There are loads of pricing myths out there in the online world. From pricing low when starting out right through to only being able to price per hour, these myths only serve to keep you stuck at a money ceiling of your own making.
So let’s bust 5 of the most popular pricing myths coaches and consultants, in particular, come up against.
Prices change all the time, and it’s never a just once done kind of thing. After my recent podcast chat with Osmaan Sharif, I started putting my prices up after every 5 clients. When it comes down to it, pricing really is just trial and error.
The only way you know if something is the right price is a) if it earns enough for you, and b) whether somebody’s prepared to pay for it! If it’s perceived to be too expensive or not provide enough value, people won’t buy it.
You must think about where your products and services fit in your process and how you might want to make changes to help you get more sales. I recommend you review your prices every 6 months and also check that you’re making enough money from each client.
Pricing per hour is so typical for new consultants and coaches etc. But as I talk about a lot, pricing by the hour actually punishes efficiency.
There’s a ceiling to what you can earn if you trade time for money. You can only charge for the number of hours you have available and the client for hours used.
If you package up your services and have fixed pricing, it will serve you so much better. It’s such an important topic; that’s why I’ve created an entire masterclass on creating and pricing packages. Because when you opt for a fixed package price, it doesn’t matter how it gets done or how long it then takes. They’re paying you for your expertise.
Many people go into business to help others, and there’s a belief that you can’t do that if your prices are high. But why shouldn’t you get paid to help people? You have to make a living out of your business, and you can help and be expensive!
If your prices are high, you can pay taxes and then allocate a certain amount of days, sessions etc., to pro bono or discounted work. But if you do this, be conscious of sticking to your allocation and charge your other clients enough so you can afford to do this.
Also, have a system to pick those clients, such as a charity, a referral system from a GP. It takes the onus away from you, so there’s no ethical dilemma, and you don’t need to know their financial situation. Just be careful you’re not putting your money story on them and making assumptions about their suitability, financial status, etc.
I don’t believe you should be cheaper unless you’re going into a new area of business for you. You have a wealth of knowledge and experience gained in previous jobs that can still be useful in your new business.
If you set your prices too low, this can put potential clients off. They’re looking for quality results, and your cheap pricing may give them the impression they’ll get substandard results.
Pricing too low can also mean you find yourself overdelivering if you’re not careful too.
There’s nothing to stop you from doubling your prices overnight! You could half your clients and still earn the same amount. So ask yourself, what would happen if you put your prices up by 50-100%?
Fears around increasing prices are often about your money limits and how you feel about your business, rather than the actual prices.
Think about how you can keep on putting your prices up. How you can feel valued and not resent the time you spend with particular clients. Look at the clients you have and think about whether you think they value you for the money they pay. If they don’t, do you need to get rid of them or put your prices up? It helps to have someone in the background, ready to take their spot if they decide you’re too expensive for them now.
And finally, try not to have any one client that’s worth 20% or more of your business, as it makes you too reliant on them. You may lose them through no fault of your own, find their work too much for you, or no longer want to work with them. It then makes it challenging to remedy if you’re too reliant on that income.
Listen more to my podcast on pricing low when you’re new.
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The Pricing Queen podcast is produced by Decibelle Creative