Gather round, kids! It’s story time.
I’d like to tell the story of my client whom I will call Hillary. She’s an acting coach who’s built a strong reputation for herself teaching small group classes and working with private clients. Hillary is a busy bee to say the least. When we started working together, she had next to no time for anything other than coaching. She said she felt a little bit like a chicken without a head.
Maybe you can relate.
The good news is that there’s a quick fix for Hillary’s situation. It’s called raising your prices.
You know it’s time to raise your prices when:
- Your practice is full or you have a waiting list.
- You have no time for yourself because you’re so swamped with work.
- More than 75% of prospects sign up for your services. If that many people easily say yes, you’re probably not charging enough.
When I asked Hillary if any of these indicators applied to her business, the answer was, “Yes. Yes. And yes.”
Though it was crystal clear to me that Hillary needed to raise her prices right away, she resisted the idea wholeheartedly. She explained to me that actors can’t afford to pay more for coaching and if she charged more she might price herself out of the marketplace.
This is probably one of the most common fears I see with the coaches I mentor. Believe me, I get it.
The fear of no clients and no income is a strong one and it often leads you to undercharge in order to feel safe.
When I first started my own coaching practice, I had a similar experience to Hillary’s. My rates were $125/session, and I was busy. I had 30 private clients, and I would literally run from one appointment to the next with a quick 5-minute break in between.
By the end of the week I was exhausted. I found that I started building up a little bit of resentment, not toward my clients, but toward my situation. I caught myself thinking, “I shouldn’t have to work this hard.”
I discovered that I was undercharging. Now, this is different from the hype we hear about “charging your worth,” and I’m not recommending that you charge a rate you can’t stand behind because you must be able to communicate your rates with confidence.
This might mean that you raise your prices incrementally, but it’s important to make sure that they reflect the style of business that you want to create.
Your service is not for everyone. It’s for a chosen few.
In Hillary’s case, the experience she strived to create for her students was a highly personal one, meaning that she ideally only wanted 8-10 students at a time.
So, I explained this to her. I said, “You know, you don’t want every actor in the city of New York to take your class. In reality, the way your class is designed, you only want about 8-10 students. So, in order to provide an extraordinary experience for the right clients, you must price your program accordingly. What price can only 10 actors afford?”
It took Hillary a while to wrap her head around this approach, but she was sure happy when she did.
Long story short, Hillary ended up tripling her rates. She sent out just one email promoting her new offering and literally filled her program within minutes.
As a result, Hillary started working half the amount of time and increased her income by $50,000. So, here’s the moral of the story: Don’t be afraid to find your chosen few!
How do you then decide your price points?
Step #1: Get a sense of the marketplace. What are similar people charging for similar offerings?
Step #2: Identify how your offering is different or better, and adjust the price accordingly.
Step #3: Multiply that price by 2 and spend the next week and a half saying that number out loud to yourself. So, if you work your rates out to be $300 per hour, spend the next week and a half saying to yourself, “I charge $600 per hour.”
At the end of that week and a half, you’ll probably find that $300 rolls off your tongue and feels like a steal!
Step #4: Test the marketplace. Present an offering at that price and see how much interest it generates. Remember, your prices are never set in stone. You can always change them in the blink of an eye.
Step #5: When all else fails, try a little voodoo. I love my numbers to add up to 9 because it is a powerful number for abundance. Sometimes I literally just gut check my prices. I check in and see what feels right, and find out if those numbers add up to 9. It’s very unscientific, but for me, it works.
Now, it’s time to put this into action. This week, do a price assessment. Follow these five steps and see how it feels.
So what do you think? Is it time to raise your rates? Let me know below…