Last week we had a little reality check about your annual income goal. Perhaps you had a breakthrough about what might be missing when you answer the question “How much income do you want to make in your business?”
If you missed it, you can check it out here.
This week, I promised to cover my approach to pricing your services. Overall, I can tell you that there is a lot of fear, doubt, and overwhelm out there around pricing your programs. Quite honestly, we often make it way harder than it is or needs to be. A tremendous amount of energy is expended in “getting it right”, and sometimes, not knowing what to price something at even becomes the “excuse” for not launching, which is a huge shame.
Here’s what I know to be true about pricing….
- There is no “right answer” – No magic formula, no one size fits all model, no “have tos”. You get to decide what’s right for you.
- There is no “too high” or “too low” – Your coach, your friends, even your potential and current clients may tell you their opinion, but the truth is, the only one who has to believe you are at the right price is YOU!
- You aren’t making a life decision – Isn’t that one of the reasons we are entrepreneurs? You can always add more value or change your prices (up or down) when it’s right for you…and you don’t have to ask for anyone’s permission.
- It gets to support your vision – Here’s the biggest mistake entrepreneurs make! They set their pricing separate from the context of their vision. For you to build the life you want, you get to price your programs so that you can achieve your income goals to support the lifestyle you desire.
There are four basic approaches to pricing that I teach.
- Market based pricing – This one is for INFORMATION ONLY! Yes, you get to know what’s out there in your niche, and the range of prices you see can be valuable as you make your decision. But never forget that there is only one YOU, and no one else will deliver the transformation you create with your clients in the same way you do, so there is really no way to compare prices apples to apples. Use it as information only to support your final decision.
- Value based pricing – Again, this one provides context for how you price. Quite honestly, I’m guessing that if you actually charged someone the equivalent of the value you actually create, you’d be adding some zero’s to the end of your current pricing.
- Desire based pricing – Here is your sweet spot and where I suggest you really focus your efforts. This method STARTS with you getting clear on your vision for your life and your business and the income your business will need to create to support that lifestyle. If you aren’t clear on this, check out my Vision Crafting tool here and start there. In next week’s blog, I’ll cover this approach in more detail!
- Gut Check pricing – At the end of the day, no approach to pricing makes any difference if the “answer” is something you can’t say out loud. Let’s say that you know in your heart that the work you do is more than worth $997 a month. Yet every time you get with a potential client, you freeze right when it’s time to ask them to buy. You get tongue-tied, you stutter, or perhaps you just totally choke and say nothing at all. Either you come off as so nervous that you don’t inspire the confidence in you needed for someone to say “Yes” or you don’t even ask. Either way, no new client.
What is the better alternative? Keep beating your head against the wall “trying” to charge $997 or starting off with a lower, still stretch price that you can confidently ask for, and gaining positive momentum? I say the latter. With many of the new entrepreneurs I work with, we develop a specific strategy to ramp up to their desired pricing.
So if $997 is the desired monthly pricing, perhaps their first two clients come in at $497, a steal for them, and a great confidence and momentum boost for the new business owner. Once these two clients are “on the books” and confidence is up, the price goes up to $797 a month and all new prospects get this offer until the next two new clients are on board. At that point, things are rolling, the expert is standing in his/her power, and $997 is the new price point (and maybe not the new target J).
This tiered approach works. And it’s a whole lot better than spending months struggling to get a “yes” and get some cash flowing. Money attracts money, and that first “yes” from a client is the start of good things to come!
So here’s your “home play” for the next week.
- Get clear on your vision for your life and business, and what income you need to support that lifestyle, if you aren’t already. Check out my Vision Crafting tool here if you need support on this.
- Consider pricing approaches #1 and #2 above. Do some research into your competition and see what they are offering. Try to find someone offering a higher priced package than you can ever imagine charging right now. Think about the value you create with your programs. What is the potential “return on investment” that your clients could realize?
- Watch for next week’s blog to learn more about desire based pricing and get ready to change the way you think about pricing forever!
See you next week!
