Are you avoiding the temptation to low-ball your self-worth? Are your services priced to protect your livelihood? Have you created the necessary systems that shield your business from hagglers and days of naturally fluctuating self-worth?
The gold nuggets I am about to extend have worked successfully with business owners I have coached over the years. I postulate these scenarios to promote the establishment of boundaries for business owners who may have either muddled boundaries with their clients or who have not implemented the degree of structure necessary to create lift-off in their business as of yet. Let’s discuss a few dynamics on how to price your services to protect your business and self-worth.
Use Coupons to Your Advantage
“Running coupons” (i.e. Groupon, Living Social) brings in potential clients at no cost to you, except your resource of time to redeem them. It provides you the ability to practice developing your skills of selling, business management, scheduling sessions and more. Use coupons to carve out your fledgling business just as you would run water through an aqueduct to find out where the leaks are (i.e. areas of improvement). The free client flow (water in the aqueduct) provided by coupons gives you invaluable experience as a business owner. You can have a profitable business purely based off of coupons if you learn how to construct an aqueduct along the way. That is, you must learn how to systematically convert coupons into sales in order to profit and avoid a revolving door business.
You will undoubtedly attract both profitable clients and unprofitable clients via coupons. Coupon holders are generally broken down into three types: 1) Interested, 2) Curious and 3) Cheap. It’s worth practicing identification of which is which as early as possible. The ‘Interested’ will listen intently. The ‘Curious’ will need you to get them into touch with their motivations, and the ‘Cheap’ will have the “something for nothing” mentality. Some of the “Cheap” are experienced hagglers who may sniff out if you’d be willing to lower your prices (and your self-worth) if you make them an offer to invest in your services beyond the coupon session. Don’t bend to their will. If you allow a potential client set the rules in your business, it is a red flag. Habits such as these ensure rough waters are ahead, even if you seem to be making money at it.
Every person you see will teach you something about you and about the type of business you want to run. Every time you see an opportunity to make a tweak, make a note of it, and then continue carving out your business systems until there are no more leaks in your aqueduct.
Remember, time is your most precious resource as a business owner, so any time spent in service to a potential client should also be spent qualifying if you want to work with them before you make a sales offering. Nevertheless, you should be happy as a lark to have “free marketing” bringing in prospective clients for you to practice on.
Never Lower your Prices in Front of a Client – Ever.
“Can you go lower?” they ask. Perhaps you could, but it would hurt you, your business and your client. You are lowering your value, you are making it harder to stay in business (unless this is a “hobby” for you), and you are allowing the client to determine your value. There may be cases where you want to be generous, but those should be limited exceptions (a set number per month), and not standard practice. If negotiating price with a client is your standard practice, then I can virtually guarantee that you haven’t identified what your services are worth.
Unless you have decided ahead of time the ‘lowest discount you can offer,’ and unless you have presented on paper to your client your pricing system, you may be in trouble. Your price points should be “set in stone,” from your highest non-discounted acceptable price all the way down to your lowest discounted acceptable price. Your pricing system protects you from your day to day fluctuations in self-worth. You never want to be caught thinking or deciding something about your worth in front of someone you are about to sell to. Simply say, “I’ll get back to you on that,” if you need time to think. But don’t think or decide in front of them. If you do, you’re at tremendous risk of self-sabotage in compromising your self-worth for their approval.
Encourage “Yes” by providing a Few choices.
Money loves structure, so the more you can parse out your services into blocks of time (as in weeks or months), the more you are training the client to understand the power of long-term results and that true change comes with consistency and commitment (true with anything). Giving clients options allows them to place themselves into your offering based on their affordability. If you need weeks or months to do your best work then determine what length of time you need to produce your best results and then design a package around it. Don’t try to work your magic into a smaller time frame than you need. Create the depth of your work with your clients according to your needs as a practitioner, and then allow them to choose among a few offerings as to where they fit in. Avoid “yes or no” scenarios by presenting choices and then asking them, “Which option feels the best to you?”
Offering More Value Means Commanding Higher Prices
It’s so easy to win over clients when you simply exceed their expectations. When clients “get more” by working with you as opposed to “the practitioner down the street,” they are receiving a higher value for what they’ve paid. This could be as simple as offering extra worksheets, MP3s you’ve recorded, eBooks, whitepapers, etc. Any supplemental material that gives more value can present enough leverage to command higher prices, especially if no one else is offering it. Ideally, your extra value offering should not equal ‘extra time’ you spend with the client. But if extra value does mean extra time spent with the client, be certain you are charging handsomely for your extra time. Your available time as a practitioner will always be your most valuable resource and hottest commodity, and excelling as a business owner at higher levels of success will look like getting out of the “time for money” trap, even if you’re very profitable.
Offer Add-on Value Incentives Instead of Discounted Prices
Last, never take away from your bottom line once you’ve established your price points. If someone asks for a discount and it’s below your lowest pre-determined discount, consider offering an add-on value of something else you’ve previously created instead. If they see the value – great! You’ve closed the deal. If that doesn’t work, I would let the client go. If this sounds bold, it’s probably because you are priced too low right now for what you are offering, or you are offering too much of your time for your quoted price (same difference).
I’ve touched the tip of the iceberg in terms of teaching how to price your services for your business and your self-worth. There is so much more to learn. The question is: “How committed are you to your business?” And if so, “How long will you take to learn the basic necessities to become predictably and residually profitable?”
When you invest in yourself, two major things happen:
1) You shorten your learning curve, and
2) You keep yourself accountable to your success.
Now, go out there and keep making a difference, practitioners! Take care and good luck.
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About the Author: Todd Schaefer
Get your free 30-60 minute consultation with Todd Schaefer by emailing (drd8 at hotmail dot com) with "Business Coaching Inquiry" in the subject line.