Spoiler Alert: It Requires a Simple But Bold Shift in Mindset
Few things scare entrepreneurs more than raising their rates.
Among the top fears are:
- Not getting new clients
- Losing existing clients
- Industry peers view you as shallow and materialistic
In this post, I’ll tell you why those fears are largely unfounded and how you can put them to bed once and for all without losing any sleep.
If I charge more, won’t fewer people sign up to work with me?
My answer to that is a resounding Yes!
Yes, fewer people may sign up to work with you when you charge more, but that’s a good thing for two reasons:
- The people who sign on are more open to your help and willing to put your recommendations into practice
- You can devote more of your energy to your individual client’s’ specific issues without feeling stretched thin
That sets up a win-win outcome for you and your clients.
How to take advantage of the powerful psychological principle of perceived value and land clients willing to pay you more and love you for it.
You get what you pay for.
Like me, you’ve heard that phrase uttered hundreds of times. It’s ingrained in the psyches of most consumers. You’ve probably thought it yourself more than a few times (I know I have).
Even though it’s reached the level of cliché, dismissing the importance of “you get what you pay for” in your marketing mindset is a terrible idea. Here’s why.
“When you take a sip of Cabernet, what are you tasting? The grape? The tannins? The oak barrel? Or the price? Believe it or not, the most dominant flavor may be the dollars.”
Several years ago, researchers conducted an experiment. They gave people different wines to taste. Each of the wines had a different price point: one low, one medium, one high.
Unbeknownst to the people, the low priced wine and the high priced wine were exactly the same. Can you guess what the results of the experiment were?
If you guessed people preferred the most expensive wine, you’re right.
Not only did people choose the more expensive wine as the best tasting, they also gave detailed reasons why, e.g., they could taste the higher quality grape.
But the benefits of charging more don’t stop there.
The curious relationship between higher client participation and your rates.
A friend of mine once confided, “When clients pay more, they pay greater attention.”
Turns out, she’s exactly right. (The reverse is true too.) And there’s a psychological reason for that. When people pay more for a professional service, they tend to view the person providing the service as an authority or expert in their field. Take cardiac surgeons for example.
If your loved one needs heart surgery, do you shop for the doctor with the cheapest rates?
Of course not. You find the surgeon with the best reputation and the one who has a schedule full of people seeking her expertise.
And if you’re lucky enough to get a consultation, you listen carefully and intently to everything the she says and put it into action.
Why? Because you view the surgeon as an expensive, sought after authority and you’d be crazy not to take her expert advice and recommendations.
Here’s how can you put the theory of charging more into practice. (And yes, there’s a psychological aspect to this too.)
The first thing you’ve got to do when charging higher rates is convince yourself it’s the right thing to do.
To do that, think about the numbers and what they represent to your client. For example, what does more sales represent to your client? Is it $500 per month? $1000 per month? $5000 per month?
Let’s say your coaching results in $5000 per month for your client. That’s a whopping value of $60k per year. And a staggering $300k of value over five years.
Given that return on investment for your client, don’t your rates seems more than fair?
What you’ve just experienced is a psychological technique called reframing. It allows you to think about your services in terms of the value you provide rather than what it costs you to provide it.
When you can do this, you’re well on your way to achieving the shift in mindset that allows you to confidently raise your rates.
Discover how to implement these tactics and strategies to create win-win relationships with your clients. Check out our Boutique Business School and click here to set up a quick consultation call so we can both find out if this makes sense as a next step for you and your business.