What’s the hardest decision you’ll ever have to make?
Churchill said that naming a kitten was the hardest job in the world.
My online entrepreneur friends tell me it’s buying a domain name.
Real-world business experience tells me the most stressful decision you’ll ever have to make is knowing what to charge.
Pricing Can Be As Complex As You Make It
You may need / want to consider:
- The competition
- Your own skill set
- What you perceive to be your skills
- What your market will pay
- Your location
- And a host of other variables.
Working out what to charge can feel like looking for a needle in the proverbial haystack, at times.
In fact, the needle may seem easier to find than knowing how much to charge for 3 sessions that enable your prospect to quit smoking, get fitter and live the life of their dreams.
There are some strategies you can use
One popular method is to use an online calculator.
These will quite quickly tell you what you need to be charging to reach your income goals, and they’re a great place to start.
But what about all those other questions?
Creating a solid pricing structure requires you to do a little more digging. So with your starting number in line, you’ll want to take a look at:
This might take a little detective work, since a lot of service providers don’t publish rates. But if you pay attention to their websites and social media, ask a few discreet questions, and get on their mailing list, you can work it out.
If you have a physical product, you’ll find Google is your friend and you can quickly see what your competition charges.
Be realistic about who, exactly, your competition is.
Don’t undervalue or over-sell yourself. In other words, make sure you’re comparing yourself to another provider who shares the same skills, market, and track record, rather than simply looking at who you strive to become.
In some fields, this is easy. There are certifications and educational programmes that allow you—by virtue of having achieved them—to charge a certain rate.
If you’ve followed this path, then pricing may be easy for you.
… If not, take a solid look at what you can legitimately claim as a skill.
Your track record
Have you proven yourself by helping former clients (and have the testimonials and case studies to show for it)?
Have your former clients moved on to bigger and better coaches after working with you? (It’s a great thing to be a “launcher”)
These are all reasons to maybe consider a higher price range than you might have first thought.
In the game of setting rates, it’s your market that has the final say.
As any first year economy student can tell you, the price of anything lies where what the buyer is willing to pay meets what the seller is willing to accept.
If your goal is to give newbies a helping hand and lead them down the path to success, unfortunately, you’ll be looking at low paying gigs.
This is not a bad thing—everyone has to begin somewhere—but it does need to be acknowledged.
If, on the other hand, your target market is more established and economically stable, a higher fee may not be warranted.
… In fact, it’s a must.
Prospects will expect a higher price, and will not find value in the lowest-cost provider, whether it’s coffee beans or business coaching.
Remember, it’s your business – You get to call the shots
Pricing is never set in stone. It’s flexible.
If you find you’re attracting the wrong market (or no market at all) you can always change your rates.
Working too hard for not enough profit? Raise your rates.
Working with the wrong kind of client? Change where you market your business. And, remember, all of this starts with determining your rates. If you can’t nail your pricing, you won’t have a profitable business.