How confident are you with your pricing?
Do you feel it’s right or are you as cheap as chips?
(But Chips are good 😊)
Chips are good, but the thing is they are meant to be cheap. Your service isn’t.
It’s incredibly easy to fall into a trap of turning your valuable service into a cheap commodity and that hurts!
The traps of being too cheap are:
- You tend to attract clients who like cheap and don’t value all the effort you have to put in.
- You tend to have to work long hours to bring in enough money
- You tend to have confidence issues with putting your prices up.
Have I just described you?
We’ve all been there. Pricing is an evolution and not a one stop journey.
But I charge the same as my competitors…
…so I can’t put my prices up because I’ll lose clients.
I’m pretty confident you’ve just compared yourself to competitors who are just like you ie also pricing themselves like a bag of chips.
But I know there are companies out there charging more than you do for exactly the same thing.
So the market says people will pay more.
What you are actually saying is “I’m not confident enough to put my prices up” and that’s a whole different ball game to “they won’t pay more”.
Pricing comes from within
I personally feel that your pricing is a reflection of your confidence.
- Confidence in the value you deliver.
- Confidence in knowing your worth.
- Confidence in knowing you’re not the cheapest and that’s OK.
And you know what…people like confidence. People buy confidence.
A few months ago I was lucky enough to attend a big conference where Grant Cardone was speaking as I was sat right in the front row.
Grant is a bit Marmite but he did talk great sense.
He told a story about pricing which beautifully explains my point…..
They had a product that was on the market for $1,000 and some people were moaning it was too expensive so he decided to give them something to moan about and put the price up to $10,000 😊
He sold more at $10,000 than $1,000!
Most of my life I only thought of how to get by & then later, how to hold on to the little bit I had accumulated. This held me back from real possibilities. . . If you want to get to the other side, you cannot afford to flat line. In an operating room a flat line means death. The same holds true in business. . . . This concept applies to all areas of your life, your company, your job, your marriage, your friendships, and your goals. . . . Don't flat line, you need to look for the spikes and the spurts of growth to ensure you and your business will live to see another day. . . . #success #business #survival #flatline #expand #money #income #selfish
Why, people interpret the price tag as the value the product will deliver for them so if it costs more than it must therefore deliver better value.
Sales were going great so he decided to put it up again.
This time to $20,000. So 20x more expensive than it was originally.
And, yep, he sold more units at $20,000 than he did at $10,000.
When you factor in the admin/logistics around each purchase he had reduced the effort required to make his money too.
It’s bonkers right, but pricing gold dust.
This demonstrates that your pricing is just a number that you can chose and that changing it can have a majorly positive effect on your bank balance.
Here’s the thing…
Let’s say you double your price, would you care if you had half the clients?
No, because you would be earning the same and working half the time. Nice!
What if you maintained your hours and volume of clients but earned twice as much for it.
Now that’s very nice!!
Let’s just imagine how that would feel and what you could do with the extra money.
Achieving that is worth a tiny bit of work, right.
So here’s what to do…
- Write down all the benefits of working with you. Make them as quantifiable as possible. Why should someone want your service? What’s the outcome of using your service? What’s the value they receive for their hard earned cash?
- Look at how many hours you currently work for your money.
- Based on point 1 how much is it reasonable to charge for the value you deliver? (The answer needs to be more than it is now 😊).
- Take your answer to point 3) and check you will get a decent fee per hour of work.
- You now have your new price. All new clients need to get pitched at that new rate. It’s up to you what you do with your existing ones.
If you have any which are doing your head in then I suggest you give them a 3 month warning of your fees going up (as long as your contract allows you to do that) and then put them up. If they moan they can leave. Meantime you’re recruiting new clients at a much better rate.
I know I make it look easy, but it actually is.
The only bit that is tricky is the bit that happens in your head. You need to believe you are worth more than you currently charge.
Like I said at the beginning, pricing is an evolution. Take that 1st step and nudge it up a bit. Get comfortable with that and then nudge it up again.
Stay focused on what that extra money and/or less hours would mean to you and use that to drive your behaviour.