I’ve heard countless coaches push the ‘high-ticket’ (i.e. multiple £000 investment) business model and encourage you to double, triple, explode your prices so that you are “charging what you worth”. And, yes, a lot of people starting out in their expert businesses will tend to undercharge and so could do with a bit of encouragement.
However, is it always the right decision to raise your prices? And what do you need to consider if that’s what you’re going to do?
In this week’s episode, we look at…
- The importance of getting clear on your personal vision for your business and what that means in terms of an overall income target.
- The danger of comparing your rates to those of your competitors without knowing the context behind them.
- The argument for raising your prices, and how to approach your pricing with confidence and integrity.
Listen in to evaluate whether you should be raising *your* prices.
*Resources mentioned during the episode*
The Outsiders Business Academy – A self-paced course for you to work through in your own time, to learn – and implement – the foundations of building a profitable business that lets you escape the 9 to 5. onestepoutside.com/course
Raise your prices
Oh, it’s a good one today. Pricing. I know it’s such a good topic and important topic, a difficult topic and evergreen topic. And hopefully one that will today bring you maybe a different perspective on how you’re thinking about this. I run workshops on pricing is part of the business model work I do in the Academy course, the incubator, it’s in my book, and but a couple of specific things I want to talk about today and specifically answering this question, Should you raise your prices and just in terms of background, you know, let’s face it, most people just starting out with their business are underpricing. Because of lack of confidence, because of not having yet the proven results and so on. Not having the testimonials not really knowing what they’re doing and where they should be pricing. It’s the first time we’ve sold ourselves as it were compared to working in a big company.
You know, it feels a bit uncomfortable, and rare, most likely first offering coaching sessions, for example, for free, or pitching ourselves to corporate clients for far too little, not realizing how much money there is in corporate to be had.
So most of us start out by pricing us too low. And then most gurus and we’ve talked about those gurus say focus on the high ticket, raise your prices. I’ve had people say, you know, write down your target income for this year, and then triple it and then you know, you need double your prices right now and so on. So, okay, what is the answer? Is it about being ethical and affordable? And I’m just helping people. So I want it to be free for everybody? Or is it about No, this is a business, I’m gonna be a high end high ticket because that’s more profitable. Of course, the answer is somewhere in between but a few considerations right first, and it will be no surprise to you, if you know me and the name of this podcast of reimagining success. The question is, what does success look like for you? Beyond financials, right? What’s your big picture vision of success? Why are you in this business? What are you trying to achieve in your life? What does your desired lifestyle look and so on? But also financials, revenue income? So, you know, do you want to maintain kind of a booty key solo practice? Or are you trying to build a big team? Are you trying to build a company that you can then sell in the future? Are you after, and you can tinging this with a little bit of judgment, big ego sales figures, spending a load a load of money, but actually not making so much profit? Or do you want to, hey, take out a lot of money from the business live the lifestyle you want, and maybe have kind of a leaner setup.
So really understanding what success looks like for you in terms of the business setup, how you run your business, and of course, the bigger picture lifestyle.
Second, don’t look at competitors, or rather do look at them initially, to map the market to get a lay of the land to see the different ways of doing it, you also want to get a sense of where you are, you know, you don’t want to be bottom of the barrel, you don’t want to be kind of a Walmart competing on price only, you don’t want to be a commodity. This is why we’re building a personal brand and relationships and so on. We want to be unique and have that unique value to offer. But you you do want to get a sense of are you kind of in the middle are you really Gosh, this is the highest, you know, when you’re really experienced and confident, you know, you can get the results. You can say yeah, I’m the most expensive in the business. I know I am. But it’s because I can get you the results. And I’m the best right? That’s a level that take some time to get to. But I have heard some people say that so kudos to them. So map the market, see where they are, however, coming back to the first point on what does success look like these people, I have a different version of success to you. I have different requirements. I’ve got two kids and crazy expensive childcare in the UK, we’re doing up our house, and but then on the other hand, perhaps don’t have hugely luxurious lifestyle demands. We do like to travel, I do like to buy things. I’m also trying to be minimalist, etcetera, etcetera, right? I mean, I invest in a personal trainer, and nutritionist, gym membership, all these things that I believe are really important and so on, and in my courses and training and personal professional development. But that looks different for you than it does for me than it does for someone else. Not to mention that you don’t know the fact that I’m charging 10,000 pounds for a one hour call with me. You don’t know if anyone’s ever bought that call the fact that someone’s listed on their website, sometimes people don’t even put their prices on the website, right? Which makes things difficult. You don’t know if I have any clients, how many clients I have those clients are getting results. If I am successful, let’s call it that at those prices. So take competitor pricing with a pinch of salt. That’s not the best place to start right for me. And this is not quite the point. I want to spend too much time on today.
But I do start with a K How much do you want to earn in the year and I always take the round number let’s say it’s 100k Whatever the currency is, how many hours do you want to work in the year? I think it’s what is it? I’ve forgotten the number again, it’s 2000 something if you’re going to be working 40 hour weeks, you know 52 weeks of the year but of course that’s not the goal. If I’m working three day weeks, if I want to take three months off, let’s say I’m doing sort of term time, I don’t want to work during the school holidays and so on. I want to travel, I’ve met a couple of early retirees, retirees now, one was cruising down the Amazon, someone else’s sailing around the world, that’s the dream, isn’t it. So maybe want to do that for three months. And importantly, a lot of your work will be non billable, in the sense that, you know, I’m talking to ping pong, sorry, I thought I turned my sound off, I don’t know what happened there.
So I am talking to you now. And that’s free. I’m not getting money back for this particular time. When I’m doing my accounting, talking to my accountant, sending receipts, admin strategizing, any kind of marketing, really, it’s costing money, if anything, it’s not money I’m earning right, the actual hour that I’m on a workshop that people are paying for, or presenting corporate, or coaching, or responding to people and so on. That might be for some people as low as 30% of their total hours, it might be as high as 70 80% For some people, depending on your business model. But that’s how I arrive at a rough number. And you know, you might arrive at let’s say you are working 52 hour, weeks, 40 hour, 52 week years, let’s see 40 hour weeks is what I’m trying to say, working those 2000 hours, maybe your hourly rate would be like a 50 pounds, right. But if you actually do, let’s say three day work weeks, like I do, and you know, I don’t know, 40% billable hours or so. And you might arrive at a 200 per hour or three, four or 500 per hour, right.
So it’s not to say that that is the price you should charge. But that gives you an idea of how you’re ever going to get to your desired income. And the kind of clients you need to be working with and the kind of value that kind of offering you need to be doing it, you can’t then have some really cheap thing for $20. Because that’s by no means going to hit your your targets, unless you can do some hugely scalable offering where you’ve got 3000 clients paying for it right? But but those of us with small audiences starting out, don’t can’t do that.
So then the important question is, do you raise them? Now, you know, reasons for raising your prices. The first and lots of people will say this, and it is true, we know this, investing more does mean a higher commitment from the client. If I you know, I had the classic example of a friend who paid for an expensive French course because she thought if I pay for it, then I definitely go, if you pay for the gym membership, unfortunately, don’t always go but then if you pay for the personal trainer, then you will actually show up, they’ll hold you accountable and so on. If you pay for a coach, you know, clients tell me often gosh, I did the work because we had the call, right? So initially, that’s the external accountability. But I’ve now paid 3000 pounds to work with you.
So by gosh, I’m going to put in the effort to earn that back. Right. You also get a higher caliber of clients. I hear people say again, and again. And it’s certainly proved to be the case. For me, if someone pays a little bit of money. They’re so demand. They expect the world they free content, and they’re expecting everything. Whereas somebody who’s used to investing in a quality service, you know, if you imagine a busy CEO, or high level, business owner, whatever, even someone at my level, I’m used to paying people and knowing that I need to put in the work. And I’ve invested in this and I wouldn’t. And I’ve got a client right now who I mean, hopefully all clients are like this, but he’s very respectful of my time, you know, when we get to the end of the hour, that 45 minutes, whatever you say, I’m conscious of time, rather than, you know, have me say you’ve got to stop now. Ting time is money, whatever. So you do get a high caliber of clients when you’re charging more. And because of all these things, they’re more likely to get results. So the irony is there is a bit of magic to just raise your prices and nothing else, nothing else changes, you get a high commit from the client, high caliber of clients and higher quality results. Also, at the time of recording, you know, there’s inflation. But beyond that, and there’s always some inflation, right, your confidence is increasing as you grow personally, and literally as a business.
Your results are improving, you’re investing in your learning every year.
So there should be if not more frequent and annual price increase so that you know there are some very valid reasons for raising your prices regularly. However, and this is the key question or key answer or the here. Don’t just raise the price because someone told you to certainly don’t say Oh, I’m raising my prices because my my coach told me to Nope. The key is to increase the value of your offer, and then the price increase will follow. So same again, the value of what you’re offering is what’s important, and the value. It’s not just about packing in more stuff. It’s not that classic Oh, you get 300 bonuses worth $5,000 because that leads to overwhelm. It takes more time. It’s probably not good. Learning to get used and it’s certainly not necessary, it’s actually value is actually about improving the customer experiences, getting people better results with less effort less time, right? I’ll pay you more, if you can help me lose the weight, you know, get fitter train for the marathon, you know, improve my personal brand, you know, get a better reputation, sell more, etc, etc. in less time. The example I always use is, you know, if you want me to do graphic design, I might be able to do I could certainly do something simple in Canva. But it took me a long time, I don’t have a lot of experience in doing it. For other people. I don’t have expertise in Adobe Illustrator, all these things. And it took me a long time does that mean you should pay me more than someone who’s a professional graphic designer who does an incredible job in a short space of time, because that is what they do know, you’re paying for the value, right? And that’s hard.
When you’re first starting out, it’s hard to put a price for me, you know, it’s not necessarily Hey, you’ve made six figures in your business.
So it’s hard to then actually say, hey, look, I’ve made this but you can also say that it’s priceless, the things you’re doing. Because if you’re getting people being healthier, happier, more fulfilled, etc, avoiding burnout, then that’s, you know, that’s pretty much priceless. So it is a subjective number. But the point is not to focus on the number and obsess about it right, that will kind of naturally follow as your confidence increases, and so on. Don’t just arbitrarily raise your prices. Think about the value, how can you increase the value of what you offer, then, when your clients think you’re amazing, because they were when you’re over delivering and not to say that you should work too hard for what they’re paying for, but you know, you’re doing an incredible job, they’re going to tell everyone they know, you’ll become oversubscribed. And then of course, you can raise your prices, because then you’ve got a waiting list, then you’ve got you know, if you’ve got 10 people for five spots and or you know, 100 people who want to pay you then you know, if every company says yesterday, and then you know, hang on a second, there’s definitely time to raise my prices. And you can kind of add 10% Each time or, you know, a little bit of discomfort is probably a good sign, not feeling like you’re going to be sick when you say it, that’s maybe too much. And sometimes I think, right, I’m gonna go with this pricing, and then I kind of reflect on it. And it can go either way. Either I can go no, that’s actually from my experience now.
And from the results, I can get people that’s not enough or it can be off. No, no, that doesn’t make sense, especially compared to the other offerings as a group program, there’s individual coaching, and so on. So it is a bit of a journey, evolving. As you increase in confidence as you get more results. As you improve your program. You know, my business incubator has evolved so much in terms of content in terms of my expertise and experience with clients in terms of the frameworks in terms of how we meet. And so one that’s very different now than it was when I started it in 2018. So, I probably didn’t give you a yes or no answer. But the truth is, it’s not about the pricing. Do do that exercise. If you haven’t already done it have thinking about what success looks like for you, and what kind of the hourly rate could be given the billable hours, the holidays, you wanna take sick pay admin, so one, sick days and holidays, and so on, don’t get distracted too much by what competitors are doing. And then really focus on the value of what you’re doing not not just a price, right? Because that number is, especially if you’re doing something bespoke that can that can evolve.
If you’re working with corporate, by the way, it’s really good to know what their budget is. If I’m doing a pitch for a keynote, I could say, well, it’ll be about 2000 3000 pounds or something, maybe that’s what I feel comfortable with. But if I first asked them, and they say, Oh, our budget is 5000. That’s not to say that you then budget 5000 We can get Okay, well, they’re willing to pay 5000 What could I do to make this worth that much. Maybe I come in at 4000 or 4500. And I also offer, you know, that maybe the 5000 pound is you get the keynote and a follow up session afterwards on the workbook. But then there’s also a 3000 offer, which is a shorter session. There’s no follow up a workbook and so on, you know, just a simple example. So focus on the value don’t get distracted by competitors. Looking forward to your thoughts on this one. If you have any follow up questions because I know pricing is a tricky topic. Do let me know you can email me at podcast at one stuff i.com Or you can message me on your favorite social platform. Thanks so much for listening, and I’ll see you next week. Bye for now
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