I started my first business in my early 20s, and I’ve heard one piece of business advice over and over again ever since:
I’ve heard this advice given in different words in books, podcasts, social posts, paid mentorship, and casual coffee chats:
- ”You charge what!? You HAVE to raise your rates”
- “People would definitely pay more for that”
- “Higher rates differentiate you from the rest of the market”
Know what? I call B.S. on this cookie-cutter advice.
I’ve taken a few rides on the entrepreneurial roller-coaster. I’ve blindly followed the advice of ‘experts’. And I’ve learned a few nuances to this particular topic as a result.
I know this advice is coming from a good place.
Coaches, consultants, and creatives chronically undervalue their work and undercharge their clients, and that’s not good for your business OR the market.
There are a lot of money mindset issues and fear when people are selling their own time and knowledge.
Those are real issues that need to be worked on.
But you should never feel shame or the need to explain yourself when you tell people your rates. And you certainly shouldn’t just raise your prices because someone told you to.
Actually, maybe (just maybe) you should be lowering them.
Let me explain…
Charging less than what something is worth is where VALUE is created.
It’s just about the only thing that makes someone think they are crazy NOT to work with you. If you get the equation right, they would be.
Believing that your service is a great deal for your clients also does wonders for your confidence and ability to sell.
Of course, charging low rates causes a different type of hesitation – that you won’t get results.
Instead, we should be looking at ways to add real value to the client (or add leverage for you).
Starting out with a price that creates massive value allows you to take the cost off the table, which allows you to get a better picture of why (or why not) people are actually hiring you.
If you are offering incredible value but people are still saying ‘no’, then you may be trying to solve the wrong problem for the wrong people in the wrong way.
Once you get your niche, offer, and positioning right, there will be two possible indicators that it’s time to raise your rates:
- You are over-booked or booked out. There is more demand than there is supply, so you increase your prices to lessen the demand.
- You see a way to provide even more value or create fewer costs for you and raise your rates (or lower your expenses creating more profit) as a result.
The takeaway? Pricing is a complex topic that can be made simpler when you follow the indicators above.
I can’t tell you what to charge, how much you need to earn, or what the market will bear.
What I CAN tell you is that raising your prices if you don’t have a consistent demand for your services is not going to solve anything.
But finding ways to widen the gap between what you charge and the results you deliver will.