You love what you do so much you’d probably do it for free… but this IS a business after all and yes, you want to be of service but you also want to make decent money doing it. AND on top of all this, you keep getting mixed messages about how much you ‘should’ charge and suddenly it starts to feel like you’ve entered a pricing minefield.
No wonder you feel confused and conflicted!
Yes, when it comes to it, setting and naming our prices is an issue like no other for new (and not so new!) business owners.
I know that for most of us, setting prices dredges up a lot of ‘STUFF’ (technical term!) and is more often than not a reflection of what’s going on in our HEAD rather than anything to do with the magnificent service or product we offer!
Many of us start off by setting our prices too low and in doing so position ourselves at the shallow end of the pool – and whether we’re aware of it or not, we do this because we have perceptions about those at the ‘deep end’ being more experienced…. accomplished … brighter…ambitious etc.
The comparison trap
Pricing by comparison simply leads you into that distinctly uncomfortable ‘better/worse than’ territory and you end up pricing from a place of fear, insecurity and doubt. And believe me, any potential clients will be able to sense this a mile off!
Before we talk about the ‘right’ price for your services or products, I just want to discuss WHY this is such a key piece of the business puzzle.
Pricing isn’t just about the money
Pricing isn’t just about applying a formula (X hours x £X per hour – costs = my price!) It’s about something far more subjective – it’s about perceptions, emotions and feelings.
There’s much more at stake with pricing than how much money you earn. Pricing influences how people SEE you, how your clients FEEL and how YOU feel about your work.
Pricing influences how people see you
Not everyone will suddenly think you’re the best thing since sliced bread just because you slap a big price tag on your work but price DOES play a part in how people judge the quality of your work.
When you think of it, we ALL make assumptions based on price every single day as soon as we walk through a shop door. Some of us will buy the highest-priced item because we assume it’ll be the best and what we really care about is getting the job done right. Some of us will go for the middle-priced item, because we assume it will at least be better quality than the bargain item, even if we can’t afford the highest-price one. And some of us will settle for the bargain with little or no expectations.
Pricing influences how your clients feel
It is well-documented that customer satisfaction is directly influenced by price perceptions – the prices we set (AND how we present them to our clients) has a direct link with how they feel about our offering. In simple terms, clients use price as a reference for perceived quality.
So if you under-price your work thinking you’ll attract more people, you might actually be missing out on clients because of assumptions they’ve made about quality, reliability or your professional experience. The thing is, if YOU under-value your work, others are more likely to as well.
Pricing influences how YOU feel
The negative effects of being underpaid are well-recognised – we eventually feel undervalued and become frustrated, discontent and cynical and that is NOT what we want or deserve from our business.
Your work is not just something you do for yourself, it’s something you do so you can serve others with your full enthusiasm and attention. If you feel a sense of resentment, how on earth are you going to muster the enthusiasm to offer your clients the service they want and deserve?
Pricing influences your sustainability
Walking through your pricing process is a critical part of running a sustainable business and that means asking yourself some fundamental ‘number questions’, such as
- How much DO I need to earn each month?
- What do I really WANT out of this?
- What are my fixed expenses?
- What does each product or service actually COST me? (Not just to deliver but to prepare as well.)
- How much time does it take overall?
Questions such as these not only make you AWARE of your time, they also help you to VALUE your time. And when you value your time you’re a lot more willing to say no to clients that aren’t a good fit.
You see, saying no to those people means you’re better positioned to accept clients who ARE a good fit, which leads to better outcomes and happier clients, which leads to better testimonials and more referrals…. and so on.
All of which brings us back to the question in hand:
What IS the RIGHT price for YOUR service or product?
YOUR ‘right price’ goes beyond a numerical amount – there is a resonance to the price. It just FEELS right. Intuitively.
I speak as someone who’s tried many different pricing models and strategies but my favourite by a mile – and the one which really suits me and many of my clients – is ‘resonant pricing’.
Here’s something to help
Resonant pricing is a concept I learned from Mark Silver of Heart of Business. It’s about tuning into your intuitive sense of the ‘right’ price rather than trying to match other people’s rates or setting your fees from a place of angst and anxiety.
Mark has a really great little exercise for getting to YOUR right price – whatever it is. I use this exercise for my products and programmes and it’s saved me days of agonising. He offers a simple pdf download for you – so I invite you to give it a try and bring a sense of ease to your experience of price setting.
And one last point…
There will always be people who DON’T like your prices, and that’s TOTALLY okay because your ‘right price’ is right for YOUR right people, not EVERYONE. And those who don’t resonate with you at this point are someone else’s right people…. you only need to work on finding YOUR resonant pricing and just leave everyone else to find theirs.
Over to you…
Got a pricing insight to share? Comment below and remember, you’re never alone with your fears or challenges.
And if you try the resonant pricing exercise, come back here to let us know how you got on.