Are you a coach, content creator, consultant, freelancer, or service-based business owner? Then this topic may interest you: pricing.
We all have different reactions about prices due to our class level, spending budgets, and earnings.
People will pay nearly anything to get something they really want. Just look at the fashion industry. Where is the “value”? It is all in the perception of what something is worth. There is a market for everyone.
So the secret is to find your niche who really needs your services. Then price will never be an issue. If someone says they want it but doesn't buy, the two reasons are:
-It wasn't that valuable to them after all
-They are afraid to invest in themselves
Either way, a ‘no' is good because you will realize they were not the right customer, and it can help you further define your messaging to scare away people who don't fit the profile.
In this episode, I'll talk about various price levels (2,3,4, and 5 figures) and what value one can expect for each level. Thanks for watching, and please consider subscribing to my podcast for more valuable tips about Money, Marketing, and Mindset.
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“When I finally X, I will do Y.” Have you ever said this to yourself? This simple formula is stuck in many people’s minds. It is often tied to money. “When I get promoted, I will buy a house.” or “When I pay off my debt, I will quit my consulting gig.”
This is actually not a strategy at all! In fact, often the thing you need that you are putting off is exactly what you need now. Later is not a valid option since a million and one things could happen in-between to prevent you from reaching those desired milestones. Murphy’s Law. Why risk it? I have a better solution: make more money.
Take a close look at your income. Are you charging the right rates? When was the last time you raised them? Are you maximizing your revenue sources? If you don’t already have multiple revenue streams, check out this video. Do you have a bulletproof and detailed business plan with quarterly goals? This is top priority if you want to get out of a vicious cycle of being broke, struggling to sustain your desired income, or being able to quit a toxic job.
You should charge based on the value you provide.
— Krista Mollion, Business Coach
“Expensive” or “Affordable” are made-up terms. This is opinion, not fact, since pricing is entirely in the eye of the beholder. There is a market for any given product at all price points. The luxury industry has proven to us that when people feel scarcity and exclusivity, they are more likely to try to obtain it, even at a very high cost.
In the services industry, where I specialize, it is no different. People want a transformation, something that will take away their problems and get the results.
Value of Price = Proven Results
The more convincing you are that you can solve their problem and the more they want that problem solved, the more they will want to hire you at nearly any cost.
Here are a few things you can do now to increase your rates, make more money, and build a thriving business:
1/ Build a Seductive Brand
People will hire the person who presents themselves the best. Period. There may be another firm who is even more qualified, affordable, honest, or dependable, but the services company with the best brand wins. It isn’t fair but games rarely are. You must play by certain rules and today’s market demands good branding. How is your brand doing? Take this brand audit to find out.
2/ Show Social Proof
Do you have testimonials, impressive PR, and a large following online? Have you published a book? Have you been a keynote speaker on your topic? You can up your rates accordingly. Invest in these areas and you will see your value increase.
3/ Heal Your Insecurities
Money is a loaded subject. People carry a lot of emotional baggage with them around it. How did your parents handle money? Did you receive a good education about money management as a child? In your family, was there more of an abundance or scarcity mentality? Did the people around you trade time for money or invest to create compound wealth? All of these factors contribute to how you will price your services today. Here are a few tips to develop a money mindset.
4/ Get the Right People’s Attention
Know Thy Audience! You must be very clear on your target audience down to the smallest details since this will directly affect your income. If you niche down and focus on one demographic, your chances increase to become known by them, and they will buy from you. Often, a ‘no’ means you aren’t speaking to your niche. When you niche down, you know their salary so you can do the math and know for sure what they can afford. In case you need it, here is a free customer avatar worksheet.
5/ Focus on Relatability
People buy from those they can relate to. When someone discovers you, you want them to instantly connect with what you are saying, start nodding their heads, and immediately want to subscribe to your channel and maybe even binge consume your content. One of my hacks for you to become more relatable is to conduct polls and use real customer pain points to create content. People who feel understood will want to work with you more than to question your prices. I regularly ask my audience questions so that I can produce more content they relate to.
6/ Publish Expert Content
To be a services brand means you are an expert in one clearly defined niche. In order to charge good rates, you’ll want to prove you know what you are talking about. Whether it is a video, podcast, blog, book, or live stream, people will be looking at your content to see if you regularly give away great tips. Authorities in any given topic will make more money than those who don’t. Worried about giving too much away? Watch these videos about free vs. paid content and working for free.
7/ Show Your Passion
One of the best sales tools is YOU. If your audience sees just how passionate you are about your topic, they are twice as likely to hire you. Energy is contagious, and people will pay a lot for the right motivation that brings them renewed joy in their lives. Just look at Tony Robbins; people save for years to attend one of his live events. Money is not the first issue if you get people fired up by your charisma.
8/ Charge With Your Ambition Figured In
Some people are very minimalist and just want to live a simple life. Others are extravagant and want to build as much wealth as possible. Along those same lines, ambitious people are willing to put in countless hours and do whatever it takes to succeed. People with less ambition are fine doing work they enjoy, but they don’t want to put in too much effort and time because they value their time off most AND don’t care much about money. There is no right nor wrong answer but you must decide this upfront to determine which path you will take.Your ambition may drive you to ask for higher rates, but you will be expected to work very hard for it. One last note is that if you have a life partner, you should discuss this openly with them too since this difference can kill a relationship if the two aren’t on the same page.
9/ Do Not Compare Business Income to Salary
When you charge money for your services, you must take into account much, much more than when you are an employee of someone else. From your rate, you must pay your own bookkeeper, tax accountant, insurances, hardware, software, employees, and marketing costs, just to name a few. It takes a lot to operate a business. Do a full analysis of your business operating expenses and factor in budgets for growth, THEN set your rates.
10/ Do Not Charge by Hour!
Another big mistake some service providers make is to stay within an hourly billable rate. It is much smarter to bill by packaging your services. You can decide what is included in each package, with the more of your time, the higher the rates. The packages should typically have a time frame attached to them, like 6 months or 20 sessions, and an expiration date.
11/ Design Your Personalized Revenue Model
Each person will be different. Some love working 1:1 with clients, but your time is limited how many individuals you can serve so most service businesses quickly try to scale to groups or develop some type of passive income. I teach my clients to develop multiple revenue streams. You can use this revenue calculation sheet to figure out how much of any type of service you will need to sell to meet your monthly income targets.
12/ Talk to Successful Coaches
Why be afraid of the competition? Hire a business coach and ask them to help you price your services. Join a group filled with other coaches. Seek out a mentor in your industry who has done well for themselves. Do your research for coaches serving your audience (location and type of service) to compare what they charge. Adjust based on your expertise level and seniority, or don’t. In the end, it is an individual decision but usually, most people undercharge, so let a knowledgeable coach tell you if your pricing seems too low.
13/ Separate Philanthropy from Your Usual Company Services
Some companies undercharge specifically because they want to work on a certain good cause. This is very noble of you! But it must be done under certain conditions, or else, you are jeopardizing your business:
- Only accept lower-paying or pro bono jobs AFTER you have a stable 6-figure income. You need to put on your oxygen mask first. Make sure your business is thriving and you’ve given all your energy towards it BEFORE you accept any work that is not going to generate profit.
- When you take on a pro-bono, make it an outright donation. Ask the recipient to give you their non-profit information so you can deduct it from your taxes.
14/ Attract The Perfect Clients Based on Your Rates
If your prices are too low, you will attract flaky types. They will waste your time, constantly bother you, try to squeeze in more services without paying, ask a million questions, also try to ask for discounts, and probably will never buy another thing from you down the road. Get rid of them quickly by raising your rates!
If your prices are too high, however, you will find yourself out of your league, dealing with clients whose expectations you can’t meet, no matter how hard you try. They will be disappointed and will eventually leave you to search for someone who can keep up.
The perfect client is one who loves your services, doesn’t question your pricing at all, and is fully on-board with your brand. They often become long-term clients and advocates for your brand, maybe even affiliates.
Pricing should be set carefully and with a lot of research, thoughtful decisions, and the right support. After all, this is such an important factor of your business success.
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