When’s the last time you tweaked your pricing?
When it comes to service-based businesses, pricing can be tricky. Asking for money in exchange for your skill is a vulnerable thing. We don’t want to offend, but we also don’t want to undercut ourselves (that’s the quickest route to burnout).
Here are 3 ways to give your pricing a makeover:
1.- Stop charging hourly.
- I have yet to meet a business owner that loves being in the “time for money” trap. One of the biggest restraints on scaling a business is hourly pricing.
I’m a big advocate for value pricing. This is looking at the value the client/customer is getting and pricing it accordingly. And truthfully, this is the best way to serve your customer. No one is buying your hours, they’re buying the value you bring.
Once I accidently locked my keys in my car (while it was running). I had to call a locksmith to come open it for me so I could retrieve my keys.
The locksmith arrived, and within 90 seconds my card door was open and he was swiping my card for $100.
I didn’t stop him and say “Woah, woah, woah! For $100, this needs to take at least 3 hours. Let’s drag this out, please.”
I don’t care how much time he had to put in. I just wanted my keys out of the car. The $100 I paid was for my keys, not his time.
2.- Give Options.
One pricing model I’ve used for years is the “Goldilocks” pricing plan.
If you didn’t guess from its name, Goldilocks pricing includes a small, medium, and large option.
When crafting this pricing model, build out your ideal offering for your ideal customer. What does it include? How much would you like to make from this service? Then, put your ideal pricing on it (remember, value pricing, not hourly).
This will be your middle package- the just right option. Once built, you can take away some core offerings from it to build your smallest package. A good rule of thumb is to remove 75% of what the middle package offers, and charge 50% of the middle package’s price.
Lastly, take your middle package and add a few offerings to increase its value. This can be increased support, or additional services that you can do, but aren’t your ideal tasks. Then, set this pricing at 2.5x time what you would charge for the middle package.
Because your middle package is your ideal offerings for your ideal client for the ideal price, most will naturally gravitate toward it. A few might opt for the lower option, and some might go for the larger package.
Which brings me to the last recommendation:
3.- Have a high ticket offer.
Some people want the best of the best. They are looking for all the bells and whistles and don’t mind paying a premium for it.
While the majority won’t go this way, it’s a good idea to have a high ticket offer in your arsenal. Depending on your industry, you can approach this in a variety of ways (and this could simply be your top Goldiocks package).
Your high ticket offer could be a 1-2 day hands-on workshop, or a rush order service. A good way to pinpoint your offer is by starting with the price. What would it look like if a client paid you 10x your normal rate? What could you offer to make this a worthy investment.
Last month I helped a client restructure her pricing before an upcoming consultation. Here’s an email she sent me shortly after:
Within about an hour of sending the proposal, he wrote back that he wanted the highest tier! This is 3x the amount I’ve ever charged any client previously. And he has already signed the contract and paid the invoice. I’m so excited!
Profit coaching goes beyond just Profit First. If you’re ready to make more money in your business, I can help. Schedule a free call now.