Have you heard that you should “Charge what you’re worth?”... that in your pricing, you should “claim / stand up for your value” ?
Let's look more deeply at this.
How much is your value?
How much are you worth? $25/hour? $150/hour? $500/hour? $10,000/hour?
Does this mean that people who charge more are worth more?
Words matter. It shapes how we see other people and ourselves. Connecting fee structures to "worth" sets up a very unhealthy comparison.
Are you worth less than someone who charges more?
Truth: You are worth infinity.
You are an incredibly precious human being whose odds of being born are 1 in 400 trillion!
“Charge what you’re worth” is an insidious lie, started by some high-priced coaches who needed to justify how much they’re charging you.
I have seen many people raise their prices (because they’re “worth” much more!)... and then guess what? They saw their business decline.
So let’s stop using the word “worth” in connection to our service fees.
Here's a truer, more practical idea:
“Charge based on the market rate.”
It makes sense to 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, and your reputation in the marketplace, and price your services accordingly.
You might also need to change your pricing, based on what the market’s response is.
There is such a thing as perceived value. If you have a more premium branding and copywriting, people tend to be 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 truly wish to show up in the world?
For me, I prefer to be minimalistic and “among the people”… a “guide on the side” rather than a “sage on the stage.” Luxury branding is not for me personally. However, for some people it may feel authentic.
Let’s look at another common idea:
“Charge what the market will bear.”
You are supposed to charge the maximum amount that your clients will tolerate…
Let’s flip this around and apply The Golden Rule — You are my market. You are my potential clients. How do you feel if I charged you the greatest amount you could bear?
This is what many high-price coaches and training programs are doing. They are charging as much as possible to maximize their revenue and profit.
Their justification: “If you pay more, you’ll take it more seriously and get more results.” They are using it to justify their ulterior motive: their own self-enrichment. The truth is that most people who pay for high-priced programs don't get the results promised. I've written about this before: Beware of expensive business trainings.
I used to do all this. I used to teach it, too. And I’ve worked with dozens of JV partners who operated from this myopic mindset.
We shouldn’t be surprised: 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...
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 a person recover their ability to work again. How much value is in that?
Either scenario could be worth hundreds of thousands of dollars or more. It’s ridiculous to price your services “based on the value you provide”... and your potential clients will think so too.
Again, start at the baseline of the market rate. The market rate is the audience’s vote for what a service is “valued” for. Let us not use some arbitrary “this is valued at…” number.
Higher Prices = Higher Quality?
"People have the idea that if it costs more, it must be better than a cheaper version." This is true... until word of mouth spreads, and it always will.
When you charge more, people expect more, and are more quickly disappointed. When expectations are that high, you'll probably underdeliver in their eyes.
When you charge less, however, people expect less, and are delighted when they receive great service from you. They'll happily give you testimonials and talk about you to their friends.
Take a deep breath.
Let’s allow our hearts to soften… and remember that we are all in this together. Let’s reconnect to a greater purpose, to our higher values.
Let us aim to operate our business to bring forth a more compassionate world...
A few years ago, I underwent a personal transformation, and it resulted in a profound shift of intent and motivation. It changed my business towards authenticity, service, and fulfillment.
Now, 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?
Here’s my current financial reality: I live in San Francisco, one of the most expensive cities in the world, and for personal reasons I need to stay here for now. If I lived in Mexico or Thailand (which I might do one day!) I would charge far less.
Even so, I already charge less than most of my peers, and I’m grateful to be able to do so.
Am I saying that you should always charge less than your peers? It depends on your needs and your reputation.
Your audience might feel that you are so unique that your service cannot be compared to market rates. 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
The other factor I follow in my pricing is Compassion. We’ve all had the following 2 experiences:
Experience 1. We would like to buy a service, but we see the price and we feel sticker shock. We think “wow, they charge a lot…” As we think about making the payment(s) we might feel stressed, rather than relieved and grateful. If the buyer has done any shopping around, they have a sense of what the market rate is...
Experience 2. We love a service, and we feel the pricing is so affordable. “This is SUCH a good deal. I would be so happy to tell others about this service!” We feel relieved by their pricing… grateful… and we become advocates of that business. This is reciprocal compassion at work: the seller charges compassionately, and the buyer actually feels they want to take care of the business’ well-being, by adding gratuity (an expression of gratitude) or by spreading the word.
Let’s aim to give our audience that experience — “What a great deal!”
Although everyone needs to come to their own thoughtful pricing, this is my overall guidelines if you are wondering what you should be charging:
Charge Less until You Have a Waiting List.
Consider the range of prices that you'd feel OK charging for now. Then charge the less of that range. People will come to see that your service is such a great deal, if they're getting more for what they would pay for a similar service elsewhere. You'll get a lot more clients.
By having lots of clients, you'll improve your skills fast because you're doing the actual work!
Once you have a waiting list, then it makes sense to raise your rates. That may reduce your waiting list a bit. Once your waiting list grows again, raise your rate again if you'd like.
This is how you can authentically and realistically raise your rates without compromising your client load.
By the way, 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.
The bottom line — separate your service rate from your “worth”. Aim to charge from enoughness and compassion. Build a clientele and audience that feels deep gratitude for your business and offerings.
George Kao is a Marketing Coach for small business owners, especially solopreneurs such as Coaches and Mentors. He focuses on ethical & effective ways to grow one's platform and build true livelihood.
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