How to Set the Right Price for your Services
I know from the clients I work with that pricing is one of the key things that keeps many heart-centred business owners stuck and prevents them getting out there and enrolling new clients.
It is so common for me to be asked: “What should I be charging?” or “What is the “right price” for my service/programme?”.
Well, here’s the gnarly thing about pricing – it isn’t an exact science. There actually is no such thing as a “right price”. Instead you have to find the price that is the sweet spot for both you and the clients you want to work with.
So here is my advice to get you started figuring out that ideal “sweet spot” price for yourself and your clients:
1. Don’t price yourself as a commodity
What I mean by this is you should avoid charging in such a way that people decide whether to work with you based on price alone. Petrol is a good example of this. Petrol is petrol. I know where I can get it cheapest locally and close to my parents’ home in North Wales (a long drive away from me in London!). So I make sure I fill up in those two locations. That’s because petrol is simply a commodity to me and I’m shopping on price alone. I don’t really care about anything else (unless I’m tearing down the M40 and I realise the “nearly empty” light is flashing – then I suddenly don’t care about price at all, I just pull in at the closest services!).
In the same way the last thing you want is people saying:
“Oh, the accountant down the road charges £100 per month less so I’ll go to them”
“£80 per hour for reiki? You must be kidding me, I know where I can get that for £25“.
You position yourself as a commodity when you:
a) Price your services by the hour or session
b) Focus on selling your “tool” rather than the actual “value” that you provide (your tool is the “thing” that you do – that might be coaching, accounting services, reiki healing or hypnotherapy. Your value is the difference you make).
This is why learning how to package your services into a programme or product designed to deliver results is so important.
Because when you price yourself as a commodity you simply can’t win. You will have to get ever and ever cheaper to compete. It is so much better to become a “class of your own” so that people want to buy from you alone and shopping around doesn’t even come into it.
(And before you ask, yes, some people will always shop on price, but it’s important you understand that these are not likely to be your ideal clients – the ones that you will grow a thriving business serving.)
2. Your price must be right for your Ideal Client
The world is full of a huge range of people all with unique life and financial circumstances. So whatever your pricing is, it must be at a level where the value exchange makes sense for your ideal client or target market.
Want to charge “high-ticket” fees of £10,000-£50,000 per client? Great! If your client is a business owner with a consistent turnover, or a stressed out achiever, flying high on the corporate ladder but miserable and unfulfilled, or anyone else for whom that level of investment makes sense in relation to their financial position and what they want to achieve.
But what if you feel deeply called to help single mothers get off benefits and change the lives of the next generation by turning their own lives around? Well, you can hardly charge them £10,000 – they just couldn’t afford your fees, no matter how much you worked on your sales conversations.
I know I bang on about it all the time, but this is why knowing your ideal client is so important.
Because your pricing needs to be at the level that is affordable and makes sense for the client group that you serve (and in fact ideally it will be a bit of a stretch for them).
As a personal example, a few years ago I started working with a mentor who helped me to really understand the value of my work and I designed (and started to sell) programmes priced at £5,000 £10,000 and £25,000.
But what I came to realise is that I have a deep emotional connection to a particular “ideal client”. And my ideal client is normally in the very early stages of her business and struggling to get it off the ground so £10,000 or £25,000 didn’t make sense for her. Yes, I knew that I was “worth” it, and that in the long term she would see the results, but it was a level of investment she would find so difficult to stretch to, that by pricing myself at that level, I was cutting myself off from a lot of the people with whom I do my best work.
As a result of deepening my understanding of my ideal client, my prices actually reduced. This feels comfortable and congruent to me as I know I’m reaching the people who I know I can bring the most magic and make the biggest difference to.
3. Your price must be right for YOU and your lifestyle
Want to work 3 days a week and have a 6 figure business? Your pricing may need to be very different than if you want to work 5 days a week to replace your old salary of £30,000.
But your business model also comes into it because if you are selling “one to many” you can still make a lot of money selling at relatively low prices.
So for example my online programme Get More Clients Saying Yes! is an absolute sweet spot for my ideal client. It’s affordable and makes sense as an investment – a client only needs to get one new client of her own as a result of buying the course and it’s paid for itself. But it also works for me and my lifestyle because I have 60-80 people joining it at one time, and it also acts as a stepping stone into my higher priced offerings or my membership – so it works for me too.
But if I wanted to bring in the same revenue and I only wanted to work 121 with clients, then I would need to charge each of those clients a higher fee – for example, I might choose to work with just 10 clients per year but charge them £15,000 each.
So, to go back to the earlier example, if you feel a deep calling to help single mums on benefits get back into work, but you also have a lifestyle that requires your business to turn over upwards of £100,000, then it’s just not going to add up.
And of course, sometimes we set our pricing strategically. In my first year of business, my pricing was much lower than it is now across all of my programmes. But I didn’t mind. I set my pricing at that time to “get going” rather than to make money – what mattered more to me was building my confidence, seeing my clients get results and gathering testimonials and case studies. The price increase came naturally as my confidence and sense of value grew.
There are two pieces connected to value here:
1. Your Belief in your Value
You must believe that your work is worth the fees that you charge. Honestly, if you don’t – if you’ve set some inflated price just because your business coach has said you should, but you don’t truly “feel” your value at that level then when you sell you won’t feel congruent, and you won’t feel comfortable – because selling something you don’t actually believe in is simply not in integrity whichever way you cut it.
I very much like to tell my clients that I’m not the “price police”. In fact, for a business owner who is struggling to get any clients at all telling her to put her prices up (and scare her witless in the process) is not the answer in the majority of cases.
Zero clients at £3,000 isn’t actually any more money in than zero clients at £600 – it’s still no clients!
So I normally encourage clients to just get out there and start selling their services. I’m often heard saying to clients “I’m not attached to what you actually charge at this stage – what I care about is that you get out there and learn how to attract and enrol paying clients”.
Because what I know (even if they don’t yet) is that as soon as they start working with a handful of clients and get good at enrolling them, their confidence is going to skyrocket and it won’t even need to be me who says “you know, I’m worried you are not charging enough”. I won’t need to, they come to their own conclusion:
“Oh, I’m really good at this, look at the impact I’m having. Boy, I’m not charging enough, I’m putting my prices up!”
Of course, getting really connected with your value definitely helps you set higher prices right out of the gate – so I also like to take my clients through processes designed to help with that to make sure they are not starting out so low it’s not serving them or their clients.
2. How you Communicate that Value
There is nothing more frustrating than knowing without a shadow of a doubt that you have amazing skills and talents, that the work you do is truly transformational and that you can change people’s lives – whether that’s by helping them with their health, their business, their relationships, their finances or their emotions – yet you find yourself repeatedly unable to communicate that to others so that they can see the value too.
This is why in my Get More Clients Saying Yes! course I put such a huge value on getting to know your ideal client – inside out and back to front – in fact, so well you could almost be him or her – and then learning how to communicate your value in a way that resonates with them so deeply they are practically saying “where have you been all my life?” or “Where do I go to sign up?”
5. Your Price isn’t a fixed thing (but you must stick to it!)
So don’t get too hung up on finding that elusive “right price”. Know that whatever price you decide to set now, you can change it later. In fact you can change it any time you like (the price police don’t actually exist!). So, as soon as you get that niggle in your gut that says “Wow, I can’t believe she got all that transformation and I only charged her £500” you can increase them right then.
But what’s important is that you are not changing that price moment by moment on a whim or according to your level of confidence – or, worst of all, according to what you think the client can afford to pay. (I could write another whole blog on why you should never do this!).
So get clear on your pricing, get it straight in your own mind and then stick solidly with that price until the moment you know it’s time to increase it, and then stick with that new price.
It’s not straightforward – for anyone
Finally, please don’t beat yourself up if you find the whole pricing issue a bit gnarly and confusing because you are definitely not alone – getting clear on your prices is just as hard for everyone, myself included. (I once got into such a confuddle about the price of one of my programmes I later sent out an apology email to the people who had bought it!). This is made more difficult by the fact that there IS no right price for the services we offer. For most of you reading this I bet if you had a good search around you could find someone offering what you do for around £50 per hour, and someone who has packaged up exactly what you do and identified a market willing and able to pay for it and is charging multiple 10’s of thousands. (Not convinced? do some research – you’ll be surprised….).
This is why setting your price based on a combination of your ideal client, your own income needs and a large dollop of intuition is the way to go. And know that there is no “right price”, just the one that is right for you, your business and your clients. And since there are no price police, it also means you can increase your prices as you grow into them.
Ready to get clear on your pricing and value?
If you would like to learn more about how to get clear on your pricing, get in touch with the value of your services and learn how to communicate that value effectively, I teach you how in my Get More Clients Saying Yes! course – which will be opening for enrolment later this year. If you’d like to be among the first to know when that happens click here to be notified
Get started today for Free:
You can also get started today by learning how to guide a potential client through a carefully structured sales conversation that will bring them to a natural and easy “Yes” without any “icky” closing techniques with my 7 Steps to Yes! video training.
It’s a series of bite-sized videos (just 3 minutes each) that will give you a complete step-by-step structure for your sales conversations – and it’s completely FREE. Sign up here.