Are you Undercharging? Discover the 5 Keys to Effective Pricing
In the world of thought leadership and coaching, pricing can often be one of the most challenging aspects to master. Many experts struggle with setting prices that truly reflect the value they provide, often undercharging for their transformative services. This episode of the Untapped Podcast aims to demystify the art of effective pricing, offering a comprehensive guide to help you align your prices with the real worth of your expertise.
Led by Dalaney Davis, this episode delves into five essential keys that every thought leader and coach should consider when determining their pricing strategy. From understanding your intrinsic value to grasping the true costs of running your business, these insights are designed to empower you to set prices that not only sustain but also elevate your business.
1. Understanding Your True Worth
The first key to effective pricing is shifting your mindset from charging for time to charging for results. Clients invest in the transformation you provide, not the hours you work. This fundamental change in perspective is crucial for setting prices that reflect the true value of your services. To quantify your worth, consider all aspects of your professional journey: your education, past job experiences, extensive reading, and ongoing training. Each of these elements contributes to your expertise, making it a valuable asset worth a premium price.
2. Knowing Your Business Costs
Accurately calculating the costs of running your business is the next critical step. This includes not only the obvious expenses like payments, taxes, and subscriptions but also the hidden costs such as client acquisition and the support services that keep your business operational. Understanding these financial demands helps ensure your pricing covers all costs, making your business sustainable in the long run.
3. Industry Standards for Pricing
Benchmarking against industry standards provides a useful reference for setting your prices. At Untapped, the marketing flow methodology outlines various pricing tiers:
Entry Offers: Priced between free and $50, these are designed for quick, easy wins to attract clients.
Core Offers: Passive products like courses range from $100 to $1,000, while more active services like coaching can be priced between $2,000 and $10,000.
Premium Offers: Starting at $10,000, these involve high-level, personalized services.
Exclusive Offers: Ranging from $25,000 and up, these might include equity sharing or other high-value arrangements.
4. ROI and COI
A powerful approach to pricing involves understanding the return on investment (ROI) and cost of inaction (COI) for your clients. If your services solve significant problems and deliver substantial returns, your pricing should reflect this value. For example, helping a client secure a higher-paying job or improving their business's performance justifies higher rates. Conversely, the cost of inaction—what clients lose by not addressing their issues—can also justify your prices. By framing your services in terms of the tangible benefits and avoided costs, you can set prices that resonate with clients' real needs and expectations.
5. Practicing Your Numbers
Confidence in quoting your prices is essential for successful sales. Many professionals falter during sales conversations because they are not comfortable stating their prices. Regular practice can help you overcome this hurdle. Repeatedly saying your prices out loud, whether in front of a mirror or during mock sales calls, can help you deliver them with conviction and ease. This practice ensures that when the moment comes, you can confidently communicate your value to potential clients.
Conclusion
Effective pricing is about more than just numbers; it's about understanding and communicating the value you bring to your clients. By recognizing your worth, accounting for business costs, benchmarking against industry standards, leveraging ROI and COI, and confidently stating your prices, you can set rates that reflect the true value of your services.
Recommended Next Episode:
EP72: How to Sell Without Feeling Salesy
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This transformative three-hour session is designed specifically for creatives and solopreneurs who are passionate about their work but struggle with traditional sales methods. Learn how to align sales with your values, overcome personal blocks, and confidently charge what you're worth
