How To Price Your Products And Services
9th Apr 21
Do you keep your prices low because you’re scared nobody will pay you if you charge more? Well, stop that right now, and get real about why you need to start pricing realistically.
There are lots of reasons why you, and plenty of others before you, quote low. Including the fact that you’re awesome at wat you do. Recognising your REAL value (and yes, that means you) can often result in more work, not less. Trust us on this one, we’ve been there too.
So, why would you quote so low? Here are a few reasons we come across all the time that we have great satisfaction in debunking right here.
Read on and remember…
1. “I have to be cheaper than the competition to succeed”
No, you absolutely don’t. Not one bit. Think about the shops on the high street; Poundland may be doing very well, but M&S and Waitrose aren’t exactly doing badly either. They just attract a different clientele and the more upmarket shops are perceived as better quality. Do you want to be thought of as discounter or luxury?
2. “It’s just my part-time/hobby biz”
So what? That doesn’t take away its value to other people. It doesn’t matter how much time you spend on your wellbeing business, you’re still giving people a fantastic, personal service during that time. Don’t be afraid to charge the right rates for it.
3. “I’m here to help people”
So are doctors, dentists and lawyers, and they aren’t cheap either! You aren’t a charity, you’re a business and you need to make a profit to be able to live – and carry on doing what you do. You’re really doing people a favour by charging enough to make a profit, and you deserve it, too.
If you think that the only reason people pay for what you do is that it’s cheap, you’re not thinking about your value, just your price, and my lovely, you need to get right out of that mindset straight away.
Steer clear of discount sites – lots of therapists and wellbeing businesses use deal sites to up their numbers but you know what – it makes you look desperate for business. You get what you pay for, and anything that’s on offer so cheaply is automatically perceived as a bit naff. Wouldn’t you ask yourself why something is being practically given away?
Also – what if you DO get shed-loads of clients all booking with your super cheap online deal? Argh! Panic! You could end up fully booked – but with people paying half your usual rates. You’ll be working twice as hard to get the same amount of money. All for people who aren’t likely to come back unless there’s another deal on.
Choose your price
It seems like a minefield – and it can be. So, what do you need to think about when you’re setting your prices?
Think about the real value of what you’re offering. You’re giving people solutions to their real life, sometimes complex problems. Holistic businesses don’t do one size fits all – we know that, so look a bit deeper.
What problems do you help solve for your clients, and how much do you think that help is worth? For example – reflexology, acupuncture and nutrition can all help a woman with fertility problems get pregnant. That’s PRICELESS and we bet you charge way less than IVF clinics? Honestly, don’t undersell your own value. It’s a cliché but you’re WORTH it.
Have a sneaky look at what your competitors are charging too – you’ll get an idea about what people are happy to pay in your area. If you’re in an affluent area, people will have more disposable income and be happy to pay you more than if you were in an area that’s less well-off. And if you set your value high, you’ll appeal to people looking for better quality over cheaper prices.
Costs and profit margins
Know your costs, and make sure that you cover them, and your time, with enough left over for a profit.
This is going to involve doing a bit of maths, but we promise it’ll be worth it! A general rule of thumb is that when you’re pricing a physical product, the wholesale price – (labour + materials) x 2 = the retail price.
When you’re pricing services, don’t forget that your time is worth something too, and you’re not just charging for materials and overheads. As well as what you have to pay out for your products, bills and costs, look at the time you spend outside of client appointments.
How long do you spend looking at clients’ notes, getting a room ready, creating a product to sell or coming up with a programme? You are a professional, charge a decent hourly rate for your time before and after as well as during an session.
How to increase your prices
Small businesses are terrified of putting their prices up, and wellbeing businesses are especially guilty of this – stop it now! Think of it like this – your bills are going up, you need to live too. Without enough money coming in, you can’t run your business, and your clients won’t get your help. You’re actually doing them a favour by charging more…
You can do it less painfully if you introduce new services and prices slowly. Don’t just hit clients with a price hike across the board and make them run off to Groupon, add a few extra packages and test the market before putting a few prices up at a time.
Be clever about it – when you’re putting the price of a one-hour, one-off massage up, promote a discount for booking five sessions and paying up-front. Clever discounting isn’t the same as being cheap.
Give people options. Don’t confuse people with loads of them but offer different levels or packages where it fits. Wellness coaches could offer basic, intermediate and top end coaching packages; and don’t panic that everyone will go for basic because people rarely go for the cheapest option. Most will go for the top if they can afford it – why not? Others will go for the middle option. Nobody wants to be thought of as a cheapskate. It’s Poundland -vs- Waitrose again.
The main thing is that you need to recognise your TRUE value when you’re pricing up services. Don’t do yourself out of clients because you’re afraid you are too expensive – price it right and they will come…