Choose Your Pricing Strategy: Value, Cost-Plus, or Competitive for Personal Errands
You run a personal errand or concierge service. You pick a pricing strategy, but often it's the wrong one. Cost-plus seems safe. Competitive pricing seems fair. Value-based feels like a gamble. This guide will show you how each pricing method works for your type of business, when each one wins, and how to pick the best one for you.
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The quick answer
For personal errand and concierge services, value-based pricing often makes you the most money. It means you charge for the relief or time saved your client gets, not just your hourly rate. Cost-plus works best if you're buying things for clients, like groceries, and adding a markup. Competitive pricing is a last resort if your service isn't special.
Side-by-side breakdown
Cost-plus pricing: You figure out your exact costs for an errand (gas, supplies, your hourly pay) and add a profit percentage on top. For example, if buying groceries costs you $5 in gas and 1 hour of your time at $25/hour, your cost is $30. You then add 20% ($6) to charge $36. It's simple, but you might be leaving money on the table if clients would pay more for their time back.
Competitive pricing: You look at what other errand runners or TaskRabbit pros charge in your area. If others charge $30-$45 per hour, you set your price in that range. This is easy research, but you take on their problems. If they're undercharging, so are you. It often leads to everyone lowering prices to win work, which cuts into your pay.
Value-based pricing: You charge based on the benefit your client gets. What problem are you solving for them? How much is that problem costing them before they hire you? A busy executive might save 2 hours by having you pick up dry cleaning. If their time is worth $100/hour, you saved them $200. You price your service based on a part of that $200, not just your cost to drive there. This requires you to understand why they need you.
When to choose cost-plus
Use cost-plus for your errand service mainly when you are buying physical goods for a client. Think grocery shopping, picking up prescriptions, or buying office supplies. You track the exact cost of the items, add a small markup (say, 10-25%), and then charge for your time on top. This is also useful if you get big contracts that demand a clear breakdown of costs, like working with an elderly care facility to manage all their residents' supply runs. It's less about your service time and more about the item's cost plus handling.
When to choose value-based
Choose value-based pricing when your personal errand or concierge service solves a clear problem that saves your client time, stress, or even money. For example:
Time saved: A busy parent needs help with school drop-offs and grocery runs. They value their family time at home more than driving. Your service gives them back those precious hours.
Stress avoided: An elderly client can't drive to appointments or handle paperwork. Your companionship and assistance remove their worry and ensure they get vital care.
Opportunity cost avoided: A small business owner needs administrative tasks done but can't hire a full-time assistant. You handle tasks like package shipping or supply restocking, letting them focus on making money.
For these clients, your hourly rate is less important than the outcome. Price based on what that peace of mind or extra time is worth to them, not just your gas and time.
The verdict
Here's the final word for your errand and concierge service. First, figure out your absolute lowest hourly cost to operate (your gas, car wear, phone, your bare minimum wage). This sets your price floor. Second, check what other local services charge to get a price range. Then, and this is key: ask what problem your client truly needs to solve. How much is it costing them to not have it solved? Charge 10-20% of that value you deliver. Many errand runners charge too little by focusing only on their hourly time, not the huge benefit they bring.
How to get started
To start, grab a pen and paper.
1. Your Cost Floor: How much does it truly cost you to run one hour of service? (Gas, car maintenance, phone, basic supplies, your minimum hourly pay). Let's say it's $20/hour. 2. Competitor Price: What do other local errand runners or senior companion services charge per hour? Check online. Let's say the average is $35/hour. 3. Client Value: Pick one past or current client. What problem did you solve for them? How much time, stress, or money did that problem cost them before they hired you? If they're a busy executive, your grocery run might save them 2 hours they'd spend driving. If their time is worth $75/hour, you saved them $150.
If your current hourly rate is closer to $20 than to $150 (even 10-20% of $150 is $15-$30), you are likely undercharging. Next time you talk to a client, simply ask, "What was life like before you hired me for [service]? What was that problem costing you?" Their answer will show you the real value you bring.
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FREQUENTLY ASKED QUESTIONS
Can I use multiple pricing strategies at once?
Yes. You might price your base tier competitively to win against alternatives, then price premium tiers on value. The strategies are not mutually exclusive — your floor is cost-based, your ceiling is value-based.
Is value-based pricing only for expensive products?
No. A $29/month tool that saves 5 hours a week is deeply value-priced — the value is far higher than $29. Value-based pricing is about the ratio of price to outcome, not the absolute dollar amount.
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