Pricing Stress. It's one a common concern of Solopreneurs.
- We don't want to price ourselves too high or too low.
- We get caught up in small details like should our prices end in a seven or a nine?
- We wonder if we should publish our prices, or keep them out of sight.
Personally, I've been dealing with pricing stress for years. It started when I rebranded from Work at Home Moms Talk Radio to Solo Smarts. People I have a lot of respect for told me it was time I raised prices and I agree with them. The angst came later, after I'd increased my rates – only to be told time and again, they were still too low.
As a business coach, I had to get past thinking about hours in a day and embrace the idea that my value to clients isn't measured that way. When you offer information and coaching, you're selling experience, wisdom and hard lessons learned – not time on a clock. A darned hard message for me to absorb, but one I finally got.
I'm not alone in facing pricing issues. I asked smart solopreneurs I know to share some of their pricing experiences.
Here Are Some Of Their Responses
Dennis Becker of Earn 1K a Day has been watching launches for a long time.
When I think about raising prices, I'm concerned two different ways… One, will sales suddenly screech to a halt, and Two, if I don't announce an increase, will anyone care enough to even look at the offer to begin with?
Increasingly, buyers are so inundated with opportunities for the latest greatest thing since sliced bread, that without some sense of urgency they focus on something else. The sense of urgency might be either losing out on an introductory price, losing out on a short term bonus, or losing out entirely because the offer will go away.
So I tend to offer introductory prices as a standard way to give action takers a way to save money, spread the word, and give affiliates a reason to refer their followers. I generally don't raise prices drastically, and not without a “last chance” announcement, and generally I think the value at the regular (higher) price is excellent anyway, but I just feel that without the promise of a price increase, an offer just isn't given any serious attention.
My greatest struggles, and greatest successes, have been when raising the monthly price for my membership site. It's gone from $14.95 to the current $77 over the course of several increases over several years, and each time it took a lot of soul-searching.
I like to raise value before raising prices on recurring billing, so increasing the value significantly and announcing the upcoming price increase, has typically generated several dozen or hundreds of new monthly members that wanted in before the increase.
Dennis brings up the ‘increasing price' strategy that most of us use when we launch a product. It does create that urgency that gets action – and gives us and our affiliates a good reason to remind people about the new product.
Lynette Chandler of Plugin Mill has recently tackled a price increase:
I raised my prices dramatically from $37 to $97 for one time purchases and $17 to $57 a month for the club. Even though it's been 4 months, I hesitate to call it a success because it is ‘too early' in my books. However, all indications point to this being a good choice because people are still buying and joining, and at a rate that isn't much different from before.
When I asked how she recommends setting prices:
This is always tough for me. People say look to your competitors but it's a problem when competitors sell at rock bottom prices on one end of the spectrum and others command premium. It tells me they cater to vastly different sub-groups within the market. It also tells me that while people always love a bargain, if you put out a product they really need and want, they'll pay for it.
With that, I say, keep the two spectrums in mind, but also look beyond that. Figure out what price would you comfortably sell without a) feeling like you're giving the product away and b) give you enough profits to be able to not just pay yourself and the bills but room to outsource/invest/run a sale without again feeling like you're having to eat the discount.
Great points – especially about having room to run a sale if you want to.
Connie Ragen Green of Huge Profits Tiny List remembers when she first got started, she base her prices on coming in lower than the other guys.
The idea of pricing my products and services has always given me pause, and I believe this is due to it being so very personal. During my first couple of years online I studied the pricing of coaching, information products, courses, and more from people who had already been online for many years and were, at least to my thinking, far more credible than I was at that time. I made sure to price my offerings well below what they were asking, in order to be consistent with what the perceived value was for similar products and services. Within a year I threw that thinking out the window and began charging as much as or more than others were because I believed in myself and knew that I would over deliver.
In 2009 I began a Platinum Mastermind group in order to work closely with and teach a few people who had asked to be a part of a group with me. When I thought about how much my time was worth I gave the program a price that made me very uncomfortable. I felt that this was a good sign, and every person I invited joined the program without hesitation and without mentioning the cost to me. Some of those people are still my top clients, and I have found that other people value us as we value ourselves. My goal was to rise to the occasion and make sure they received even more than they hoped to from our connection.
Cindy Bidar of Digital Business Managers recalls an important client pricing conversation:
About a year ago, my coach (the amazing Kelly McCausey) challenged me to raise my rates with my biggest client. I'd been working with him for about 2 years, making far less per hour than I was charging others, but it was steady work and a decent amount of money every month. I knew I was worth more, though, so I rehearsed a speech in my head in which I was going to ask for a $10 per hour raise, then let him negotiate that down to a $5 per hour raise. I barely had the $10 figure out of my mouth and he said, “Done. Starting immediately.”
I remember having this conversation with Cindy. Virtual Assistants and other service providers should take courage from her experience. Never be afraid to increase your prices as your experience grows. Your clients are benefiting from your time in greater amounts – so should you!
Sue Painter of Confident Marketer believes in tackling fear of a price increase head on:
I teach my clients some exercises about being fearless about pricing. Our exercises are varied depending on the person but we usually start by within 48 hours they do what is necessary to immediately raise prices across the board by 10%. Just do that right away. And expect to lose some but gain more. We start with that and then the messaging that goes with it. It's fun to face down that fear and see them on the other side, like “Oh WOW!”
Nicole Dean of What Would Awesome You Do puts market loyalty in high priority.
I have a hard time not wanting to out-price those that have been loyal from the start.
It's hard too, to decide what to offer unless you have the entire funnel at a glance so you know if there is monetization opportunity after that sale. If there's a monetized backend, then the front end product isn't nearly as important. Like many of you, I've even given away 100% commission on the front end, because I wanted to grow my lists for backend stuff.
I love that Nicole points out something so important about our product prices. The selling price of a product is NOT the only profit point. Nicole is well known for building in a ‘sexy back end' so that she can earn in a variety of ways from every customer. Her smart development of a various income streams is one of the reasons she's been able to keep her product prices so affordable.
In Some Situations You NEED A Price Increase To Reach The Right Clients
Marc Mawhinney of Natural Born Coaches looks around his market for the sweet spot:
I research the competition as a guide but I generally try to set them as high as possible. (Until I find my “sweet spot” – the highest I can go while still feeling comfortable!)
I doubled the pricing for one of my programs at the start of 2015 (from $497 to $997) and saw no drop in enrollment – I actually got more clients (and less headaches!)
Nicole Dean shares:
We've rebranded at CoachGlue.com and raised our prices at the same time. People love our stuff and are buying like crazy and we feel a little silly that we didn't do it sooner.
At Beachpreneurs, we've been raising rates every time we host our mastermind retreat. We know the value of our time and the results our attendees get, so it was something we needed to do. It hasn't affected our event negatively, and, in fact, it seems to be helping us to get exactly the right people that we want for this high-level event.
Jeanne Kolenda of The Business Force has learned a lesson about pricing too low:
When I first got into local offline marketing, I felt that because I was in “small town USA,” people would not either be willing to, or be able to pay what I knew others in larger markets were paying. Therefore, I under-priced my services. I was also newbie, and wasn't sure about my ability to fulfill. However, I discovered that by not charging enough, I didn't have the budget to do for my clients what needed to be done, and it was a cycle of doom. This year, I raised all prices on new clients, left some alone who were paying in the mid-range, and told the really low paying clients I could no longer service them at that price. I lost some, but have gained many more at the higher prices.
How to Price? I look at the cost of fulfillment and triple it. Some will, some won't, so what…who's next?!!!!?
Sometimes NOT Going For A Price Increase Is What Feels Right
Jessica Larrew of The Selling Family recently shared about a pricing decision she had to work through.
When we started working on the Amazon Boot Camp version 2.0 many people told us that we should raise the price. At first, we bought into the idea and agreed that if we had the most current information available, were successful sellers ourselves and could teach others a business that could potentially make thousands of dollars a month, we should be charging a premium price.
But when it came time to implement, something about it made Jessica feel very unsettled. She asked herself…
– am I excluding the very people I wanted to help in the first place? Am I willing to shut out people whose lives could be completely changed by this opportunity, over a couple hundred dollars?
Even though she knew she CAN charge more and would likely have no trouble commanding a higher price, she decided to hold the price steady AND share why in this blog post.
I appreciate the time every one of these friends took to share with us. You can see that pricing stress impacts everyone, at all levels of experience and financial success. I hope this is encouraging – and empowering!
How About You?
What sort of pricing concerns do you deal with?
Share your question in the comment area below and I'll do my best to help – or invite one of these smart folks over to give their input.