Are you Undercharging for your Services?
I have a question for you (actually, it’s a question within a question!):
#1: Do you think it may be time to raise your prices?
And, #2: Considering that question, what feeling comes up as your initial gut reaction?
If you feel discomfort or other icky feelings at the mere thought of raising your prices, then today’s post is just for you.
In this article, I’m talking about all things pricing - everything from when to know if it’s time to raise your prices, why I don’t think you should follow the cliché to “charge your worth,” and how it may actually be hurting your sales to be pricing yourself too low.
Read on to discover how to be wildly confident in the value you’re providing, no matter what prices you’re quoting.
When was the last time you raised your prices?
If you’re at all similar to the many business owners who come to me for help with their sales strategy, you likely haven't raised your prices in awhile, perhaps not even for the past 7-8 years.
If that’s the case for you, let me ask you this: Are you providing the same, if not better, service that you were providing 7+ years ago? Is this same service one that you can now provide more quickly, efficiently, and expertly than you did 7+ years ago?
If you’re nodding your head along as you read, I’m not surprised. This growth in skill + knowledge is exactly what happens over time. However, if you’re still charging the same rate that you were when you started, you may very well be undercharging for your services.
The stories that get in the way of us raising our prices
As entrepreneurs, personal brand businesses, and service based providers, we often feel like the services we’re providing are a direct reflection of us. And that perception can directly affect our confidence when it comes to pricing our services.
Have you ever felt any of these things:
If I raise my price, no one will buy.
I can't raise my prices… I’m not sure my product or service is worth it.
I struggle to sell things that are really high prices. High ticket offers aren’t my thing.
But all of the above are simply stories you’re telling yourself - limiting beliefs that are preventing you from raising your prices.
Prices aren’t about YOUR worth, they’re about your customer’s perceived value.
We’ve all heard the phrase, “Charge your worth.” I believe this has become such a cliched piece of business advice, both overdone and ridiculous.
Fact: Your self worth does not equate to your offer. The value of your offer lies in the outcome that you are providing to your client. You aren’t charging based on what you think you are worth (is there really a price for that?!). You are charging based on the value that your customer perceives.
Price is supported by your customer’s perceived value. As long as your customer perceives the value to be equal or greater than the price, you can put any price tag on your offer that you want.
It all comes down to understanding your client’s pain/problem (or whatever it is that you're solving), understanding the value that you can bring to them, communicating that value, and transferring that message in a way that feels sincere, gives them hope, and shows them that you’ve got this.
Hone in on your customer’s outcome
What your customer perceives to be valuable is really important. One of the ways I help my mastermind students do this is to have them really hone in on what the customer’s desired outcome is.
What does your customer hope to attain in working with you, and how valuable is that to them?
Talk to your customers, interview your potential and existing clients, and really hone in on what they perceive as the value of the solution you’re providing to them. This is how you can then shape your new pricing structure and begin to charge rates that make sense.
Undercharging is a costly mistake
I see so many people in the market undercharging because they feel like it's going to be easier to sell their product or service if they offer it at a less expensive price. But the truth is, when you do that, your customer may decide unconsciously that it's not as valuable because it seems too cheap. They think, It must be too good to be true.
This isn’t just a newbie mistake, either. I encounter this at every stage of the entrepreneurial game. In an effort to hit income goals, many business owners become afraid to increase the amount that they charge. But this can really cost you.
Here’s why: When you undercharge, you feel like you have to do it all because you can't afford to hire other people. You don't have enough cash to drive your growth because you can't invest in the right tools and support systems. This creates a messy cycle of you working yourself to burnout and unable to get to the next income level because you’re not willing to charge higher rates.
If one of your core values is providing exceptional value and going above and beyond to serve your clients, then you need to ask yourself: How can you do that in a market where everything is more expensive than in previous years, except for your services?
If the cost of everything is going up around you, except for your service, then you have increased costs, lower potential for profit, and lower potential to break even. In that situation, how can you possibly serve at your fullest potential? The answer is, you likely can't.
Raising your prices = serving your clients at a different capacity
Imagine this: If you double your prices, even if only half the clients you have buy-in, guess what? You have half the amount of work at the same rates.
And just like that, you’re able to serve your clients - old + new - in a different capacity.
Raising your prices is all about meeting your clients where they are right now and putting together an offer for them that allows you to serve them at your fullest potential and gets them the maximum amount of outcome, aka value.
How to gain the confidence needed to raise your rates
In order to raise your prices to charge the value that you are providing, you need to get comfortable having these money conversations. All of my programs are designed to help you feel empowered to discuss rates and sell them to your customers.
I love high ticket sales. I ask for sales that are 10, 20, 50, and 100 thousand dollars and up. And I get them because I feel comfortable having the conversation, and knowing that whatever price I'm charging, my customers are getting a great deal. My clients are getting so much value that it's going to help them tenfold. And I am confident in that every single time. And I want you to be as well.
If you still don’t feel confident enough to raise your prices, this is something we can work through together. Maybe the mastermind's a good fit for you, or maybe coaching one on one is best for you. We will figure it out together, because you deserve to have a business that supports your financial and time-freedom goals. And the only way to do that is to start by offering amazing value to your clients and charging the right price for it.
DM me on Instagram if you’d like to chat more about working together. I’m here to support you!