I love pricing for value. In other words, the value I provide you is so much greater than the value of the money you have to shell out to get it.
Pricing for value works because it leaves both parties feeling richer. I sell my service and receive the money I want. You receive my service and receive the information/ideas/action items you want. The “pain” it causes me to deliver the service is much less than the money I receive. The “pain” it causes you to pay the invoice is much less than the information you receive.
We both receive what’s valuable to us. And we’re both extremely happy people at the end of it all. And we’re likely to do business again.
But value is only half the equation. When pricing, you also have to consider how to get results.
A fresh life coach sets her rates at $50 per hour. That’s more than she’s ever made in her life per hour so she feels pretty good about it. She also knows that she can deliver loads of value for that $50. And, she’ll be $50 richer every time she sees a client.
That all sounds good, right?
But, “You’d be a fool not to buy this at this price” pricing can work against you. If your product or service requires some work from your clients or customers – and really, who’s doesn’t? – your pricing might be enabling complacency & inaction.
So that life coach might get some clients at that rate. But do those clients feel invested – both literally & figuratively – in the work? Or are they patting themselves on the back for just taking a step in the right direction?
On the flip side, the people who are most ready to do the work, the people who are the best clients for this coach, will look at the number and believe that this coach isn’t well-equipped to help them take the actions they need to take.
Fair? Nope, not at all. But just like I remind my toddler on a daily basis, “Reality isn’t fair.”
Whenever I price a new offer, for instance, my new Insight Intensives, I’m not only considering the value I’m offering, the time it takes me to prepare, my position in the market, or the benefit of my experience, but I’m also considering what price will create allow my clients to create the best results.
- What price will allow you to take this seriously?
- What price will ensure that you’re a success story?
- What price will push you past “comfortable” and into the discomfort of action?
If you’re a painter, what price will put your piece of art over the sofa? Or even get it hung at all?
If you’re a copywriter, what price will force your client out of cliche language & into what’s true to them?
If you’re a jewelry designer, what price will ensure your pieces get paired with fabulous outfits?
Sure, there’s quite a bit more that goes into those decisions. But don’t fool yourself that price isn’t a big factor in personal investment on all levels.
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Are you pricing for results? http://t.co/yhBGVkHS
This morning I woke up and raised the prices of most of my scarves in my Etsy shop. I realized my hats and fingerless mitts were well priced but the low price I had on my scarves made them look cheap. I don’t know how it will work out in the end but I think this is what I needed to do.
This post helps to confirm I may not be so crazy after all for doing what I did at 6:00 this morning.
Are you pricing for results? Your customer’s, that is…: http://t.co/yHkYaFuX
Ever since hearing your talk on Pricing for Profit with Megan Auman, I made the decision to raise my prices 400% (I was massively undercharging!). I’ve had a squirmy feeling in my stomach all week and have been lying awake at night worrying about my “too high” prices. Thank you so much for reassuring me that I’m doing the right thing! I know my products are worth every penny and I’m excited about adding value to my customer’s experience of my whole brand every day.
I think it’s all about looking at the market and not in my own wallet. “If you’re a jewelry designer, what price will ensure your pieces get paired with fabulous outfits?” This rings true to me. I look at the higher end, decide where to position myself, and price accordingly.
Wow! You are so right once again. This has been my main concern over the past couple of weeks after I reopened my Etsy store. I think it is even harder when one is trying to price artwork. Your thoughts it these matters are really helpful and appreciated. Thank you:)
Tara, you are right on the money (!) with this article. The longer I do what I do, the more I realize that the value I put on my service is reflected in my pricing. I am now focusing on the customers who really value what I do instead of trying to get everyone to buy what I am selling.
Are you pricing for results? Your customer’s, that is: http://t.co/xkTelzpF – vai @taragentile
I attended your Etsy session with Megan on pricing and the following days raised all my prices. I realized during the session that they were far too low and I was never going to make a profit. Has it affected my sales? No, I’m still selling jewelry and now I feel that I’m also getting a fair price. Thanks for the advice.
Tara, I need more clarification here, please!
JoAnn, for an artist, it’s less about “results” and more about ensuring that your client truly values what they are purchasing from you. There are a lot of glorified postcards for sale in the art world today. And while that has its place, it means a lot of great art just ends up on bulletin boards or refrigerators. If you price your art as art (and not a postcard!), your patrons will treasure it more. They’ll be sure to frame it and hang it somewhere special.
Dear Tara, thank you for further clarity. Selling work as fine art (except work for hire) HAS been my selling process since out of college in 1975. The issue has been volume/sustaining momentum. I have gallery representation – and sell photographs as signed, limited editions, but few and far between. (Dealer rep. has been/is still the tradition for selling highly valued art, even online) The edition size can vary depending on how much I love the image, how long I want to be ‘tied’ to it, and how I choose to ‘value’ it – especially in light of new internet opportunities.
A couple of beliefs I still consider: An artist mentor in college once said with all sincerity/honesty that I can never be paid for the true value of my work; original art is priceless. It is. Another dentist/photographer friend a few years ago spoke of the difference between selling houses and selling shoes.
So here I am entering the internet marketplace. Do I want to continue to sell houses or shoes or both? The issue has been a low volume of house sales. At the same time I want to create a few new much larger editions that can be sold as shoes – on Etsy for example, to reach and serve more souls who may never afford the house prices. I want to do both. Appreciation for your input, Tara. Found you via Danielle LaPorte. Love, JoAnn
Don’t let your prices come between your customers and their results: http://t.co/V1mpa3lD
RT @taragentile: Don’t let your prices come between your customers and their results: http://t.co/V1mpa3lD
RT @taragentile Don’t let your prices come between your customers and their results: http://t.co/I8VOmzjH < so so good.
Don’t let your prices come between your customers and their results: http://t.co/MkuUR5jh (via @taragentile)
RT @taragentile: Don’t let your prices come between your customers and their results: http://t.co/V1mpa3lD
Excellent advice!RT @taragentile: Don’t let your prices come between your customers and their results: http://t.co/5Q6i4IC5
i’m learning how to write well for my articles, any tips? i would really appreciate your help.http://www.bancobrasil.net
Are You Pricing For Your Client’s Results? http://t.co/R6n0iBLs from @taragentile
Another fantastic post Tara!
I wonder what you thoughts are on overpricing.
I have been one to take a few huge leaps of faith with particular coaches and I am still paying the credit card with interest.
I can’t say it wasn’t worth every penny because it helped to change my life and after years of investing nothing in my development, I believe I am worth it. However, some coaches get to the point where they
(( price out ))the people who helped to make them wealthy to begin with. (We should all be so lucky?)
But I wonder if over time that will back fire.
What about over pricing?
Is there such a thing or is it a case of if you are selling for that price, then it’s worthy of that price?
Thank you!!!
Hi there,
I’m a first time poster on here and I’ve got to say I’m loving the content! I couldn’t agree more with this post. The biggest issue that many service providers have is that they try to price at what they think is “affordable” to their client. This of course, is assuming that the client is price sensitive.
The reality is that for many customers, they aren’t necessarily obsessed with price. It completely depends on the product or service that’s offered. The best way to price is as Tara says – by value. Focus on the tangible benefits that your customer or client receives from your product or service and price accordingly.
After all, if after a phone call with a client gives them an idea that adds $10,000 of revenue each month for them then you’ve provided serious value. The client would happily pay more than $50 for value like this. It’s your job to show them that you can bring this value with your sales copy and other elements such as social proof and so on.
What if you finally helped a client overcome their fear of flying so that they could see the world. To me, the value here is unquestionable. You’re not selling “how to get over your fear” – you’re giving them their life back. As Bob Berg says “become a go giver”. Always give more than your customer pays for – over deliver all the time and your customer will forget about what it’s costing them.
Therefore you can see that pricing based on the emotional benefits that your customer receives is what you’re actually trying to do. Can you put a price on freedom or happiness? All that’s left to do is to market yourself accordingly and BOOM, your customer stops caring about pricing.
This is actually a huge discussion with a lot more to it – I’m so impressed that Tara distilled it to a manageable post!
Steve
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