When it comes to your pricing strategy for business, my coach always told me to never give a discount. But I really didn’t understand that until I had a lot more experience offering discounts and getting burned in the process. Let me share what I’ve learned that can help you secure your pricing.
As a struggling new business owner, I was under the naive assumption that most people ‘shopped price’, and therefore – growing up that way, considered lower prices more approachable/affordable.
Over time, as my business has grown (along with my confidence), I’ve evolved in the price/value arena – in many areas, but have shifted my perspective regarding money, profit, investment and value significantly.
Why You Should Delete ‘Discounts’
Pricing strategy is just that… a strategy! Discounts are on the surface – quick, easy ways to encourage someone to say yes to your product or service. Where it becomes difficult to navigate – is when you want to recover your discounted offer and charge more, or even – what you’re worth!
Inevitably when you operate from a discount mindset for your goods or services, you psychologically set your price/value proposition for a potential buyer. When you drop the price lower, it’s really difficult to shift the perspective for your clients when it’s time to raise your rates. Therefore, it’s important for you to explore different pricing strategies, and layer your service and product offers to engage and retain your ideal clients.
Discounts and Client Retention
I really like the Disney model – the more you play, the less you pay… and that is how I’ve approached creating my own value/price packages. My most rich package which includes everything I offer, high access, VIP time, my entire curriculum, back-stage scheduling access for just in time calls, access to my events, and many other fringe benefits is only twice what my medium-level group package investment is.
I’ve also consistently listened to my clients for feedback and reward them for staying with me by offering maintenance options at a lower cost to stay. Why do I do this? Well, I know that especially with coaching, my clients attain dramatic results at certain milestones: 6 months, 12 months, 18 months… – but, they don’t know that. When they start with a coach, most people are looking to get everything they consider ‘broken’ – fixed… What they don’t realize is how much time that will take, nor do they understand what is really wrong.
There are other retention strategies as well – And, when you attempt to retain clients at a ‘normal price’ as opposed to the initial investment they paid, they may find it really difficult when they see the price jump. In fact, it could serve to actually hurt your retention, and (unless you’re grandfathering existing clients in), it’s very difficult to sustain those clients who’ve paid a lower price for your services to begin with, then have to cough-up a higher amount just to continue to work with you.
Offer a ‘Trial’ or ‘Taste’
When you’re considering your pricing, one great way to convert people to full-fledged clients is to offer them a lower cost option to try you out. I love starting with a hearty brainstorming package. Beginning with a brainstorming session helps you get to know your clients and helps you create a vision of whether a longer term commitment to this client is a good match. I’ve created a few ways to do this for my clients. In addition to some programs like the Planapaloozah, or someone can invest in either a short term, roll-up-our sleeves Laser Coaching Package or VIP Strategy Session for starters. These sessions are lower opt ins and OFTEN SOLVE many pressing client issues. And, once they’ve worked with you – you can then figure out a way to creatively match up your service offers so clients gain the maximum value for their investment.
Create Your Top Offer
When creating a value-based pricing strategy, it’s a great practice to begin by inventorying everything you offer. When you define all the key features and benefits of your richest, most robust package you’re able to offer to clients you begin with a ‘full offer.’. Then, you can work backward to create a pricing strategy that is attractive at different levels. Whatever you do, whatever you offer, you can pull together a comprehensive pricing strategy that brings it all together and price it at the top of your offers.
How many of these highest end types of clients/products will you be able to accommodate? Price them accordingly to what you’d consider a full practice. (Remember rates and packages vary, so wherever you land, you land… it’s up to you.) One person’s full package may be several hundred dollars, where another’s may be tens of thousands. Everything is relative and dependent upon your ideal client, what they need, and what you offer.
To Value-Equalize, Remove Options
Once you’ve completed your full, most high-end offer, start removing pieces, access and layers to get to your medium-range package(s). This is what is meant by a pricing strategy. Depending on what you have to offer, will depend on this, and then price it accordingly. You may remove things like 1-1 access, responsiveness, length of time and other qualifiers that make the offer less valuable.
Once you’ve done that job, now you can create your lowest end offer – and price it accordingly.
Then, instead of offering discounts going forward, consider creatively combining what you do and offer a bonus, promo, bundle, pack, or a limited time-special to encourage people to say yes!
This will help you create sustainable packages, and hold your price/value steady even during hard times.
Remember, sales is an emotional process first, then a logical one, so be sure your packaging makes ‘sense’ and feels ‘fair’ at each level. If in doubt, test them out on potential clients.
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Your Sanity Assignment
Review all of your rates and pricing strategy and current offers. Determine what needs some attention and shifts (if any). Carve out time to implement the new pricing by putting it on your site first, then making offers to new clients as they arrive at your doorstep. For more information on pricing strategies listen to this podcast! And here are a couple additional articles: How To Raise Rates With Clients To Increase Profit, How To Charge What You’re Worth, 6 Ways To Add Value & Raise Your Rates.
If you’re struggling with pricing and packaging your services, I can help. I coach entrepreneurs in the late start-up through growth stages of business. Together we help you uncover what’s stopping your business development and create strategies to help you become more sustainable and profitable. If you’d like to discuss how I can help you click here, answer a couple of questions, and let’s connect LIVE for a 1-1 Discovery Call.