Female Proprietors Underprice Services

by Joy Keller on Nov 01, 2006

If you’re a woman and you own your own professional-service business, chances are you tend to charge less than your male counterparts, according to a research paper examining the effect of gender on pricing practices (“A Behavioral Study of Pricing Decisions: A Focus on Gender,” presented at a national meeting of the Academy of Management in Atlanta in August). The authors noted that much has been made of the fact that women overall earn less than men; however, this research revealed that even when women have substantial discretion over the amounts they charge, they still make less.

The result was so prominent that leaders are concerned that the average incomes of entire industries could decline as various professions attract more women, said study author William L. Cron, DBA, marketing professor and associate dean of graduate programs at Texas Christian University’s M.J. Neeley School of Business in Fort Worth, Texas, in a press release. This is important because recent U.S. Census statistics indicate that professional-service businesses account for approximately 11.4% of the U.S. economy.

“Our major finding is that the gender of professionals has a strong direct impact on their pricing decisions,” says Cron. “Certain characteristics of some clients may lead women business owners to give them a price break,” and women tend to be softer on prices in general in order to foster relationships. The upside is that while female proprietors may sacrifice some income in the short term, the customer loyalty they strive to develop may lead to greater income stability and profitability in the long run.

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About the Author

Joy Keller

Joy Keller IDEA Author/Presenter

Joy Keller is executive editor of IDEA Fitness Journal and IDEA Fit Business Success, and is also a certified personal trainer, indoor cycling instructor, yoga teacher (RYT 200) and Reiki Master. Joy joined IDEA Health & Fitness Association in 2002, and brought with her a wealth of information about how to fine-tune communication channels, after having spent her formative career years specializing in business-to-business journalism. Before she even graduated with honors from the respected University of Georgia journalism school, Joy was offered a job at one of the most successful trade publishing companies in the southeast, Shore Varrone, Inc. She made her mark in the automotive aftermarket industry as a creative thinker and journalist with an intuitive knack for researching and understanding niche audiences. Joy has worked on several titles, including Auto Trim & Restyling News, Truck Accessory News, Digital Output Magazine, Retail & Construction News, Miata magazine, Ford Racing, and many more. Her passion, however, lies with health and fitness. She was the associate editor of ACE Certified News while working at the American Council on Exercise, and transitioned that publication from a newsletter to a magazine. She has enjoyed 17 years at IDEA, where she has launched several publications, including the award-winning Inner IDEA Body-Mind Spirit Review, IDEA Pilates Today and IDEA Fit Business Success. Joy is a content creator and media 2.0 advocate who takes pride in discovering the unique information needs of qualified audiences, and she is dedicated to serving those needs while following the highest available standards.