3 pricing mistakes that are limiting your income

3 pricing mistakes that are limiting your income

One of the biggest problems I hear about from entrepreneurs is lack of consistent cash-flow in their business. This generates a lot of stress in your business month-to-month and when you’re not being adequately paid for your services it leads to a lot of self-doubt, undervaluing and questioning if it’s really worth working all these hours for little financial reward. Often the problem is linked to how you’re pricing your services in the first place and the conversation that takes place when you state your fees.

Here are 3 of the top tips I share with my private clients that have helped them dramatically increase their revenues (and remove a lot of stress from their business):

[h3a]1) Undercharging for your services[/h3a]

[blockquote author=”Vanessa Shaw” align=”pull-right right”]If you really do put a small value upon yourself, rest assured that the world will not be raising your prices for you.[/blockquote]If you really do put a small value upon yourself, rest assured that the world will not be raising your prices for you. A lot of service-based professionals have been taught to attract clients through a lower investment offer in the hope that clients will later sign up at higher levels with you. The problem with this approach is that it’s based on the assumption of having large numbers of clients signing up for a lower offer and it can take many years to build up those large numbers of clients and followers in your business. Plus low pricing also leads to client perception that you’re not the best or the leader in your field. Perhaps one of the most damaging side effects though of undercharging is the dent it makes in your own self-confidence. When you charge too little it can eat away at your self-confidence and becomes a very difficult cycle to break. Interestingly, you may even find yourself getting fewer clients with low pricing which erodes your confidence even further and starts to reinforce the belief that clients aren’t willing to pay for your services at all. This is definitely a cycle to break!

The solution is to design your services and pricing on the value and results clients will receive from working with you and not on the time spent with you. Consider all the knock-on effects clients receive from working with you, across the different areas of their lives and you’ll quickly see that you should probably be charging a lot more for your services.

[h3a]2) Stating your prices before you’ve fully explored the client’s situation and understood how you can fully help them[/h3a]

Would you go to the doctor and ask them how much they charge? No of course you wouldn’t. Instead you go to them with your symptoms (problem), expecting them as the expert to make a diagnosis and then give you the best prescription of next steps that will give you the solution you are looking for, along with their fees.

Like the doctor, you also need to show up confidently as the expert in your field and not react when a client asks directly for your fees. Often time the client doesn’t know the full extent of their problem and they don’t know the different solutions either. Instead, you can simply respond by saying “I can happily share that information with you. May I ask you a few questions first?” Then spend some time exploring their challenges, clarifying the results they are seeking to achieve to see how you can help them. Only when you have the complete information at hand, should you make your diagnosis and present the prescription.

[h3a]3) Discounting your services when a client says, “I’d love to work with you but I can’t afford it”[/h3a]

When a client says, “I can’t afford it” this is often a smokescreen for other issues. You need to clarify if money is the real issue here. If the client is serious about proceeding but isn’t able to pay in full (as is often the case), you can offer a deposit and payment plan option to spread payments over time. Alternatively, you can offer them a smaller version to get them started. Avoid the temptation though to discount the price of your services and still provide the whole program. I can promise you that this barely ever ends well for either party! You end up resenting the client and they end up less committed and therefore don’t get the best results either.

As the business owner you need to be in control of your pricing, charge what you’re truly worth and help your clients achieve phenomenal results. This way everybody gets to benefit!

If you know you’re struggling with pricing and money conversations and you’d like some help to change it, sign up for a complimentary Business Strategy Session so we can talk further.

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© 2013 Vanessa Shaw

1 Comment

  1. Kristi Church 5 years ago

    Hi Vanessa,
    I’ve been in a position where I’ve had to draw a line in the sand and hold my ground on pricing–once I did that, I found that in most cases, clients that really want to work with me will do so as their perceived value is equal to the pricing. If I haven’t translated my value properly to them, then I lose the deal even with payment plans, etc. Have you found that to be a key component when the price objection comes up? Just curious what your thoughts are.
    Thanks for sharing!
    Kristi

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