A Little Secret About Pricing
As we’re racing toward the end of the year, thinking about how it went and planning for next year while still pushing toward 2017 goals, I keep thinking about a story one of my clients told me a few weeks ago.
We were talking about her financials through September, and reflecting on the year and how it compared to the year before. While on the face of things, it looked like her business hadn’t grown – her revenue was about the same, expenses, too – there was one really important difference.
It took her 60 client sessions to hit her last year total, and only 30 to hit the same number this year. Let me say that another way:
She earned the same amount but did only half as much work.
All because she adjusted her pricing at the start of this year. Sure, she was nervous about it. Who isn’t in that situation?
But think about it: adjusting her pricing also meant less running around, less juggling and context switching, and more time to think about the direction her business was going in. And time to invest in self-care and in her family and community.
All because her Hustle-to-Chill Ratio was dialed in just right.
Her annual revenue was the same, but the experience of her year was dramatically better. How she felt? So much more spacious. So much more deliberate. So much more in charge.
Her new prices also allowed her to do the thing that pricing is really, secretly all about:
This year she served the right people.
The real secret about pricing? It’s a tool to align value on both sides of the equation, yours and the customer’s, so that you meet at equilibrium, that sweet spot where the value of what you’re offering lines up perfectly with the value that the client places on the service they’re seeking. It’s that Goldylocks spot — not too low, not too high, but juuuuuust right.
Sometimes to get there though, you have to get out of your own way first. For a lot of us, pricing brings up all kinds of hidden issues about self-worth, about confidence, about the imposter syndrome that we’re all saddled with.
You have to get out of your own way.
Pricing is a way of setting a boundary that clearly enunciates My work is for these people who want X outcomes and are willing to pay Y, and not for these others who don’t and are not. Sure, a low price means you’ll always be busy, probably too busy, working but not necessarily doing the right work for you. The right price buys you space to really consider what you’re doing, to really drive your business and life to the destination of your choosing.
The right price is a 100% clear expression of your business strategy.
Sure, it can be scary work, but it may be the most important tweak you can make to your business in the coming year to deliver you the life you really want.
Who among us wouldn’t like to earn the same with less effort, running around, juggling? As you’re plotting and scheming your new year, take a look at HOW you earned in this year and think about how you could refine your business model, to serve the right clients at the right price.