Pricing is something many in the coaching industry struggle with, and it’s often a subject that leads to a lot of undue worry and stress for new and experienced coaches alike. Common pricing issues include not charging enough and knowing how to position yourself in your chosen niche.
It’s such a big subject and one I recently had the pleasure of speaking with Ruth Ferreira about. Ruth is a Business Growth coach and founder of Success Club, and she’s passionate about empowering small business owners to take their business to the next level and accelerate their success.
So if you currently have pricing issues in your business or are wondering how to get out there and charge more for your services, this blog post will really help!
In Ruth’s experience, one of the most common things business owners struggle with is not charging enough. There are a couple of reasons why this happens. For many, it’s because they don’t realise what they’re worth. They may not realise their own costs and aren’t factoring them in. And for some people, a massive thing can be the confidence to charge what they’re worth. Attracting the wrong type of client can then become their main problem. And for others, there’s a real fear about putting their prices up, as they might lose clients.
Pricing has to be one of the biggest challenges business owners face. It's vital you get your pricing right because it relates to how you position yourself and your business. And it can make a fundamental difference in the types of customers you're attracting and your long term success in business.
So when you're thinking about what you're going to charge, you need to consider your target markets and what they might be looking for. You can then price accordingly. But don’t look at your competitors' pricing and aim to undercut them. This is a surefire race to the bottom. Margins will get smaller and smaller until you’re not making any profit, and your business will fold. But also, someone else is always willing to undercut you too.
You’ll also find it makes a massive difference to the type of client you’re attracting. If you price too low, you’ll attract penny-pinching clients who are a pain to work with. The relationship with them won’t be great, and you’ll dread working with them as they’ll take all of your time for very little money.
From a pricing point of view, it’s better to bring in those higher-paying clients from the outset. But how can you do that?
Be seen as the go-to person within your niche. This is essential to help you easily convert more clients at a higher price point. So if you want to do this, it’s all about sharing value, showcasing your knowledge and expertise and becoming known as the person within your niche. Become the obvious choice, so your potential clients don’t want to go to anyone else.
This is where a lot of businesses fall down. They don't realise that people are buying based on value rather than price. So if you consider how you can pack your offer as full of value as possible but at minimal inconvenience to yourself, it can be a real win for everyone. Some people will still want the best price, but they’re likely to be up there with the pain in the backside clients, who pay very little but take up a lot of your time. So by positioning yourself above them, you're automatically saving yourself that burden of even working with them. When you charge a lot, they automatically assume you must be top of your game.
And the critical thing is to ensure the value of your offer matches the client's expectations for that price point. The value is about the results - If you’re charging high value, you need to be very clear about the value and the results you get for your clients. That’s the way to have a happy customer.
It’s something many people don't do, but testing and monitoring responses to different prices will help you find that sweet spot. So add value, showcase your brilliance, but then constantly tweak to find that sweet spot for where your pricing should be.
So as an example, you may work with fifty customers over the year. That could mean pricing ten at one price, then the next ten at a little more. While you're playing around with pricing, you're looking for the price point that gives you the highest customer lifetime value. This is the price that generates the most sales and, most importantly, the most profit over the months, possibly years, even decades that you work with that client. So make sure you are tracking that response at different price points and the customer lifetime value.
Understanding them is such a powerful process because a lot of the time, if you increase your prices by 10%, your profit can rise significantly. This is because that 10% increase is pure profit for most businesses. So for some businesses, depending on how your pricing is structured, a 10% increase in price could be a 50% or more increase in profit.
The critical thing is your business needs to make more profit; It doesn't matter what your turnover is if your profit is minimal. So always strive to increase your profit because even if you put your prices up and lose some customers, you might be making more profit, even if you're making less actual sales. So it's always really powerful to know your numbers and track and just see what works the best.
Also, understand which things you offer make money and which are just not worth you doing. You can decide to do those things that aren’t profitable, as it might be part of an experiment to grow something that you want to do further down the line. But you need to know what those numbers are to make those conscious decisions.
Look to position and pitch yourself as a premium product or service, and you’ll attract a much higher quality customer. When you position yourself as a commodity and compete on price, it doesn't work very well for you as a business. Be aware of what this looks like in your specific market and check that there is a market for premium products before you do the numbers.
Often you can charge a lot more but work with fewer clients and make considerably more profits while still massively reducing your working hours - and this is an appealing option for many business owners.
So look to position yourself at that higher price point, and get your website looking good. Premium brands have premium websites, proper email addresses and phone numbers, and they often use automation or a VA to help everything run smoothly. They also have high quality, confident brand products and services, and they can showcase their differences. This includes a strong, unique selling proposition (USP) that sets them apart from anyone who might be considered competition, amazing branding photos, logos and brochures.
Often, premium brands will have limited options for how people can work with them. So for any high-end brands, you want to have maybe 2-4 amazing options and focus on them. If clients want to work with you, they fit within those options. And if you're looking to give prospective clients a taste of what you offer and want to start to build trust at a low price point, you can have some nice incentive products and free or low-cost products that allow people to get to know you.
Always price yourself high, but give a discount and explain why. Explain to people that you’re just starting and are therefore offering a 50% discount to your first three clients, and once it's gone, it's gone. This helps get people asking because they need to act now if they want that 50% discount. It also helps validate you as a business owner, as it helps to get your first clients through the door, get results and give you testimonials.
Pricing issues can affect many in the coaching industry, but don’t let that hold you back from charging premium prices. Just make sure you package your products full of value for your ideal clients. Because as long as that offer is perceived as fantastic value and they can see the value they’re getting, they can justify the purchase and have a good reason to go for it.
You can then go out there, look to put your prices up bit by bit and try a different price point if it doesn’t work. Because you don’t need to keep your pricing the same, you can change it as many times as you like. Because often, a price increase will help you bring on more of your ideal clients, it’ll be a lot easier to attract them, and they’ll help spread the word about the fantastic service you provide - making it a win-win for you and your clients.
If you’d like to learn more about working with Ruth, head over to her website at https://www.successcoaching.biz/, where you’ll also be able to sign up for her newsletter and receive free business growth strategies. You can also find Ruth on LinkedIn and Instagram.