The Real Reason Why Pricing Your Services Is So Hard - And What To Do InsteadJun 09, 2021
Don’t know how to price your services? You’re not alone.
Pricing? It’s a bugger isn’t it? Too high and you’ll lose the gig, too low and you’ll be kicking yourself...
Or, so most people think!
But this is actually NOT how it works.
Think about this: Does the high price on Rolls Royce cars make them less appealing? Or limit their sales?
How about if Apple had launched their iMac at a price to compete with Asus…. Would we still consider them as premium?
Do you know someone doing the same thing as you and charging more?
Truthbomb: Price isn’t the reason why they didn’t buy
The first thing you need to know is, it’s not your price that’s stopped your prospect from signing up.
It’s usually the first place we lay the blame (and often the easy answer prospects give as they run out the door), but it’s rarely the real reason.
If that’s happened to you, please – don’t drop your prices because this doesn't solve the problem!
A race to the bottom isn’t a strategy that ends in success for your business - have you considered that price is an important part of your marketing strategy?
That helps you WIN the right clients and repel the ones you don’t really want?
If you’re lowering your prices to win clients it’s like cutting off your leg to lose weight!
All you’re doing is devaluing your skills in the eyes of the market; and trust me, you don’t want to be ‘cheap’, you want to be ‘invaluable’.
How to think 'differently' about pricing
With a product, there’s a relatively simple sum done around the cost to produce, operate and so forth.
But for a service-based business, putting a price on your time, expertise and knowledge is totally subjective, and can feel nearly impossible when that old foe ‘imposter syndrome’ is doing its worst.
Ever felt like, ‘I can’t POSSIBLY quote that!’? Yep, me too.
But failing to charge your worth is incredibly common, particularly if you’re a service provider, and – in my experience – it’s even more likely if you’re a woman. It’s tough to overcome your pricing roadblocks, but it can be done!
Too often we do a mental sum of ‘how long will this take me and what do I think their price tolerance is?’ or ‘what did I charge the last guy?’
In reality, your customer doesn’t care one bit about how much time you’re going to spend on their work (although if you knocked it out in 15 minutes, maybe best keep that to yourself) – they only care about the outcomes you’re going to deliver.
And therein lies the crux of the matter – it’s all about value, not about time and not about $$$.
What should I charge for my services?
In my Business JAM program we go deep into designing your service structures and adopting pricing strategies that will help you hit your revenue goals, within the time you’re able to devote to your business.
And I heavily caution against setting your pricing based on what else you see in the market; before you know it, you’ll find yourself scrambling for the scraps at the bottom of the client barrel.
The net result of that is falling profit margins, uninspiring projects and dwindling job satisfaction. And let’s face it, you might survive on love or money alone, but preferably not without either!!
Having watched so many of my clients accidentally devaluing their skills, I know that pricing has to be a core part of your marketing strategy.
That’s why I devote time to helping you price for position and value, and show you how to avoid competing on cost.
And a huge part of that is about tapping into psychology-based decision making, to allow you to leverage your earning potential and scale without spending more hours in your business.
The bottom line? You need to make your ideal client fall wildly in love with the picture you paint of your future together. Life made easy, problems solved, the right people taking notice, the money rolling in.
How do I know if I’m pricing too low?
If clients are quibbling on costs, aren’t inspiring you with their projects or aren’t terribly aligned with your values, you’re probably attracting bottom-feeders.
Here’s the thing, services that have a higher price tend to have a higher perceived value. But if they didn’t buy, it’s because they’re not connecting the value in your offer with their needs, not because they can’t afford the price.
Ever tried to sell something pretty decent on Marketplace for a crazily low price and not got so much as a nibble? Try upping the price and see what happens!
As humans, we’re wired to believe that cheap = inferior and a high price means high quality. Sometimes that’s borne out by the reality, but often (as perhaps is happening in your case), ‘cheap’ only comes from fear of rejection.
By the same token, you can’t just slap a few zeros on your quote and wait for the work to roll in – you have to be able to compellingly demonstrate the value you provide.
That doesn’t mean detailing the nuts and bolts of your service, but instead painting a picture of the solutions you provide to your customers’ problems - the aspirational (but achievable!) outcomes for them and their business.
As Harvard Business School professor Theodore Levitt said, “People don’t want to buy a quarter-inch drill, they want to buy a quarter-inch hole!” Your job is to sell the outcome of your service. What they really want!
Establish what the promise is that you’re actually making - the outcome, transformation or changed reality that your customer needs.
Ready to charge your worth?
Start with the end in mind - who do you really want to attract? Once you know that, and can align your service and pricing to match, you'll see a sharp shift in your sales.
Like my client Melissa who went from nervously charging $3k to winning clients at $15k for the same strategic, work. She more than 5x'd her revenue, and didn’t increase overheads, from just the work we did to align her pricing and pitch her offer to suit her ideal customer.
Like help to get clear on your best pricing strategy?
If you’re ready to price with confidence, have a profitable, enjoyable business and be paid what you’re really worth, get on the waitlist for Business JAM – my online program designed for business owners who want to consistently book the best high-paying clients and never have to rely on referrals again.
I’ll show you how to develop profit-driven services and pitch them to win the right clients... and so much more, empowering you to build the business (and the bank balance) you deserve!