Do You Undervalue Your Business?
Whilst it is possible to overcharge for your services, most coaches and consultants undercharge. When your prices are too low, you undervalue your business. This is the fifth post in my series about money and pricing your business.
Undercharging is a real problem for your business and the wider business community. You make a statement about the value of your work. You may be brilliant at what you do but your message to the world is “meh”!
Perhaps worse is the possibility you undercut your competitors. Perhaps you have too many clients because you have a good reputation and low prices. Then the chances are you are running yourself ragged and collaborating with others to keep their prices down.
I said competitors, didn’t I? Leaving aside some of these may be potential collaborators, the chances are they have a niche next to yours and distinct. They may seem to be competitors but if there are enough clients to go round, what’s the problem? Of course, if you undercharge and they do, sharing clients is harder because you all need more clients. If everyone increased their fees they would all need fewer clients and offer them a better service.
How to Increase Your Prices
You should charge what you think you are worth. Indeed, charge more than that! It is not difficult to increase prices. Just do it! However, here are a few things to consider :
- Your reputation – remember higher prices enhance credibility but you will need to reassure prospects using testimonials or other evidence to show you deliver what you promise,
- Your marketing skills; it is not always easy to sell something at a high price and so you may need to learn to sell at a lower price and increase prices later,
- Your packages – it is worth having more than one package so you can offer a choice, at one to one meetings. Your packages’ quality is important and you need to offer something not only credible but irresistible.
So, let’s consider strategies to raise your prices:
- Build your reputation and your offer and raise your prices as your confidence in your offers increases
- Allow others to decide your credibility, if you get more enquiries than you can manage, now is the time to raise your prices. As credibility increases, so should your prices.
- Introduce a new low price offer, at a low price for the first cohort of purchasers. Promise to increase the price at a certain time and do it.
- Some businesses raise their prices by a low percentage every (say) quarter. The increase itself is small but over time becomes high. People who do this claim it is easier to do a lot of small increases than one huge one. Neither they nor their clients seem to think it a big deal. Perhaps it works.
- With several packages, you have lower and higher priced options. All your packages can increase price at the same time. Sometimes, a low-end package with a low price is an opportunity for clients to try you out. They’ll buy into your high-end packages when they have tried you. But don’t assume everyone travels that route. If you are credible, people who want quick results won’t mess about.
How to Manage Overcharging
Don’t bring your charges down! Perhaps you find it hard to sell at your current prices. Reducing the price devalues your offer, so what to do? Here are a few possibilities to consider. You may need to find a strategy that fits your business, don’t assume it’s the same for everyone.
- First, do you know your offer is credible? Review your offer; is it irresistible? I’m assuming you can delivery on your promises. Perhaps you are not clear about your benefits? Work hard to get them clear. Also, check over branding and especially personal branding. How do you come across?
- Which leads to the next question, how do you manage marketing and sales? Do you get out and find one to ones and if so, are you good at closing the deal?
- Keep your highest prices steady and design lower priced offers. You can upsell from a lower priced sale. But perhaps most customers prefer something lower priced. Make sure there is a real difference between your low and high-end offer. The low-end offers should be good value but clearly different from the high-end. They should involve less time for you.
- Consider a relaunch of your high-end offer. It’s always easy to improve an offer, so do it and consider a sales funnel or product launch.
- If you have a good reason, offer a discount to your clients. Tell them the full price and then find a good reason to discount if the price is a barrier.
Remember, this is always to some degree trial and error. As you get to know your market and offer, you become more adept at delivering something of value for what it is worth.
How do you keep your offers fresh, available to all pockets with realistic prices? Tell me if this post is helpful. If you have any questions about prices I would be delighted to have a go!