I love pricing for value. In other words, the value I provide you is so much greater than the value of the money you have to shell out to get it.
Pricing for value works because it leaves both parties feeling richer. I sell my service and receive the money I want. You receive my service and receive the information/ideas/action items you want. The “pain” it causes me to deliver the service is much less than the money I receive. The “pain” it causes you to pay the invoice is much less than the information you receive.
We both receive what’s valuable to us. And we’re both extremely happy people at the end of it all. And we’re likely to do business again.
But value is only half the equation. When pricing, you also have to consider how to get results.
A fresh life coach sets her rates at $50 per hour. That’s more than she’s ever made in her life per hour so she feels pretty good about it. She also knows that she can deliver loads of value for that $50. And, she’ll be $50 richer every time she sees a client.
That all sounds good, right?
But, “You’d be a fool not to buy this at this price” pricing can work against you. If your product or service requires some work from your clients or customers – and really, who’s doesn’t? – your pricing might be enabling complacency & inaction.
So that life coach might get some clients at that rate. But do those clients feel invested – both literally & figuratively – in the work? Or are they patting themselves on the back for just taking a step in the right direction?
On the flip side, the people who are most ready to do the work, the people who are the best clients for this coach, will look at the number and believe that this coach isn’t well-equipped to help them take the actions they need to take.
Fair? Nope, not at all. But just like I remind my toddler on a daily basis, “Reality isn’t fair.”
Whenever I price a new offer, for instance, my new Insight Intensives, I’m not only considering the value I’m offering, the time it takes me to prepare, my position in the market, or the benefit of my experience, but I’m also considering what price will create allow my clients to create the best results.
- What price will allow you to take this seriously?
- What price will ensure that you’re a success story?
- What price will push you past “comfortable” and into the discomfort of action?
If you’re a painter, what price will put your piece of art over the sofa? Or even get it hung at all?
If you’re a copywriter, what price will force your client out of cliche language & into what’s true to them?
If you’re a jewelry designer, what price will ensure your pieces get paired with fabulous outfits?
Sure, there’s quite a bit more that goes into those decisions. But don’t fool yourself that price isn’t a big factor in personal investment on all levels.