Your prospects’ ability to pay is a vexed question. You need to make a living and so set your prices at a realistic level. Your prospects may not be able to afford them.
Here are two perspectives to consider. Yours as a business owner and your prospects who may also be business owners.
Generally Coaches Charge Too Little
Many coaches and consultants charge too little. Sometimes this is because coaches structure their business on sessions and there is a limit to the amount you can charge for an hour’s coaching.
The alternative is to sell the benefits of your coaching. This means you charge according to the value of your offer to your prospects. Success depends on how you market your offer.
Most websites take up a lot of space describing features and relatively little demonstrating their benefits.
So, how much should I charge?
First, do not associate your prices with the time you spend working for the client. Your client has no way of knowing how much time you put into your business. The idea contact time is what they pay for is absurd. Think about the time you spend preparing for meetings and following them up. In addition, there is the time you spend building your skills and your business.
Benefits transform the way you think about your business. I know people who have increased their prices, decreased the time they work for their clients and as a result increased their sales. Why? Because overall they improved their offer.
If you can decrease the time per client and increase the quality of your service, you can increase the number of clients you serve. But maybe you don’t need to if a few clients on higher prices is all you need to break even. A lot depends on marketing an irresistible, well-targeted offer.
When should you increase your prices?
As often as you like. Some people increase their prices once a month or quarter. Usually by a small percentage. This means they are confident their offer is similar to the previous month’s but over time income per client grows significantly.
You can increase your prices if you are getting a lot of prospects. Your focus is on those who can afford your prices. Others who can’t, will look elsewhere. Fewer clients at higher prices means you have time for other activities.
Another possibility is increase both the quality of your offer and your prices. One possible objection to high prices is false modesty. You undervalue your own business when your prices are artificially low. You’ve worked hard to develop a valuable offer and yet fear to ask a realistic price that represents the work you’ve put into it.
What Kind of Investment Will This Represent?
Higher prices increase the numbers of prospects who cannot afford your offer. Or so you think! More prospects have ability to pay than you think. There are three possibilities:
- Affluent prospects can afford your prices. They may think they have a bargain. Don’t even think about telling them they haven’t. You are offering them a benefit they want and they are willing to pay for it.
- Some prospects walk away because they genuinely cannot afford your offer. You may make a referral to someone cheaper, a simple and helpful move. Or perhaps you can develop a low-end offer that does not deliver the same benefits but satisfies those who cannot afford the full service. Low-end packages are opportunities for wealthier people to try your services too. Once people have purchased from you, they are likely to do so again.
- There are people who think they cannot afford your offer but really can! They may not be used to paying consultants’ fees and baulk when they first hear it. Your task is to help these people decide this is right for them. You need to be confident in your own mind they will find genuine benefit from your offer. Your fees may be a significant investment in their business or their lives and so you need to honour the sacrifice they make for their business.
Sometimes prospects need time to decide. Put a time limit to this period. You need to know when an offer you have made has expired. This allows you to move on.
Sometimes people say “No for now” and may approach you again at a later date when they have explored other options.
The Thing to Remember
The key is your marketing and the attractiveness of your offer. When someone turns down your offer, it is not always they can’t afford it. It could be the problem is in your presentation of your offer. Prospects have been known to claim the price is too high and then go with a coach with even higher charges. The key is how well you sell and not so much your charges!
Let me know if the topic of this post has been helpful. If you would like me to expand on this topic in any way, I’ll be happy to have a go!