Lacking confidence in your pricing?

If you’re a freelancer or founder of a business, there’s a good chance that you’re very passionate about what you do, and the impact you can make in the world. Your work is rewarding but the problem comes when facing the uncomfortable part of deciding and, worse, saying how much to charge for your product or service.

Perhaps you’ve experienced the awkwardness of discussing your fees when a client says, “I love what you do, how much does it cost? “You might get a little anxious and start mumbling or trying to justify your fee. Maybe you ask yourself, “can I quote the figure I really want to charge?” but then find yourself going low on price which leaves you not feeling good about yourself? This is a common pattern but can be changed with the right mindset shift. 

To be confident with your pricing, you need to work through some specific areas that will be affecting you, and in this article, I’m going to unpack the problem and offer 3 steps you can take. Firstly, we uncover your money story / narrative that you hold. Next, we’ll explore your perspective on price setting and then, finally, look at a strategy you can apply straight away for a better approach to your price structure. 

I’ve been a solo founder for nearly 20 years, and I’ve worked in different industries from photography, wellbeing, psychology and training. I’ve always been using my skills, passion and expertise and turning these into some form of commercial work that people will transact with, so I know how difficult charging the right fee can be. In recent years, I’ve applied my field of psychology and human behaviour to my own pricing and I want to share this with you.

When I’m coaching business owners, the pattern of blurred boundaries between a person’s self-worth and their company’s worth can be the first place to start. It’s absolutely critical that you separate our self worth and you from your business worth. Setting up clear boundaries about your fee is connected to your business offer and is not a reflection of you is the first thing to be clear on.

The next key distinction is to recognise how ‘you’ think about pricing. If you are thinking from your own perspective and not your client’s perspective, you’ll be too close to this and your own biases and emotions will influence the price you set. You are not the purchaser and this first person perspective will also be another block in being confident to charge the optimum price. It’s very important to look at the beliefs you hold around money. What you believe personally directly affects your business decisions. Your core beliefs will be unconsciously directing how you set your prices, how you speak about money to clients and how you feel about money in general. Core beliefs need to be named, understood and challenged if they are negative. 

A mindset shift that needs to happen is the distinction between selling your time and selling your expertise. When you change your focus to the benefits your client will get or the problems your business will take away, that’s where true value is. I’d suggest your time is never for sale; only your expertise, skills and your problem solving abilities are for purchase.  

Step 1. What’s Your Money Story?

The narrative you hold about money is the first place to start. The core beliefs you have about money, be they positive or negative, will shape your thoughts and actions.

The first exercise is to write out your money story. What were your influences from growing up? What did your caregivers or parents say about money? What was your upbringing like? What beliefs have you adopted about money? All of these experiences will have shaped your worldview and once you see it clearly, you can work on updating things

Look at what you’ve written and highlight your core beliefs. Notice which beliefs are limiting or conflicting. For example, you might say things such as ‘money’s hard to come by’ or ‘I have to work really hard to get money’. Perhaps you view money as distasteful or bad in some way. Whatever those beliefs are, write them down so you can see the structure of your thinking. You have a money story and it will be affecting your behaviour but by making it conscious, you can take the next step of deconstructing any limiting or conflicting beliefs . 

Take your list of beliefs and read them out to yourself and follow that with a question which asks “is that really true?”. Do this for every belief that you have. This simple, but powerful, question will shake up the rigidity of your beliefs and disrupt any old thinking patterns. The process will help you detach what you’ve inherited from other people that no longer serve you. 

Step 2. What’s Your Perspective?

The second exercise will help you think from a client’s perspective – the person who will be purchasing your product or service.  

By stepping into their shoes, you can see the wants, needs and benefits from their perspective. A client doesn’t have the emotional attachment to your business that you do; they only want to solve a problem and get their desires met. Spend some time ‘being’ a client – embody what they think, feel and want and ask yourself “what problem do you want solved? How much is that worth?”.

Write out the ‘benefits’ list of all the value you would get as a client. Use this as a metric to guide your pricing from the client’s perspective. You will also be able to clearly articulate all of these wonderful benefits in your marketing and sales processes.

Step 3. Have a Pricing Strategy

Our third step is to look at a pricing strategy to apply what you have learned in step 2. 

There were numerous strategies but one that works well for the majority of businesses is a ‘tiered pricing’ strategy. You’ve probably purchased a package for your smartphone or an internet provider at some point and have had the option to select a package out of 3 or more options.

I use a similar strategy with my coaching business, and it’s really simple. It can be 3 tiers or more. For example , the first tier is the basic option, the second tier for standard and the third tier for a premium option.

A good idea using pricing psychology is to have your main product or service in the middle at a healthy but fair price for its value. Some clients will go for the basic option and some will go for the premium option, but the majority of people will go for the one in the middle. The price point from tier 1 to tier 2 will be higher but the price for tier 3, premium option, wants to be a bigger jump. For example, £49, £89, £289.

To summarise, start by unpacking your money story, challenge any negative or limiting beliefs and bring your mind up to date. Next, shift to thinking from your clients perspective. Understand what it is to have their pain, their issues, their challenges, and notice how your product or service can solve that. When you’ve done that, then you can be strategic with a tiered pricing programme. This also allows you to meet different people’s price point with different levels of service or products you can offer. When you combine all of that, then you’ll have a confident pricing strategy. 

Finally, I’m a member of The Good Business Club and I believe in having a positive impact on the world through my business. I currently use a company called Ecologi to deal with climate impact through a climate positive initiative and tree planting program. I use a percentage of my business revenue to plant trees. By having a bigger purpose than only making profit, clients know that they are also a part of something bigger and this can have a positive impact on your pricing as well.

Sal Jefferies
Sal Jefferies Coaching & Training 

https://saljefferies.com