In my last article you saw a list showing billing rates, 12-month-earnings, and the number of bids submitted for the top listed virtual professionals on Guru.com. This article will take you the next step on your journey to analyze and understand competitors. By following my thought process, you'll be able to conduct your own competitor price analysis. You'll also discover this takes focus and hard work.

I created a spreadsheet and entered paid job data for virtual businesses in the table published in the last article. I wanted to know where each seller was located, the identity of the seller, what they charged per hour, how much revenue they earned in the last 12 months, and then statistics on each paid job they sold and completed. For each job I wanted to learn where the buyer was located, the lifetime value (total $ earned from this buyer), a description of each job, how many invoices were involved, the average invoice, and how much each job earned the seller. I focused on jobs completed and paid in 2012. All of this information was entered into an Excel spreadsheet so I could analyze the data. This has become the basis for my second Special Report on virtual service earnings.

The individual invoices to buyers are as low as $25 and as high as $5,000. The average invoice was $313.87. Some buyers spend a lot of money purchasing virtual support offshore. One buyer in Arizona paid $293,405 in the last 12 months for service work done virtually. This pushed the average job value in my spreadsheet up to $12,886, but the typical revenue among the 218 jobs that I entered into my spreadsheet was about $40 (Figure 1).

 

Fig. 1. Dollars Earned Per Job.

The median job value was $75 with an average of 16.1 invoices per service provider. This information can give you a sense for the value of this industry and why you should really study your competitors.

There is still a lot more money to be made out there helping buyers. So develop your own research and analysis tools so you can spot and exploit opportunities as they occur. Use other resources (like our tools) to make your research easier and faster.

Start by collecting competitor hourly rates. Billing rate data can help you create a price distribution chart that can show you how prices are grouped according to markets. (This will be discussed in a future article.) Next study actual paid job data. This will show you what jobs are selling and which have the greatest earnings potential. From billing rates and job prices you can develop your own pricing policy. And you can position your business for maximum profit.

About the author:

Robert Brenner is the president of Brenner Information Group (http://www.brennerbooks.com) and the author of Small Business Guide to Pricing and Pricing Tactics. He can be reached at brenner@brennerbooks.com. You can also purchase the spreadsheet at http://www.brennerbooks.com/firstpage.html