What are my competitors charging? Should I go for lots of sales at a low price point or fewer clients at a higher price point?
What’s your strategy for pricing?
My strategy uses a combination of things. I decide how much an hour of my time is worth and create a minimum amount I need in order to say yes to a project. I also make sure I’m aware of all the expenses involved. And I check out what other people in my industry are doing. Then I decide the value the product or services will create for my customers (which is usually more than I’m willing to charge!).
Then I do a check-in with my heart. How does it feel?
If I can’t get myself fully aligned with a price point, it won’t work. If I’m resistant even a teeny tiny bit, it’s not going to work.
A few years ago I was brainstorming prices for a new program I was going to offer and my marketing coach didn’t agree with my price point. He said it was low. I was resistant to raising it. But I thought about it for a few days and realized that I was scared to charge more. I was thinking about all the people who come to me and say, “Jeanna, I really want to hire you, but I can’t afford it.”
Are those my ideal clients? No! So why was I setting my prices based on their comments? Old habit. If I chose to cater to them and kept my prices low, do you think they would buy? Probably not.
I adjusted the price higher, but only to a point that felt good and that I could still easily feel aligned with.
Your pricing needs to feel good and not be driven by fear of losing clients. It also needs to be high enough that you are not only covering your overhead but making enough so that you’re able to live comfortably. In addition, you want to make enough money to invest back into growing your business.
When I first began my business, my first client received four coaching sessions a month and she paid me a whopping fifty dollars.
I poured my heart and soul into the coaching and decided to charge my second client one hundred dollars a month. At the time, it felt good and I was happy to have clients with whom I could practice my new coaching skills.
But fast-forward a year down the road. One hundred dollars didn’t feel very good. I began raising my prices little by little until I charged $350 per month for one-on-one coaching. I felt great about this price. However, my practice was beginning to be rather crowded. I felt like I had too many clients, not enough time, and certainly not enough money for the number of hours I was putting in.
My mind wandered to a vision I had a few years before: Ten clients, each paying me $1,000 per month to have me on retainer. That felt wonderful. I raised my prices again and changed the structure of the coaching. I was happy, happy, happy with this model for over a decade!
I saw less-experienced coaches charging more than double what I was charging. I didn’t care. My model felt great. I even paid a coach with less experience than me to coach me at $1,800 a month. Even though the investment was a stretch at the time, I was getting great value and was committed to making it work.
Later, as I began to shift my business model again, I raised the prices on some services and lowered the prices on other services and products. The change was congruent with my overall strategy and felt great.
Anytime I’ve ever charged a price that felt like too little or too much, it was an indicator of impending doom. The product or service didn’t generate profit and I even lost money on some of them.
Being strategic about pricing is smart. How you feel will trump strategy in the end. Choose prices that more than cover your expenses, inspire you, and make you want to shout from the rooftops about how much value your product or service delivers!
How can you change your pricing and feel better too? Share below!