Pricing is one of the trickiest P’s of marketing. It’s especially tricky when you are pricing your OWN services because a) you’re too personally involved and b) it’s hard to measure exactly like-for-like value. Putting a price on a can of soft drink is a whole lot easier than pricing a health transformation service for instance. It doesn’t seem to make it any less complicated when you know that you deliver amazing value and transformation for your clients – many of us still get stuck.
I struggled with this when I first started my copywriting business. I went from a large 6 figure salary in corporate world, believing every day that I was absolutely worth every penny of that to the company, to charging myself out at less than half of my hourly rate as a copywriter when I first opened my doors. In hindsight it was ridiculous! I had SO much experience, so much to offer, but somehow I just found it vomit-worthy charging more. When I first tried to settle on an hourly rate I looked at competitors for ideas and I looked at complementary services to try and find where I fit. Whilst I could gauge an industry ‘norm’, I really struggled to know what would be an acceptable amount for me to charge. The thing was that I wasn’t a kid just starting out in this profession, nor did anyone have exactly the same experience as me.
I felt I deserved to earn roughly what I had been earning prior but somehow it didn’t seem to work out that way…
I choked when I tried saying the hourly figure and felt clients simply wouldn’t pay it. It felt like more than I ‘should’ be asking (god knows where the line of ‘should’ came from!) I knew I was intrinsically ‘worth’ it, but I just couldn’t ask for it. And then the mind games began and I started to doubt I was actually worth it….
Buy why do we get befuddled and anxious about pricing our services??
What I’ve observed is that there is a very real sense of fear and dread surrounding the pricing of services amongst female entrepreneurs. And I think the reason is twofold: first, there is an irrational fear that we will appear to be showy or big-noting ourselves if we attach high prices to our stuff (and apparently that’s not cool or humble or attractive); and secondly, there is a loud voice in our heads that says ‘no-one will buy your services at that price’, (essentially we construct our own mythical glass ceiling on what our services should be worth, usually born out of a comparison to others in our niche).
Whilst I understand that these fears are very real to the person experiencing them, they are in fact myths that need to be busted. I’m not saying there isn’t an issue with over-valuing services (lord knows there’s a bit of THAT going on around the place!), but by the same token you don’t want to underprice your services, either. It’s a disservice to you and your clients.
So where does this leave us?
Paralysed, stuck, and faffing about. Most of the time you end up setting some random price, then discounting it for friends, neighbours, the cat… Or worse, when it comes time to actually providing an estimate to a potential client you take a wild stab in the dark (and realise later you’re working for a lower rate than the Maccas kids). Or you may even apologetically offer a price then practically invite them to negotiate with you on it.
Really big mistake, my friends! This behaviour demonstrates one thing – that you don’t believe enough in the transformation you offer. You will inevitably undervalue yourself and provide doubt in the minds of your prospective clients.
So, I want to help you with this, because it’s absolutely necessary to get this right before you can effectively market yourself.
Here are some simple steps to help you calculate a good honest rate for your services:
Step 1: Conduct industry research to understand reasonably where you fit in amongst ‘competitors’. There will be those with more and those with less experience (time-in the game). See what they’re charging and how you would stack up on an apples for apples comparison. Pick a pricing bracket that feels comfortable for you given where you fit in terms of experience, skill and actual services offered.
Step 2: Write down all the experience you have had (skills, education, industry-specific, international) that add EXTRA value to the service you now offer and consider what that’s worth to your clients. Consider also how long it’s taken you to gather that experience, learn those skills, amass that knowledge, and figure out what that cost of education has been to you. This absolutely needs to be considered when you are pricing your service – don’t leave it out because you think it’s irrelevant to what you’re doing now. Every step in your story has a lesson and adds unique value to what you do.
Step 3: Decide whether you want to charge per hour or per project/package (depending on what you do this may or may not be relevant). A fixed cost per project can be more manageable for you and more digestible for your client – they know exactly what they’re paying for what. You will have to be very good at keeping a close eye on scheduling and milestones however, so your hours don’t blow out, (which in turn minimises your profits), and ensure you have but in ‘fat’ for unexpected sidelines in the project (inevitable!). An hourly rate can be more transparent, but you’ll have to get very good at estimating how long things will take if you are to take on individual projects and do bespoke work for clients.
Step 4: Once you’ve picked a rate you’re comfortable with intellectually, you need to check in with your whole self to see if it’s really right. One way to do that is to stand in front of a mirror, stick your left hand out and then say some statements that you know to be true (eg. My name is Jo. My cat is Oska.) Feel what vibrations you get in your hand. Then say some things you know to be untrue and see what feeling you get in your hand. This calibration process will set you up for testing out your rates. Now that you know what Yes and No feel like, look yourself squarely in the eyes and go ahead and say “My services are worth $100 per hour.” If you get a ‘yes’ feeling, then keep increasing the prices until you get a No. it should be quite obvious for you. Alternatively start outrageously high and work back down until you get a Yes. It’s not foolproof, but it is a fantastic way to get a good gauge on where your pricing should be. After all, you do have to be able to look people in the eye and say “the investment to work with me is X…”
Pricing your services with confidence and clarity is the key. If you’re not comfortable with the price, your client sure as hell won’t be! Once you’ve decided what it is, stand firmly in it.
Communicate your quotes to clients with confidence and never ever apologise for your prices.
Finding a suitable rate for your services doesn’t have to be a nerve-racking process. When you use a smart step by step process like I’ve outlined above, it can in fact be quite fun! Last of all, don’t forget to review your pricing each year! Your results, experience and education should have grown, so let your pricing reflect that too.