In last week’s post, I talked about how to raise your rates naturally and with integrity.
This week, I want to give you a specific exercise to help you actually set and raise your rates.
There’s a lot of talk on the internet about setting “premium prices” for your services and finding VIP clients, and charging more and more and more.
Because of this, I think there are some things out there that are simply priced too high for what you get.
And, there are many things that do cost a lot of money, but they also provide a HUGE amount of value.
So let’s make a distinction: Something can be priced at $12,000 and be highway robbery. And something can be priced at $12,000 and be an excellent value for what you are getting and totally worth spending the cash.
What we’re aiming for, of course, is creating programs that have great value. And that value comes from the kind of results you’re able to help people create. It comes from other stuff too, like what’s actually included in the program.
Now, here’s the thing, regardless of how valuable and amazing your program is, if you’re JUST starting to sell programs, you’re probably not going to feel comfortable, nor have the skills, to sell a $12,000 program right off the bat.
Even if you already have a successful business – let’s say you’re a therapist, you have a full practice of clients, and you’re making good money – if you’re changing your business model from one-off sessions to programs, it’s just not going to happen instantaneously.
You’ll need to ease into it, growing your experience, confidence and skills over time, so that ultimately, you can create a more robust and effective program, and feel comfortable charging a premium price for it (because it’s actually a premium service and you’re getting great results with people).
So how do we get from point A to point B? How do we go from charging $1500 for a 4-month program to $3500 for a 4-month program?
I’m going to share with you a simple method to set your initial fee for your program and then how to raise it over time, using the Pricing Game.
Part 1: How To Set Your Initial Fee
Ok, so let’s say you’ve got this shiny new program that’s meant to help solve a pressing problem for your ideal client. Very exciting.
But pricing it – eek! That’s where you get stuck. You hear the business “gurus” on the internet telling you to “charge what you’re worth” (gag) or “charge luxury prices and then go find VIPs to buy,” but neither of those things quite sits right with you.
So let’s take another tack. Yes, you do want to charge what your services are worth, but here are three things to think about:
- That changes over time as you get better at what you do. Especially if you’re newer to your craft, then it makes sense to charge less at first. You’ll get better and can charge more as you get better results with people. You will also add more value to the program over time. For example, I have now have a huge vault of resources for my clients that I just didn’t have when I started out.
- While you may know what you want to charge for a program, you might not be ready to actually charge that now, because you are still gathering the confidence to do it, and the skills to write and speak effectively about your program.
- You have to be able to get the words out of your mouth without choking when you’re talking to a potential client. Bottom line.
So we have to come to a number that feels good in your gut and doesn’t breed resentment on your part, AND pays you what your services are worth.
So first, find the number that equals the cost of the sessions you are offering added together (based on your current rate), plus about 20%. So if you usually charge $125/session, and your package is 8 sessions over two months, your minimum charge for the package would be about $1200. (The reason for the 20% bump is because you are actually not charging for your hours but for the transformation that occurs, so it’s totally just an estimate and could be much higher).
Now for a gut check. You can do this as a guided visualization using the number you just came up with:
Imagine someone handing you a check for the package they are about to begin with you. There’s a number written on that check . . . $1200. Does that number resonate with you? How does it feel as you accept the check? If it feels right, great! But see if you can make the number a little higher and still feel good. Visualize another $100 or $500 added to that number. If it feels uncomfortable, try to notice whether it’s a good edge . . . bold, but right-on, or if it truly feels too high for where you’re currently at in your business journey. Do you need to lower it a bit? Add a little more? Breathe into each number you try until you find the one that feels just right (kind of like Goldilocks).
What’s your number?
Part 2: A Fun and Organic Way to Raise Your Fee – The Pricing Game
If you know me at all, you know that I am all about an evolutionary, natural approach to business.
We are constantly learning, adapting, growing, changing, and putting something new out there and going ‘round the cycle again. Business (and life) is not linear!
But we tend to get stuck because we think that if we decide that something in our biz is going to be a particular way (say, a price), then it’s that way forever.
The reality is that there’s always room for evolution and change. Nothing’s permanent.
You can actually change your price every single time you offer your program if you want. Really?!
Yes, really. That’s what I did when I first started my business, I swear.
Here’s what you do:
- Do another gut check. Dream into the price you ultimately would LOVE to receive for your program, even if it’s a ways off until you believe you can actually charge that much. Let’s call it $2800.
- Settle on your first price (using the method above). Let’s call it $1600.
- On your next consultation call, offer your new program at $1600 (remember, this is a number that feels good in your gut NOW so it should not get stuck in your throat).
- As soon as you get a new client at the initial rate, commit to raising your rate a little bit. Maybe it’s $100 more for the next client. It gets easier after someone says YES, trust me.
- Or, depending on how much experience you have, you may also decide to do three (or whatever number) programs at the $1600 rate, and then up your price by $200.
- Eventually, you’ll get to $2800, and it will feel awesome.
- And of course, you can always offer payment plans.
It’s that simple.
It might take a year or so to get there, but you’ll slowly get more and more comfortable asking for a higher rate…
- As people say YES to your program,
- As you work with more people and gain experience and get better at what you do,
- When you’ve tweaked your program and added more cool stuff to make it even more effective,
- As you witness the results that more and more of your clients are getting,
- And as they write the testimonials to prove it.
You can do this. It may not be realistic for you to charge “premium” prices right out of the gate, but over time, you CAN step into this!