Recently I was on a tele-seminar with one of the “gurus” (I won’t say which one), who said something interesting. He was talking about coaching and he said that you will move forward faster if you charge a lot of money for your services. WHAT?
In other words, an increase in price will jump-start your coaching business. This flies in the face of conventional wisdom (which I have expounded in the past). In my book Full-Time Woman, Part-Time Career,
I talk about the 5 things you should be aware of when setting your fees:
1) Cost of living and the going market rate in your part of the country.
2) What services you are providing.
3) The client’s ability to pay.
4) Competitor’s rates.
5) Your own profit margins.
Many of the gurus don’t agree with this model. Looking back on it, although there is still validity to it, it may in fact be a little outdated, and apply more to freelancers, given the pricing models that have evolved since then and that many people have adopted today. However, it’s still true that if the client can’t afford it, they can’t afford it!
So back to the concept of charging a lot more for your services – what I think he was trying to say is that like attracts like. In other words, if you charge more for your services you will attract a different type of person (clientele). What kind of people? Clients who like what you have to say and how you say it, and as a result, are more willing to pay a higher fee for your services.
In other words, you will arrive at a particular level, also known as “hitting your stride”. Ironically, I was running on the treadmill this morning. I run two miles every day, and I usually always run at a certain speed. Today I was in a hurry to be finished, so I bumped up the speed several notches, and found, quite to my (pleasant) surprise, that I could easily keep up at the increased level. In other words, I pushed myself and instead of thinking it was hard, I hit my stride. Apply the same concept to that of your business, and to your rates. Push yourself. Get outside of your comfort level. Charge what you’re worth, not what you think people are willing to pay (although as a coach you definitely will have different clients who pay you differently).
Once you hit your stride it will all come together!
I always like it when someone challenges us to charge more! Talk about FEAR!!!!
I am not claiming to be an expert in this matter- as proof, we often are told (after the project/product is complete) that we charged too little. We use science/math to develop our rates (but that only sets the minimum charge), with a little tweak to up it from there, but we know, we leave money on the table.
In spite of our ability to price our clients’ products and services, we are not adept at honing our own. In spite of our published articles on the subject! Because, of FEAR! The FEAR of not getting that contract because we quoted too high a price…
Ah, well, life goes on!
GREAT piece. And, thanks for reminding me to bring this up at our next Board Meeting.
Great points, Karen. Too often companies rush to compete at bottom prices, and then go out of business due to poor cash flow.
Karen you are correct on this. When we price things to low it is like trying to get a good T-Shirt and Wal-Mart. If you are lucky you may find the right one out of a stack of 15 different shirts and then again maybe not.
Don’t ever under estimate your talent.
Nice post and thank you for sharing.
Debbie
Hi Karen!
Thanks for inviting me to your Blog…from The Blogging
Mastermind Comment Tribe’s page. 🙂
Since I have become a member of MyLeadSystemPRO, I
am learning how to increase my personal value via the
education that I am receiving. Then, I can turn around &
maybe down the road (if I want to) create a coaching
program…the world is our oyster, right?
Have a highly inspired day…your tribal friend Steven Suchar
It’s true. People will perceive “value” with the higher priced item. It’s just human nature. The way I look at it, my time is valuable so I price my consultations accordingly. Nice post!
Hi Kerry,
I’ve found out that when I know my worth – and believe it in my heart – people around me vibe with that feeling. It’s a subconscious type thing.
Thanks for sharing!
Ryan
Sorry, I meant Karen 😉
Hi Ryan! – Thank you for reading and replying. I think that the “vibe” you are referring to has to do with what you are putting out there for everyone to see. The Universe aligns and gives back to you based on whatever intentions and feelings you put other there.
Melanie – Great comment. Thank you for your insight! I thought I added the social media buttons. In any case, bartering does work well in some cases.
Thank you everyone for reading!
Karen
Excellent article, Karen. Thanks for posting.
Thanks, Pat
Very enjoyable read, Karen!
I just wish you had some social media “sharing” buttons on your post so I could pass this around and around. 🙂
I’m the very best candidate (IMHO) to read this post and take heed. I have a tendency to give away the store! I’ve never quite figured it out, but “money” is an issue I’ve always been uncomfortable around.
My first inclination is to “barter” versus “charge”. And you know what? That approach and concept has worked in my favor time and time again.
However, the name of the game as a small business owner is, obviously, to make money. And I think you’ve given your readers a lot to think about here. On a personal note, I feel we should never discount ourselves. Everyone is good at something, we all have areas of expertise and special skills, and we should definitely charge what we’re worth.
Great post Karen. It’s true — Higher Cost = Higher Perceived Value. I also agree with Roy, that it’s often easy for us to price the products and services of OTHERS, and yet we find it difficult to do for ourselves. I don’t think it’s always FEAR, though. For me — and many of my clients — it takes a third party with a fresh perspective to recognize the true value of the products and services we offer.