I received so many comments on my post regarding what to charge that I decided to write a follow-up. The gist behind that post was that you will move forward in your business faster if you charge more for your services.
Many people commented about the perception of what you are charging – in other words “How can your services be any good if you are not charging very much?”
What is perception?
Perception is important because it is how people see you. Do they see you as an expert? Do they regard you highly? How do you know how you are perceived? Perception equals perceived value. In other words, the rates you are charging affect the perception of the value that person is getting from your services. Now, this is not true if you are charging a high rate and don’t have much to offer.
So how do you determine what you’re worth?
There are several answers to that question that I wanted to explore today. Recently I was having a conversation with another coach and she told me about a man she knew who provided very transformational coaching. She said he literally changed people’s lives and she was saddened because he only charged $100 an hour for it.
So why would that be?
Perhaps the man didn’t know or realize what kind of value he provided to his clients. Perhaps he lacked the self-confidence to charge more for his services. Perhaps the only pricing model that he knew for his services was to charge by the hour. This can happen if you don’t believe that people will pay the higher rates you ask for.
Another reason is because so many coaches are out there today, coaching has become almost a commodity. Once that happens, prices lower overall. In other words, once there is a lot of something, it devalues that object. Why do you think doctors specialize in a certain field? Because it takes a lot of training and there aren’t many of them! Specialists can earn more. The problem is perception! Coaches specialize by choosing a niche. 98% of people who hire a coach are satisfied with the experience! People place value on coaching, especially once they begin to use a coach and really see the process of coaching in action!
Now I ask you:
What if your potential client really needs help, and you know your product or service can fill that need, but they truly can’t afford it?
Would you lower your rates if it would help them?
What if something you are buying is truly not worth the price? Have you ever had that happen? What did you do?
I have been studying pricing for ever! From the price for a medical device or pharma to a home appliance to services- and I still can’t get it to be a science. (I have even published an article on this http://mondaq.com/unitedstates/article.asp?articleid=46532 with a more recent version @ http://www.adjuvancy.com/Literature.html)
And, it is ABSOLUTELY easier to guide another’s perceived price than one’s own. Therein lies the true problem. We have ego, self-doubt, as well as knowledge and fear all imbued in the decision process.
Hi Karen, I had a recent experience where the product I bought sounded like it was the greatest thing in the world and when I went to use it, it was a dud. I had used another tool which did almost the same thing but was free, and looking back I like the free tool better. I guess people assume that because something costs money it is guaranteed to work, people have the mentality that if its free something must be wrong. I think free trials or at least a free sample or giveaway gives people a taste of your work (and not a tiny sample, but something they can get a good idea what they are getting into) and they can give it a personal value after trying it. PS when people give away a monthly trial they should not expect the customer to remember to unsubscribe before they are charged the next month, I think a friendly reminder from the company “your free trial is about to expire” please tell us if you will continue with a paid membership or if you want to cancel after the free trial is the fair and ethical thing to do.
Hi Karla!
Amen to that one! I can totally relate to that – because so many people sign up for something (and forget that they have done so), don’t get a reminder, and then end up not liking the product and getting charged! In fact I had this exact experience lately. I have a section on this (customer service) in Chapter 14 of my book Full-Time Woman, Part-Time Career titled “Being Professional.”
Most people I know charge a regular rate and sometimes offer a “sliding scale” fee option for a limited number of clients per year. They may also take on 1 or 2 volunteer cases a year. Both of the latter options can be used as tax write-offs.
I needed this blog post today. Thanks for sharing. Coming off of almost 10 years of being a full-time mom, it’s hard to remember how to quantify my value. For so many years, there was no dollar amount assigned to the hardest job I’ve ever had. Now I’m writing, something I absolutely love doing, so it’s hard to put a value on it. I need to give this more thought. Thanks for the kick-start!
Interesting topic and many viewpoints. I believe that many people will pay for what they want to learn, so people asking to do your course for free is something I stay away from. It seems that they cherish it more if they pay (even if it’s an exchange of some sort). I would give a discount under circumstances. I also believe that giving some things away for free is of value, since it provides them with knowing what they are missing.