If there’s one thing all entrepreneurs’ have in common, it’s learning to charge what you’re really worth.
Hands up if you’ve experienced these feelings before:
- You’re anxious about raising your prices and losing clients
- You’re uncomfortable talking about fees to your clients
- You keep comparing your fees to everyone else’s and worrying that if you charge more, no one will hire you
- You discount your fee or products because making less appeals more than no customers
- You think you’re not expert enough to charge more, even though your clients rave about you
Well you’re not alone. In fact attracting more clients, which I wrote about here, and charging what you’re worth are THE top concerns of business owners.
A Real World Example
I learned a critical lesson recently, when I launched my online Social Media Bootcamp program – Don’t ever sell yourself short – ever.
I had done my research online and then priced it at a level for my audience – entrepreneurs on a budget.
I wasn’t taking into account the huge amount of time and energy invested to bring it to launch, plus the value of my knowledge. I managed to cheapen it by offering it at too low a price, what’s more with an initial discount.
I asked for feedback on those who purchased and my trusted network. Many thought that for all that was on offer it seemed too good to be true – and therefore that it probably wasn’t a great product.
It also hadn’t aligned with my solid image and credibility that I’ve built up through blogging, producing a great free eBook on social media, and the level of content I regularly produce.
Why did I make this mistake?
Well first off, I didn’t know my current market well enough. I should have recognized that bootstrapped entrepreneurs are not the best at investing in themselves.
This is only true to a point though, because if you really show the value of how your product or service will benefit them – then they will pay and you should charge accordingly.
Second, you have to learn by experimenting. See what motivates people to take action. I’m always about providing value but not excluding people with high price tags.
In theory this is admirable; in reality this is not smart. Because people have a price perceived quality issue – if you’re too cheap they don’t see it as valuable. Products and services that cost more must surely be worth it.
So I advise you to do your research first and then price it at what you believe you’re worth and what return on investment your customers will get from it.
What did I do to resolve this?
Firstly I should advise that my launch in the first week was quite successful so it was by no means a failure, but it certainly didn’t pay for all the hours invested.
I re-launched my sales page, which looked much more professional. I wrote better, more compelling copy. I added in visuals that clearly showed what they were getting.
And I tripled my price. Yes tripled it. I can’t afford to let my program go for cheap when I know it’s worth it. Plus I added in 2 months of ongoing coaching to sweeten the deal as part of this – and it wasn’t clear beforehand.
I added in a 100% money back guarantee. I will honor this too of course. You’ll be surprised at how much more comfortable this can make someone feel.
I know that sales may slow as a result, but the people who will buy are the kind of people I want on my red carpet.
What are three things you can do today to earn what you’re worth?
1. Know the market
Target people who will pay for your service. I primarily had developed an audience who, although great, were not at the stage of wanting to invest in themselves, or felt they didn’t have the money.
What I needed was to approach established businesses struggling with Social Media, who could see the immediate benefits of the program and that it was a small price to pay.
As I mentioned in my last article, you want those Red Carpet clients who value you and energize you, not the nitpicking, cheap, unbelievably hard to please ones.
2. Expert positioning
These days you could argue that too many people are suddenly experts in social media – what part exactly? I was positioning myself as a credible and knowledgeable `Personal Trainer’ but didn’t make that clear enough initially.
My unique value proposition is that I break it all down, help you understand each component step by step, and give you ongoing coaching.
You have to be clear on why you’re the expert and show people why that matters. Social proof in the form of testimonials is a given too.
3. Act the part
Given that I do everything myself, I had created the sales landing page and content, and outsourced the design. The thing was, it was looking like a patchwork quilt – not shabby, but not fully professional and pulled together.
When it comes to branding yourself, you need to produce consistent materials, content, and designs that prove you’re serious about what you do. People buy into that. Therefore you gain a reputation for being amazing and people pay accordingly.
What’s one thing that you’re going to do today to make sure you get paid what you’re worth and attract the right clients?
Natalie Sisson is the founder of WomanzWorld – a site devoted to women entrepreneurs wanting to create freedom in business and adventure in life. Read more about Natalie here.
Natalie Sisson is the founder of the Suitcase Entrepreneur – the number one destination for entrepreneurs wanting to create freedom in business and adventure in life. Her mission is to ensure you use social media, outsourcing and online tools to be able to run your business from anywhere in the world and create the lifestyle you want. A Kiwi Entrepreneur and adventurer, Natalie previously co-founded a technology company that produced FundRazr – a Social Commerce Application for Facebook. She has 9 years of international integrated marketing experience and is also a Social Media evangelist and personal trainer for businesses. She’s a nominee for Canada’s Top 40 Under 40, a contributor to Forbes, The Visa Business Network and Entrepreneurial Woman.ca. In addition, Natalie is a Regional Body Sculpting Champion, a World Record holder in Dragon Boating and a Gold Medal World Beach Ultimate Frisbee player.
Always a tough decision for small businesses. With College Pro franchisees, we offer whole classes on how to make appropriate pitches and how to quote the cost of a job, and yet it always comes down to that individual… do they think they can charge a little more/less and still to a good job? It’s a hard thing to learn as an entrepreneur!
@Brian: You’re right, it can be tough to balance, but when you figure it out, you’ve got it made!
Thanks for the great post, Natalie! Very useful stuff here!
-John
Rule of pricing. Buy low, sell high, collect early and pay late. Pricing is all over the place. Some people take advantage of ignorance in the market and price high. Some put there prices different in different markets. Trying to see what the market will bare. Some try the scientific methods and lose. But your article that you need to know the market works if you can compete in the market you have chosen and you do not end up being a minnow in a shark pond.
I do SEO consulting, I price my service by the leads I’ll bring into the business. If a potential lead is worth 2,000 on average to a business. And I provide the business 20 leads a month. What’s wrong with charging 10% (which is perhaps what a sales commission would be) if that business stands to make 40K? Still an insane ROI
All of inclusive packages may well eliminate the irritation in preparation data out of an individual’s neck.