Getting Your Pricing Right – 3 Key Points
Do you ever feel like you are either under or over charging for you are delivering? How about the feeling of not being completely sure what to deliver – is that an issue too? Getting your pricing right has a lot to do with what you deliver and the value it provides.
This past weekend I worked with a client that is not new to business but is new to this current business. She has incredible transformational skills that are highly valued by her clients. The challenge is she felt she was constantly giving more time than she was charging for and she could not see how she could charge more for what she was delivering.
Your Ideal Client
Knowing your ideal client will always make it easier to sell your value. In a discussion today with a business owner (let’s call her Beth) that sells personal care products, that are organic and healthy, Beth talked about how many people asked, “why would I buy your product when I can get the same product at Walmart for 1/4 the price?” Those questions don’t bother her any longer because Beth knows her client is the mother with a child that cannot tolerate additives, scents, gluten, etc., that are the cheaper way of making the products sold for less. Her ideal client needed what she has and is excited to find it both locally manufactured and sold, even at a higher price.
What is the Result/Benefit?
Our clients don’t buy for features, they buy for the results it will give them. This is why it is so important to understand who your ideal client is. By knowing who they are you can also know what they value most. Is it more time to be with their family, less stress around managing a business, or healthier kids that don’t need prescriptions? Whatever it is, it will be something that closely affects the happiness and enjoyment of their lives. Your product or service needs to speak to their needs. It must provide a benefit that solves their issues. If you don’t know what that is, ask your best clients what it is they get from you.
For Beth it is not the product she is selling, it is the health of a mother’s child which in turn gives them the ability to do better in school and live a happier more productive life. Beth knows that a child with sensitivities or allergies cannot easily focus in school and they start acting out or falling behind. Beth also knows that having toothpaste, hand cream, or cleansers that don’t aggravate or trigger her child is absolutely invaluable when her client’s child comes home with an ‘A’ in school.
Always know your ideal client’s needed results so you can sell the benefits and not the features.
Your Own Value First
You must be able to truly believe that what you are charging is of great value. That you are giving something that is going to do what you say it will do and you must know the cost in hours and expenses. This helps determine your pricing.
In the case of my transformational client from this past weekend, she was offering a choice of two coaching packages: 3-month or 6-month, where the 6-month was twice the price of the 3-month. So what is the value of purchasing 2x more time with her? There was nothing that she knew her clients needed that would be defined by spending twice the time with her. So what did they actually get? It turned out that her best clients usually started with a focused session that identified their blocks. They actually left this first visit feeling better. The remaining time is how she locked in their transformation, went to the deeper blocks, and kept them continually feeling better. Her problem was she felt guilty about giving them 2+ hours for the first visit because she was not charging them for it and she did not want to increase the price because she did not know the value (or at least she could not define the value in terms of benefits and results).
Without changing her hourly rate we re-evaluated her product delivery and benefits and came up with a product that met her ideal client’s needs, gave them measurable results, and was priced to cover her costs, both in time and in expenses. It did not feel more expensive. It was actually easier to sell as she could speak directly to the transformation and the time it would take. She could stand behind her offering and really make a difference. It made selling more like an invitation for her clients to feel better and be more productive.
By knowing her ideal client and their needs she could create a product with lots of value that gave the results they were seeking. She could now easily charge what she was worth.
Being congruent with your value first will allow you to be valued by others and will make you more competitive. Charging what you think people will pay will not. Don’t let an industry, a mentor, or a potential client tell you what to charge. Do the research and the math and make your numbers represent the actual value. It will be worth your time.
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