Should You “Charge What You’re Worth”?
Should you “Charge what you’re worth”?
Have you heard that you should “charge what you’re worth?” ...that in your fees you should “stand up for your value”? Let's reflect on this and various other ideas related to pricing...Posted by George Kao, Authentic Business Coach on Friday, August 11, 2023
Have you heard that in your pricing, you should “stand up for your value” ?
Let’s reflect on this:
How much is your value?
How much are you worth?
$25/hour? $250/hour? $500/hour? $10,000/hour?
Words matter. They shape how we see ourselves and others. Connecting our fees to our “worth” is a deeply unhealthy comparison.
Are you worth less than someone who charges more?
Truth: You are worth infinity.
You are a precious human being whose odds of being born are 1 in 400 trillion!
I always wonder whether “charge what you’re worth” was started by some high-priced coach who needed to justify how much they’re charging…
I have seen many people raise their prices (because they’re “worth” more!) and then what happened? Their rates became unsustainable for the vast majority of their audience. They had to lower their price, and felt very conflicted about it, because they had unwittingly connected their rates to their self-esteem.
So let’s stop using the word “worth” in connection to our fees.
Consider this more practical idea:
“Charge based on the market rate.”
It makes sense to set your price based on what your clients are expecting and seeing in the marketplace.
Look at your niche mates and what they’re charging. Then look at your own needs. Price your services accordingly.
Then, based on the market’s response, you might need to change your pricing.
There is such a thing as perceived value. If you have a more premium branding and copywriting, people are usually willing to pay more.
However, before we all rush to rebrand ourselves as premium / luxury, we need to consider whether our branding is authentic to how we wish to show up in the world?
Let’s look at another common idea:
“Charge what the market will bear.”
Economics teaches us to charge the maximum amount that our clients will tolerate…
Let’s flip this around and apply The Golden Rule — You are my market, my potential clients. How would you feel if I charged you the biggest amount you could bear?
This is what some high-price coaches and programs do. They charge as much as they can get away with…
Their justification: “If you pay more, you’ll take it more seriously and get more results.” Really? Are they using it to justify their own self-enrichment? The truth is that most people who pay for high-priced programs don’t get the results promised.
I used to do all this. I used to teach it, too. I’ve also worked with many colleagues who operated from this mindset.
This is how business is supposed to work, right? Everyone is supposed to be out for themselves. The sellers should charge more, and buyers should beware…
I don’t like this adversarial relationship between a business and the customer. I stand for a more caring vision: what if business owners had compassion for their customers and the customers also wish to take care of the business too? We can do this. We just need to remember that it’s not how most businesses are run.
Another common lie:
“Charge not for your time, but for the value you provide.”
So, if you’re a marriage coach who helps people avoid divorce, how much is that worth? Or an occupational therapist who helps someone recover their ability to work. How much value is in that?
These results could be worth hundreds of thousands of dollars. It’s ridiculous to price your services “based on the value you provide”… and your potential clients will think so too.
Higher Prices = Higher Quality?
“People have the idea that if it costs more, it must be better than a cheaper version.” People will think that, until they try the product and are disappointed… and then word of mouth spreads.
When you charge more, people expect more, and are more quickly disappointed. When expectations are high, you are in danger of underdelivering.
When you charge less, however, people expect less, and are delighted when they receive great service from you. This brings positive word-of-mouth. They’ll talk to their friends about what a great deal your service is!
Take a deep breath…
…and remember that we are all in this together..
Let us aim to operate our business to support the birthing of a more compassionate world.
A few years ago, I underwent a personal transformation, and it resulted in a profound shift of intent and motivation. My business priorities changed from “more profit” towards authenticity, service, and fulfillment.
I no longer want to charge “what I’m worth” or “what the market will bear.”
I charge based on Enoughness and Compassion.
Do I have what I need?
And, can I work on lessening my financial needs, finding fulfillment in my (inner) life, and in serving my community?
My financial reality is that for 20 years I’ve lived in San Francisco. It’s been expensive compared to most places. Yet as of this writing, I’ve just moved to Mexico! It’s been only 1 week, but my lifestyle here will cost less. This means that I will be able to pass on the savings onto my clients, and/or offer more profit sharing to my affiliates, many of whom are my clients!
Even so, while living in SF, I was still able to charge less than most peers at my level. I made sure my lifestyle allowed it.
Should you charge less than your peers? It depends on your needs, and your reputation.
Your audience might feel that you are so unique that you cannot be compared. This is why I always advocate for getting better at your authentic content marketing. Can you authentically, with integrity, position your service next to higher-priced peers? If so, then you should, because it’s true.
Compassion in Pricing
Besides Enoughness, I try to integrate Compassion into my pricing. We’ve all had the following two experiences…
Experience 1. We want to buy a service, but we see the price and we think “Wow! That’s expensive.” As we think about making the payments, we might feel stressed.
Experience 2. We love a service, and we feel the pricing is so affordable. “This is such a good deal! I would happily tell others about this service!” We feel relieved by their pricing… grateful… and we become advocates of their business. This is reciprocal compassion at work: the seller charges compassionately, and the buyer feels they want to take care of the business’ well-being, by adding gratuity (an expression of gratitude) or by spreading the word.
Two comments I received from readers of an earlier version of this post:
“George, when I first saw your pricing for your courses, I wondered “Is he missing a 0 in there?!” I definitely was full of relief as I had already spent too much on other programs that were way overpriced!!”
“…same! It’s such a relief to purchase something affordable that’s so high quality. It makes me really appreciate my investment and as a result, I’ve just bought more!”
I hope we can all give our audience that experience — “What a great deal!”
Important also is to remember that our 1–1 service does not need to be the lowest-price thing we offer. We can also offer books, workshops, or group programs for lower prices, which may then give the audience that feeling of relief and gratitude, while still giving them the benefit of our work. See my recommended business model for solopreneurs.
The bottom line — separate your fees from your “worth”. Aim to charge from enoughness and compassion. Build a clientele and audience that feels deep gratitude for your offerings.
(Article was originally written in 2018, updated in 2023.)