Last week I shared my tried and true method for knowing if it’s time to raise you rates, which may have left you with 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 next week I’ll tell you 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 stomachaches 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.
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 a few months ago: “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.
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 killer, life-changing results. And killer 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? 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.
Pricing yourself too high right from the beginning could slow the influx of new clients at a time when practicing your craft is key.
For my clients who have little to no experience, I encourage them to start with lower prices, something that will easily people in the door to work with them. The offers still need to be results-oriented, but the pricing doesn’t have to be off the charts.
Then, as they gain experience and confidence and a solid reputation, they can increase their prices accordingly.
Experienced? 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 a mind-blowing 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 turns out that I LOVE working with 6 month clients and now that’s all I offer!
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!
The one thing NOT to do
Although I 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?
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!”
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!
As always, I want to hear from you.
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.
And next week, we’ll dive into how to tell your clients you’re raising your rates. (It’s not as scary as you think.)