Previously, I shared my tried and true method for knowing if it’s time to raise you rates, which then raised these questions:
What do I charge now?
How do I tell my clients?
I’ve got answers for you, in my famous, gotcha-covered, step-by-step, Steal This! fashion.
Today you’re going to discover the perfect pricing for your services, and afterwards you’ll find out how to tell your clients you’re raising your rates (no, it doesn’t have to be agonizing!).
Before we dive into the how-to, let’s talk about a very important money-related topic: fear.
Fear and money
Thinking about what to charge is often a cause for stomach aches among business owners. They think fearful thoughts like:
I can’t out price my competition, or worse, the person who trained me!
My clients will leave me!
No one new will hire me!
Wondering how I can read your mind?
I’ve heard these fears over and over from my clients (and in my own head). It’s part of the rate-raising game. No matter who you are, fear is going to creep in when you’re upping your prices.
Just because it’s part of the game, doesn’t mean it needs to run the show.
My best tips for addressing fear?
1. Own your worth! Know that you create results for your clients, and know that those results are valuable. (As long as you really are creating great results, that is!)
2. Kick your fear-based thoughts to the curb. Giving these mental gremlins “air time” doesn’t help one bit! Focus on doing great work and forget the mental garbage.
As long as you’re not charging a million dollars for an hour of coaching right out of coach training, you’re probably needlessly worrying about charging too much. Most women I know charge too little… which leads right into today’s perfect pricing strategy and determining exactly what to charge.
My Personal Recommendation for YouGet clients even if you don’t have a big audience, an advertising budget, or a clever message!Finding your perfect price
There are as many pricing strategies as there are business coaches out there, and today I’m sharing the approach I’ve used for pricing in my own business and for my clients—because it works!
Step #1: Craft a results-oriented offer
As we discussed earlier: “People don’t buy coaching. They buy solutions.”
Getting caught in a charge-by-the-hour mentality is likely to cause a ton of pricing-related fear, because it’s so easy to compare your pricing with everyone else’s.
Instead, having a results-oriented offer will help you focus on charging for the results you provide, not the time it takes to provide those results.
When you have a results-oriented offer, it’s much easier to figure out your pricing.
Step #2: Consider your prospects’ perspective
Sit in your prospects’ shoes. From their perspective, frustrated about their ______ problem and ready for the solution you provide, ask yourself, “What is it worth to have this problem solved?”
Another way to ask this question is: “What pricing for this results-oriented offer feels reasonable?”
In both cases, answer with the first number that comes to your mind. Remember, you’re not comparing with what others charge; you’re searching for the number that feels resonant for your services!
Now you should have a starting number for your pricing.
Click to TweetThere are as many pricing strategies as there are business coaches out there, and today I’m sharing the approach I’ve used in my own business and taught my clients—because it works!Step #3: Consider providing massive value
For this step, we’re going to look at pricing from another perspective. Temporarily put Step 2’s numbers aside. We’ll come back to them in a moment.
For a client looking for a solution to their ______ problem with your results-oriented offer, what amount would they have to pay you to make you feel just a little bit nervous, like you’re charging a teeny tiny bit too much? Not a million dollars too much, just a little.
Think fast! This isn’t a comparisonitis thinking game. Pick a number!
Got one? Great!
Now, if someone were to pay you that much, what would you have to do to “up your game” to meet that dollar amount and feel like you’re giving them your very best work? How would you change what you do and how you do it to ensure phenomenal results?
If you’re following along and answering these questions, your brain is seeing myriad ways you can serve your clients even better than you originally planned. How cool is that?
This is exactly how I want you to start thinking about your services and your pricing. Provide phenomenal results and get paid phenomenally well to do so!
Step #4: Go to the edge of your reach but not beyond
You should now have two numbers: a reasonable one and an up-your-game one.
My advice to my clients: up your game. Pick the number that is just at the edge of your reach and makes you a tiny bit nervous.
When someone pays you that magic number, you’ll push yourself to provide life-changing results. And those kind of results make for very happy customers.
Other pricing considerations
Although my perfect pricing strategy works well overall, I want you to consider two other factors when determining your pricing. These are important!
If you’re brand new at what you do
If you’ve just launched your business and haven’t nabbed your first client, jumping straight to premium pricing could be a bad idea.
Why? Because what’s more valuable to you than cash is experience! Gaining experience serving customers is going to make you great at what you do—and that simply comes with serving more customers.
The problem is, many new service providers get the bad advice that “you have to have premium prices to be taken seriously.” And that’s just bogus nonsense!
Pricing yourself too high right from the beginning could slow the influx of new clients at a time when practicing your craft is key.
What you do need to start getting clients is an offer that solves a problem that you’re confident you can deliver, and language that speaks to your clients so they know that you can help them solve their problem.
If you have little to no experience, I encourage you to start with lower prices for small offers (what I like to call Bite-Size Offers)—something that will easily get people in the door to work with you. Your offers still need to be results-oriented, but the pricing doesn’t have to be off the charts.
By starting small, you can market your offers with integrity and confidence because you know you can deliver. And, you won’t need a ton of marketing skills to promote lower-priced offers.
Then, as you gain experience and confidence and a solid reputation, you can increase your prices accordingly.
My Personal Recommendation for YouThe only coaching program that gives you the structure, accountability, and support you need to succeedExperienced? Reach for ridiculous prices
If you’re a seasoned pro at what you do, it can pay to go far beyond what seems like a small up-your-game pricing strategy and into the land of seemingly ridiculous prices.
After I watched this pricing video from Derek Halpern of Social Triggers, it created huge ripple effect in my business.
To sum up the video, Derek quoted a study on pricing that said some people will always choose the least expensive option (no matter what it is); some will always choose the most expensive; most people choose the middle. He suggested we create tiered pricing with our offers to give people whatever it is they naturally choose.
At the time, I was only offering $1500 and $2000 coaching packages, but was in the process of raising my prices to $2000 and $3000. Based on Derek’s tip, I added a 6 month package for $6000. Within a month, I had someone asking for it.
At the time, the 6 month package felt ridiculous, simply because I was afraid no one would want it!! It turned out that I LOVED working with 6-month clients and eventually that was all I offered!
If you’re experienced in your industry, consider what the ridiculous option may be for your business and craft an offer accordingly. Have fun creating it and seeing how much value you can pack in. You’ll never know how it feels until you try it!
Should you post your prices?
Another common question that comes up about pricing is: Should I post my prices on my website?
There’s a lot of conflicting advice out there. Some experts say you should get prospects on the phone for a strategy session or discovery call.
I, however, am a fan of transparent pricing.
That’s because I myself prefer to know the price of something in advance.
Now it’s true, you can do a lot of really good selling on the phone and convince people to sign up for your high-priced programs than they might otherwise purchase.
But a lot of people prefer to know the price in advance and would rather not waste your time getting on a call with you if they truly cannot afford your offer.
By always posting your prices, when you get somebody on a call for a consult, you can have a deliberate sales conversation about a specific package at a given price that they already know. And then the call is just for figuring out if you’re a good fit to work together.
What about the idea that you become a commodity when you list your prices? I have pretty strong opinions about that in this video:
The one thing NOT to do
Although I’ve mapped out exactly how to price your services, I also want you to know how not to price. This may fly in the face of what you’ve heard before, so be prepared.
What not to do?
Don’t compare!
Ay-yay-yay! This is a guaranteed path to contracting comparisonitis which isn’t quick to cure!
I don’t ever recommend clients compare what they charge to the industry norms. You have a general feel for the prices others charge for similar services, and that’s fine. Doing an in-depth research of your competitors rates is not going to help you find your perfect pricing.
Instead, focus on the results you provide and the value you offer clients. Find your own resonant pricing and own it!
One of my past clients, I’ll call her Jane, was really great at her work. I mean, top-notch in her industry and the local market. We were talking about her prices (which were really low), and I suggested she increase them.
She fired back, “I can’t charge more than the woman who trained me!”
Oh, boy.
That is limited thinking, and it’s all too common. We all learn from teachers. Those teachers charge a certain amount of money. But as the saying goes, at some point the student becomes the master.
If you’ve become a master in your field, please don’t let someone else’s pricing cap your pricing. That’s ridiculous!
You are worthy of charging great prices for great work. In fact, you must do that if you want your business to thrive!
Click to TweetYou are worthy of charging great prices for great work. In fact, you must do that if you want your business to thrive!Your Turn!
As always, I want to hear from you.
Tell me…
Do you have a perfect pricing strategy you like to use?
Are you ready to charge what you’re worth in your business? If so, what is your next step? If not, why not?
I can’t wait to hear all you have to share in the comments below.
Your next step will be telling your clients you’re raising your rates. (It’s not as scary as you think.)
My Personal Recommendation for YouGet a steady stream of clients, even if you have 30 hours/week or less to work on your business
Great advice, Jenny! I love the idea of having different services at different price-points so people can choose the level they can afford. I feel like so many coaches forget that the people who need them most are often the beginners who rarely have the budget for a high level coach.
Yes, variety is good! And, working in whatever way you love is best 🙂 Sometimes that means having a variety and sometimes that means all high-end (or low-end) offers. When we work in the way that lights us up most, we make the world brighter.
Thanks for being here!
Hi Jenny,
I’m following all the great things you put out in the world after finding out about your work in Marie Forleo’s B-School. Now I’m going to do the Martha Beck Life Coach training in September, having worked through my avatar and digging into the work of B-School. Do most new coaches give free coaching or should I use your formula? At the moment I am unsure how to do this as I don’t fully understand how valuable the work I will do will be. Any thoughts on this would be really welcome. I hope I can make enough money from my coaching to work with you in the future for six months and hopefully even more. I know that Kendrick Shope said you really helped her make the biggest difference in the career and I really hope in the future I can work with you so you can help me achieve the difference I want to make. Many Thanks, Deborah
As a brand new coach, Deborah, you’re best to go with gaining experience over cash — it will serve you way better in the long run. When I took MB LCT, they encouraged us to find 10 people to coach for free for 3-6 sessions each. I did that and it was invaluable! So you’ll definitely want to start there because becoming a good coach takes practice!
Once you do that and get clearer on your niche and what you love about coaching, start with lower-priced offers. That will help you bring paying clients in the door — which can take some time to get comfortable with.
Then over time with increased experience and confidence, up those prices, baby, and charge for the impact you’re making. Because at that point, after you’ve had all that practice with free and paying clients, you will definitely be changing lives!
Good luck with the training! It’s such a great experience.
Thanks Jenny. This is just the help I needed. Deborah
Great tangible feedback! I’ve done loads of free coaching but all for 1 session. I just gave away my first 5 session package to thank the 100th member of my “Vision Board Virtual Party” group on Facebook.
Jenny, of the 10 that you coached for free how many hired you to continue? I know Kendrick did 100 pitch-free sessions snd that worked for her but has NOT worked for me….
Great advice, Jenny! Pricing is a great adventure, and a continuous experiment. Earlier this year, I decided to only work with 9 month clients, but once I raised my rates (again), found that I now had room to add a more affordable 6-month package. I still drastically limit the number of clients I work with so that I can give them total quality. This has made it possible for me to help my clients write their actual copy, sales pages, and even their autoresponder emails. People LOVE these services!
You’re right on: great adventure + continuous experiment. Totally, totally true!
I’m always intrigued and eventually bewildered by these pricing conversations. I do home organizing and interior decorating. I have not yet been able to create a “results-based” pricing structure instead of hourly. I never know how many meetings with contractors I’ll have to have or which client will always turn an hour long meeting into 4 hours. And when it comes to organizing (which I’m starting to phase out of the business) some client’s move very slowly through the decluttering process. I also can’t do it based on a percentage of the decorating project budget because often times, it takes me more time to find less expensive items. Should I just ignore this type of pricing advice? Maybe it doesn’t apply to what I do?
Christy – Great question! The interior decorating biz is definitely an interesting one. I had a client who is an interior decorator and I learned a ton from working with her (though we worked on setting up systems, not pricing).
I totally understand that you can’t always know the exact time it will take to complete a project, and when you’re dealing with contractors it gets all that more dicey.
Though I don’t have an exact solution for you, I certainly have several things for you to think about…
* Could you play a game for your next 3-5 new clients where you bill like you normally do but then also do an on-the-side best guess of your actual total time? You’d play the game on the side just for yourself to see how close you are. Then, multiply it by 1.25. At the end of the project, see how close you were.
* How could you build in more structure to your pricing so that your client has some idea of the cost range (eg, set design fee), yet also allow for some variations that are client-dependent (eg, the fabric they choose for the couch)? Remember, you’ll want to overcompensate so you don’t get jipped.
* Another way would be to say the set fee for a half-day of decluttering is $x, and then every hour thereafter is $y/hr. So they then have some control over the process. Or, say, we’re going to spend x hours on decluttering and that will be $z; how quickly we move is up to you…
Your approach will depend on your target clientele and the price range you’re operating in, but hopefully these give you a starting point!
Great advice Jenny thank you! I think I must obsess over this stuff because I do already employ some of the above mentioned suggestions! 😀 It helps to hear it again though and to approach it in a structured way so I learn something from it that may be helpful to apply to how I communicate with new clients. For example, I never though to multiple by 1.25 when I’m guesstimating my time. I usually give a range, but nearly always underestimate! Your feedback helped a lot, thank you! And thanks for the great content as always!
A really great post, which has left me really pondering my prices. I know that I want to increase them, because the more I think about them, the cheaper I seem (and not in a good way!!). How do I tell my current clients though, when it comes to increasing my prices – do I just say ‘ your next consultation will be … – or is there a better way of doing it?
many thanks for such a good read!
Great question, Clarie! And I’ll cover in next week — I have another Steal This! post planned with an email template to make it easy to tell your clients you’re upping your rates. I’ve got you covered, so stay tuned!
Great advice. I’m sharing this.
I’ve read so much about rates and pricing for freelancers and service providers and read a bunch of the experts but I still end up confused. I’ve undercharged and feared overcharging. I finally have rates I’m comfortable with but now have one company that wants to work with me so much that they keeps coming back to me with the same lower offer based on budget. Most recently they offered to reduce the scope so I do less work under their budget. My answer was that I thought he’d be doing his company a disservice by reducing the scope.
All that to say that this article helps.
Hi Jenny,
I’d love to hear your views on my pricing conundrum!
I’m in the process of pitching for my first contracts as a marketing consultant. I have a very solid track record of results in my roles and have held pretty senior positions.
What would you advise on premium pricing vs starting cheaply?
I put one premium quote (with a business outcomes focused approach) forward to an established company who came back with an administrators hourly rate!
On other clients I would be looking to charge a project based fee. I like your idea of the 1.25 as I also underestimate on time!
I wouldn’t necessarily look at those as black-or-white options. Instead, what would you need to charge to feel great about working for them and not feeling taken advantage of? Pick a number that feels solid in your bones and stretch it if that feels good to you.
Thanks Jenny – very helpful!
Jenny, such a stellar post on what feels like a difficult topic sometimes. I finally feel like I’m charging what I’m worth and can’t wait to re-evaluate in a few months.
My questions: Should I list my packages and prices on my website or do I risk turning too many people off? I don’t list them currently.
And if I don’t list them, how do I present the different package options so that it feels natural and not the like the home shopping network?
Thanks!
Sara
That question draws such strong opinions, Sara! I list my package and my pricing because that feels good to me. Other coaches say that you shouldn’t list them so you can get people on the phone and connect with them personally before telling them the price. I see merits to both.
I generally like to know what it costs to work with someone before I consult with them, but I also admit to hiring several coaches without knowing prices ahead of time.
You can never go wrong with doing what feels good to you! But, if you don’t list your prices, make sure you’re comfortable at selling packages on the phone because a little more work will be required in that arena. Being comfortable with sales strategy will help you not feel like HSN in the process 🙂 I recommend Kendrick Shope for that — she’s phenomenal!
Whatever you decide will totally be okay!
This is the ONE thing holding me back from launching my event planning/styling business. Pricing myself!! It’s such a painful topic. There are so many ways I could charge. I could do by the hour and include goods, etc. I could charge by the hour and then just bill for goods with a mark-up. I could create packages that are all inclusive.
I’m leaning toward hourly and billing for goods. I think it would be the best way since I am a beginner. I have a lot of events in my portfolio, but have never really gotten paid to do them. I want to launch in January, and I want a strong start, not a wimpy one.
Have you helped event planners or event stylists price themselves? I’d love any advice!
Such a great question Kim!! If pricing is THE thing holding you back from launching, I have a hunch that it could be a fear-based delay tactic. No fear — I do this all the time to myself without even realizing it!! Our minds are so crafty and come up with all these ways to hold us back from doing the scary thing we want to do; in your case this is making your business official by telling people they can pay you!!
In my experience with event planners, there are a few different ways they go. My personal preference is to hire someone “by the job,” meaning they set a full fee for the event and it’s paid with a deposit up front, some payment in the middle after some work is done, and then at the end when everything is complete.
Pick what number feels a little scary but not too scary and try it out. As I tell my clients all the time, “Clarity comes from taking action.” After delivering for your first few clients, you’ll get a way better idea of what to charge based on the work you do and what their expectations are. Don’t worry too much about the number because overthinking it means you don’t get to do the work you’re excited to do.
Thoughts?
I don’t have a great pricing strategy, being such an analytical thinker I like to quantitate what I do and that’s not always an easy task.
I’d love to charge what I’m worth, however I’m not quite sure what that is yet. While my business isn’t new, my client list feels like I am.
Thank you for sharing this awesome post. I live in the land of comparison. It is a horrible cycle to get caught in. As a virtual assistant, the service prices can range from $2-$150 an hour. I have learned to know my worth and value and charge it, but it is so hard when there is no “average” price the industry charges for the services I provide. You have confirmed that I am unique. I provide value. No need to look at what others are doing. And own it. I am so glad I found you.
Dee Dee, this other post might help you with your rate increase. It’s a new one and some of my clients have found it to be a game changer for seeing their value, articulating it, and in the end, upping their rates. You’ll find it here: https://jennyshih.com/2016/04/how-to-double-your-rates-with-integrity/
Checking it out now. Thanks again. I’m all about the game changer.
Terrifically helpful post. Thanks so much. For some reason, I had enormous difficulty coming up a pricing model that takes into account that I am a certified coach AND have more than 20 years of experience as an executive and problem solver. I’m not a newbie just starting out and my prices should reflect my true value.
Your information and the link to Derek Halpern’s video switched on the light bulb and I truly appreciate it!
You’re not alone, Jen! There’s so much noise out there about what you “should do” or “shouldn’t do” about pricing that it can mess with your ability to choose any price!
I’m thrilled to hear this cleared things up for you!
Hi Jenny
This is such a helpful post. Thank you. I’m getting ready to launch my new weight loss coaching business. I spent years as a business consultant so I have lots of client coaching experience but not in this area. I now have a nutrition qualification and have also had three case studies trial my 8-week program. So, my question is do I go out with a bite sized offer of £99 as you have recommended in other posts or do I stick to my program which has three different price points (starting from £267, £687, £997) depending on which option you choose? Thank you so much for any steer. I’m going around in circles wondering whether I just do a bite sized offer or just go for it! Cheers Jenny x
Great questions, Siobhan!
The truth is, I’m a huge fan of people starting with BSOs because it makes it a no-brainer for clients to “try them out” without much risk. Over and over for my Make It Work Online clients, I’ve seen this to be a huge kickstart to my clients’ businesses. That said, some people are still resistant to it!
Here are some additional blog posts + a video on BSOs to help you see what might be the next best step for you business.
Pricing based on the “lowest common denominator: https://jennyshih.com/2016/11/price-services-confidence-whether-youre-new-business-awhile/
More in-depth on a BSO: https://jennyshih.com/2016/11/thing-need-bring-steady-flow-new-clients-consistent-income-month-month/
An oldie but goodie video on BSOs: https://www.facebook.com/jennyshihpage/videos/953576294729852/
Take a read and a watch and see what you think!
Congrats on your new business and best of luck with your first step out into the world as a weight loss coach!