Finding the perfect price for your online services can feel like a you’re playing a guessing game.
Should you shoot for the moon with an expensive package and see if anyone bites? Should you aim for a lower, entry-price offer to gain traction? Or do something else?
If these are questions you’re asking yourself, it means you’ve been winging it… and that’s no way to run a successful business (in fact, it can totally backfire).
When your prices are set the right way, you confidently talk about your services, clients are thrilled to pay what you charge, and your bank account grows effortlessly.
So how do you price your services with confidence no matter what stage of business you’re in?
I have a simple pricing strategy that guarantees you’re charging the right price for every offer.
The awesome thing about this approach is that it provides a straightforward way to continually improve your business and sets you up to confidently raise your rates over time.
Whether you’re a newbie or old pro, if you follow this approach, you’ll nail it every time!
How to Price Your Services
When pricing your services, you must stop guessing and you must start evaluating.
To do that, you must price your services according to what I call your “lowest common denominator.” Here’s what I mean…
When you’re just starting out or have only been in business for a few years, there are four foundational skills that you’ll need to master in order to succeed online:
- Service skills
- Content quality and consistency
- Customer experience
- Marketing skills
To determine how much you should charge for your services, you must evaluate your level of expertise in each skill area, then price yourself according to the area in which you’re the weakest (your lowest common denominator, or LCD).Click to TweetNot sure how much to charge for your services? Jenny Shih shares her simple pricing strategy.
The Lowest Common Denominator for New Business Owners
If you want to make money, have satisfied clients who are thrilled to refer you, and a solid reputation in your industry, you must start by pricing your offers based on your lowest common denominator.
Pricing yourself according to your weakest skills may feel like a tough pill to swallow, but it helps you get more traction faster, and ultimately create the success you want.
Please, avoid the temptation to deviate from this even if it makes you nervous. And remember, you can and should raise your prices as you gain experience. (More on that in just a minute.)
Once you get that the LCD approach is the way to go, the next question becomes, how do you determine your lowest common denominator?
We’re going to walk through each foundational business skill, so you can see exactly how to master each and determine where you need to grow AND price accordingly for where you are right now.
If you’re a newly certified coach or a seasoned business owner who is pivoting to a new business model or offer, your service skills are your lowest common denominator.
This means you must start low and slowly increase your prices as you uplevel your expertise and prove that you can create stellar results for clients (or hit your next LCD).
Content quality and consistency
If you inconsistently blog or rarely communicate with your list, this could be your LCD.
Although list-building, blogging, and writing newsletters might not feel like the most sexy side of business, it’s vital to establishing your expertise. The pros you love provide valuable content regularly, and you must do the same if you want to establish yourself as an expert (and price yourself as one).
Ooooh, I love this one. Too many business owners completely ignore the customer experience, and it hurts their business. (Don’t be one of those people!)
A poor customer experience can be difficult to diagnose because, often, your clients don’t report their frustration.
Here are a few signs that customer service might be your lowest common denominator:
- You lack a process for tracking and onboarding new clients.
- Clients email you confused about what’s expected of them.
- Three-month packages stretch to four, five, or even six months because of poor scheduling.
- Your clients can’t keep track of the worksheets or guides that you create for them.
- You don’t have a system in place for gathering client testimonials.
It takes time and practice to iron out a solid customer experience, but upleveling your prices requires you nail this one. (Hint: It’s way easier to improve your customer experience when you work with clients one-on-one.)
Online marketing skills
If you’re new to running an online business, and even if you’re an experienced therapist or have a thriving offline business, your online marketing skills are likely your lowest common denominator.
If you don’t know how to speak to your clients’ language, confidently and consistently get the word out about your business online, or keep your website up to date and attractive to target clients, then this is definitely your LCD.Click to DownloadHow to Create the Perfect Bite-Sized Offer for Your Business
When to Raise Your Prices
Once you identify your LCD, price your services at an appropriate level.
But I know, you don’t want to stay there forever! That’s why the next step is to focus on upleveling that specific area of your business. Once you’ve done that (with great results), you can raise your rates.
Then you’ll run into a new LCD and focus there. Then… you guessed it, you can raise your rates and identify your newest LCD. And on and on.
This means that the most important thing to do is focus on improving your lowest common denominator, whatever that happens to be.
As you do, you’ll raise your prices to match (that’s your new lowest common denominator!) and continue doing that month after month, year after year.
Let Me Have It
Okay, let’s hear what you think.
Do you get stuck when it comes to pricing your services?
Does the thought of pricing yourself according to your lowest common denominator frustrate you?
Does it feel like a fair way to evaluate your rates?
Give it to me straight! Leave a comment below.