I write about price a lot.  This is because my clients are largely in service-based businesses or expertise-based businesses, meaning the widely accepted “labor + materials + profit = price” scenario just doesn’t fit, leaving far too many asking, “What should I charge?” without a solid answer.

Try this one on for size:  Charge whatever you can say with a straight face. 

A little simplistic, yes… but since we’re rewriting and fully updating this year-old post on price, I figured I’d start with some eye-opening truths about price:

Pricing is Critical in your business because your prices speak on your behalf.

Are you the cheap version?  (The Yugo?)  The luxury/boutique option?  (The Mercedes?)  Or somewhere in between?  Your pricing speaks of your value, your experience, your accessibility and calls out to and/or repels different markets.   If you’re the cheap option, luxury, C-suite clients are going to assume you are “not for them.”  If you’re the most expensive option, those just starting out or younger demographics will assume you’re “not for them.” Pricing indicates “positioning” within your industry.

So, what IS the RIGHT way to price?

I’m going to spare you the tired formula of cost plus time plus profit B.S.  You’ve heard it countless times before and — frankly — anything widely accepted by MOST business owners should be VERY suspect.  (Since MOST business owners ultimately close their doors in shame, defeat, debt and sometimes even worse.)

First, what do you WANT to get paid?

You might as well start there because your market is a whole lot less PRICE SENSITIVE than you think.  Do you need some evidence here… but you’re  sick of people pointing to Starbucks as an example of us waiting in lines to pay 4X what anyone else dares to charge for a  cup of coffee? After all,  no offense, but YOU — dear friend — are no Starbucks.  And neither am I.  Plus, we all know we go to Starbucks for the buzz, the environment, the baristas.

You’re right though, that price analogy is — while still relevant — over-used and boring.  So, I have another one for you.

What about KEURIG? lol… I mean, buying those little K-cups cost us about 50 cents a cup of coffee.. MADE BY US, in our own kitchens, served in cups we have to wash ourselves. No barista. No tiny tables.  No friends to meet.   What are we paying per pound for that coffee? I haven’t done the math, but I’d venture to say that we pay MORE per pound of coffee via K-cups than we pay for cable.  Seriously.

But MOST of us still use these K-cups.  Why?  Because PRICE is elastic… and we are willing to pay for matters of convenience.  Want additional examples of price elasticity?  Awesome.  I’m chock full of them.  =)  Mercedes vs Yugo.  Neiman Marcus vs. Walmart. Salon color vs. box. Bottom-line: Your market and mine ARE willing to pay premium prices for something.

But it is up to you to tell them WHY they should pay premium prices to work with you.

Blaming a lack of sales on pricing OR a “cheap market”  is lazy and uncreative.  Don’t do it to yourself.  And don’t buy this excuse from your sales people.  Maybe YOUR market actually DOES buy on price and price alone.  If so, who chose that market? You did.  This means you can (and should) choose another market.

BUT, research shows us that only about 8 – 20% of the market actually buys on price ALONE.  Most of the time, when people are buying — based largely or exclusively —  on price, it’s because the salesperson or business owner hasn’t given a lot of thought to positioning, comparison, and or the sales conversation.

It’s important to give a lot of thought to that sales conversation.  What will lead UP to the conversation? When will you bring up price? How will you present price? How will you address objections?

Uncomfortable Truth: Lazy sales people/business owners see MASSIVE price resistance. Savvy sales people see a WHOLE LOT LESS. Want more help? Download this below:

GET MORE ON MY BEST PRICING STRATEGIES RIGHT HERE: 

Why Charge Higher Fees?  Hint: It’s Not About You.

We already mentioned that one reason you should charge higher fees is because they speak VALUE.  But, also because when you charge higher fees, a different “breed” of client shows up.  When I first opened my coaching practice, I charged $167 / month for FOUR coaching sessions.   My clients would answer their phone having “forgotten” about our call.  They’d be on a coaching call with me while simultaneously “window shopping” with friends… or making lunch for their kids.

Fast forward to fees that require a 4-figure monthly investment and NOW my clients show up prepared, focused, and ready to kick a$$!    Higher fees don’t just buy you a new pair of Jimmy Choos.  They buy your client’s full commitment.   The attorney who charges top dollar doesn’t typically attract a weepy, wishy washy client.  The self-pay concierge physician doesn’t  attract someone eating McDonald’s every day and living as a couch potato.  As a result, clients paying higher fees GET BETTER RESULTS because they are fully committed!

GET MORE ON MY BEST PRICING STRATEGIES RIGHT HERE: 

But, How Can I Raise My Fees?

Many people who read this will be timid about raising their fees… thinking their business is different and that — while they WANT to make more money, and believe they DESERVE to make more money — they could never charge “that.”  That’s okay.  I don’t need you to call all of your clients and tell them you’re tripling your fees. Instead, I’d like to humbly BEG you to test this theory with absolutely NO RISK to your current income.

Create a “premium offer.”  Something at a much higher price point than what you’re currently offering.  Load it with value.  And then offer it to your existing client/prospect base.  A certain portion of buyers will ALWAYS buy a premium offer.  Allow this little price experiment to give you the confidence to repackage and reprice your current offers.

After all, you can’t afford to be the CHEAPEST of your competitors.  And there’s  ZERO value to being “second cheapest.” So you may as well up those prices for more profit. TEST higher prices and then email me to tell me I was right. lol…

But, it’s not ALWAYS about HIGHER Fees.

I recently opened up membership in my INSANELY AWESOME business development association: Women Who WOW.    This membership for me is about REACH… impacting 100,000 women business owners who are DEAD SERIOUS about crushing statistics, driving profit and building a business and income they’re SO proud of.  The fees are LOW…. so the barrier to entry is LOW.

Consider having a MIX of pricing in your business.  HIGHER FEES for your premium, one-on-one work that helps you deeply impact a few people.  LOWER fees for your group work that allows you to impact an ever-increasing number of people.

So, what’s next?

You can download my BEST pricing strategies by clicking below… and also post something in the comments below about YOUR business… so we can get to know each other here.

GET MORE ON MY BEST PRICING STRATEGIES RIGHT HERE: