How Do I Charge What I’m Really Worth?

Price TagOne of the questions which crops up almost every day with my clients is “how do I charge what I’m really worth?” Sometimes a variant is about charging what you need in order to make a living and be able to afford to give up the day job.

This question is about self-esteem, and I can share with clients my experiences going back over decades as I’ve observed small businesses start out, under-charge and then eventually get to grips with charging appropriately – or die!

How does this happen? What changes?

Well, it depends where you are starting from. If you have always been underpaid and/or a bit skint, certain prices by the hour, say, may seem expensive to you but cheap to others, some of whom will be  your paying clients and customers. This is where you must identify a target market who can easily afford you and who prioritises what you are selling. Thus someone in pain will pay whatever you charge if you make it go away. They will also love you forever, keep coming back and tell all their friends.

Someone who has been through these self-employed pricing challenges themselves and understands the value of luxurious 1-2-1 time with you and how precious it is will pay you fairly for your time and be happy to do that. Someone who knows how to be a good client. Do you know how to be a good and generous client? Go first, it’s always good to be a vibrational match for what you want to attract into your own life and business.

Where the self-esteem issue comes in is when we confuse our self-worth with the price of our product or service. This does change over time and what causes it to change is the world giving you feedback that they love what you are doing. As the evidence begins to build up that you do or sell something good which people want and enjoy and benefit from, you will feel better about yourself and start to make the distinction that what you sell is not who you are.

I have told the story before about a chef I worked with during the 1990s. Now he’s on the telly and he has lots of Michelin stars and he’s written books and he’s a celebrity and the feedback from the world enables him to charge what he’s really worth. When he started out he was charging £28 for a meal which today might easily cost you upwards of £195. What changed? His view of the world and himself, based on the feedback he received from happy diners and critics. Positive strokes.

What else changes? The feeling you get when you work far too long for far too little reward. If you work for yourself then this will cause you to crank up your pricing eventually. Start low by all means but just know that makes it harder when you want to hike your prices.

A point to remember about pricing ourselves is that whilst some love a bargain, many love more expensive and luxury items. In the world in which we live highly priced can be highly prized. We like expensive. So check out your own spending habits even if – especially if – you are the proverbial church mouse. What do you choose to spend your money on? Is it scientific or random? Do you always find the money for at least one little luxury you wouldn’t be without? So will your clients. And that could be you and your service or product.

And finally, it is about value, not price. And the value can be demonstrated by you but ultimately will be decided upon by the client/customer. If you sell yourself too cheaply you can end up resentful of your clients, unable to make a decent living and perceived – erroneously, perhaps – as less valuable than someone else who does know how to charge what they are worth.

You can charge whatever you want. I’ve charged more than I am right now. The price I charge dictates the client I want to work with and my focus in 2013 is on those who might think they cannot afford a business adviser, coach and mentor. I want to prove them wrong. In other years, I’ve upped my prices to work with those who know its an investment and value themselves enough to make that investment. I’ve charged three times what I charge now and I’ve charged ten times what I charge now. It’s my choice and my price can dictate my type of client.

You decide what you want. Jessie J will tell you it’s not about the price tag. And if it’s not about the price tag, what is it about for you? A little bit of excavation work will reveal all. Its your stuff about money and your hallucinations about your customer’s preparedness to pay for the solutions you provide.

Start by setting the prices you want to charge; you can always discount if you wish, offer a BOGOF perhaps, experiment with different ways to get people to enjoy shopping with you, making it easy and fun. Discounts might include summer sales, birthday gifts, Christmas deals and so on. Many people I love give away their books on Kindle for a few days at a time. There’s method in their madness. We love them for it, give testimonials and strengthen our loyal connections to them and pass the word to our friends. But they can’t give it away 365.

Recently I asked people to buy a product of mine for a donation. Suffice to say they always pay more than you think they will. Try it.

Go on, I dare you… put up your prices, charge what you are really worth and prove yourself wrong! What better way to be wrong could there be?

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3 Responses to “How Do I Charge What I’m Really Worth?”

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  1. Anne says:

    hi Judith, yes, that’s very useful indeed. I’m looking to move into a new area that I can see will be of huge worth to clients in terms of the amount of money they could save and yes, I think for me in some ways it’s about being bold and also seeing how much money do I want to make to have the sort of lifestyle I want and the n take it from there. It’s true, if someone wants to work with someone, they’ll find the money. Thanks for that.

  2. As you know, Anne, I own a cleaning business and you are right, in that sector, you have to be price competitive. I was speaking to solopreneurs really and yes we do lose our first clients who we took on too cheaply as we re-position ourselves to charge what we are really worth. We always need clients who can afford us. I don’t think they need to pay for something extra. I think we just need to charge what we are worth and not undercharge or be scarce or skint in our pricing. In short, it is mainly (for my clients) about us, the small business owner/solopreneur and not about them (their clients).

    This is the second time today I’ve told this story. I helped a friend put up his prices a few years ago. He phoned one of his clients and said he was going to do that and the client said let me call you back later when I’ve thought about it. My pal was worried he was going to lose the client as he increased his daily rate from something like £150 or £200 to £250. His client duly phoned back later and said he would be increasing what he paid to £850 a day as that’s what my pal’s services were worth to him. So often, this is about value not price. And that wouldn’t work in cleaning where you have to be better or different or more reliable or more professional or nicer in the way you treat people or some other differentiator. But when it comes to what I charge as a coach or you as an excel expert we can charge as much or as little as we like and, equally, ask for as much as we dare. People like expensive things and if you value yourself, it is my experience that clients will value you too.

    I have loads of other stories like this so was speaking from my own experience too. Back in the day when I was an accountant and my practice got full up, people would phone asking me what I charged and I would double and triple the rate, just for fun, and they still wanted to sign up. Clients! You couldn’t make it up!!

    Hope useful?

    J

  3. Anne says:

    hi Judith, would be interested in your take on the following. A few years ago, I did increase my prices and I lost customers. Yes, I gained other ones willing to pay but I did lose customers. Also I’m not sure if this price increase approach would work for every sector – and I also think that while self-esteem is part of it, you also need to have something hat people are willing to pay extra for. And maybe there are some sectors where this wouldn’t apply..e.g. if I’m in the house cleaning business and I get can get someone up the road to do (what looks like the same job) for half the price…well I’m going to go with them. Would be interested to get your take on this..

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