate market.

If your clients are entrepreneurs, small business owners, and people (like yourself) who work out of their homes, then you absolutely should post your prices on your website.  These folks are extremely price conscious, they are generally squeamish about negotiating prices, and they probably think they can’t afford services from anyone in your profession.  Offering them a “menu” is a great way to send the message not only that they can afford you, but that you really care about them because you will be sensitive to their budget.

Locking Yourself In.  Once you have posted prices on your website, you are “locked in” to those prices, and may have a tough time changing them when you realize you set them incorrectly.  If you are not 100% sure what your prices should be, or if there are factors that might cause you to quote different prices for identical jobs, don’t post specific prices on your website.

I currently have two websites for different aspects of my career.  Here are the decisions I made in each case about posting my fees:

The first site is for my law practice.  Since I deal only with small businesses and their owners, I posted an extensive list of prices for certain matters I commonly handle for my clients, such as reviewing contracts and leases, forming corporations and limited liability companies, and other transactions for which I can charge a “flat fee”.  Just the fact that I charge flat fees for certain legal work is enough to set me apart from my local competition.

The second site is for my professional speaking activities.  While I do have “standard charges” for keynote speeches, panel discussions, and all-day seminars, I prefer not to post these on my website, because different circumstances can lead to different price quotes, and I need to ask lots of questions before I can quote an exact price.  For example, someone who wants me to give a one-hour keynote speech in Philadelphia, which is only a two hour Amtrak train ride from my home, is going to be quoted a lower speaker’s fee than someone who wants me to give a one-hour keynote speech in California.  While the two speeches may be identical, the latter will require a cross country plane trip and one if not two overnight stays in a hotel, which will take me away from my law practice and otherwise disrupt my life to a much greater extent than the Philadelphia gig.

One more thing:  when you change your prices, be sure you update your website before you start quoting difference prices in your e-mail and telephone communications with clients.  Leaving outdated prices online is one sure way to get an angry response from a client who’s been paying higher prices and then stumbles upon your website while Googling something else . . . 

Cliff Ennico (cennico@legalcareer.com) is a syndicated columnist, author and former host of the PBS television series 'Money Hunt'.  This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state.  To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com.  COPYRIGHT 2009 CLIFFORD R. ENNICO.  DISTRIBUTED BY CREATORS SYNDICATE, INC.