Friday, November 21, 2014

3 steps to pricing your program so it's easy for you to sell

There's a lot of talk in the coaching and consulting communities to step out of the dollar-per-hour model and step into one of charging for value in 'high-end' packages.

Here is what I've seen happen as business owner adopt this thinking:

  • Hours get bundled as a package deal (which is the same as dollar per hour, just repackaged)
  • A price is created that seems ideal or in line with what others are charging, but doesn't it quite feel right or you have no way of knowing how your market will respond to it, or 
  • It get's lightly promoted, then someone comments the prices are too high, and the old model resumes.

Raising your rates for a high-end package is about stepping into a value based model.  But how do you really quantify that so that you know you're charging the right price?

In today's #freemail article I'll be sharing with you how can quantify your value so you can stop charging by the hour and stop thinking that the only alternative is to make up pie in the sky numbers that make you uncomfortable to say!

Ask any coach, consultant or service based practitioner about the value of their service and they will likely say 'priceless!'  And that's not to dodge the question, it's because it's as practical an answer as one can say.

Here are few scenarios to illustrate what I mean:

  • If you're working with a healer who is able to alleviate your chronic and debilitating back pain, what is it worth to you to be able to move and bend and lift things that you may not have been able to do for years?
  • If you're working with a physical trainer who is not only taking you from couch to 5K, but it incorporating your diet and family, what's it worth to you to have a healthier family for life?
  • If you're working with a business consultant who is able to identify a missed or overlooked opportunity, what is it worth to you to have that business growth that you would have been searching for outside of your company?

My point is, value in service work is a relative thing.  But in business, it does need to be quantified so that you exchange the energy + currency of commitment...aka money.

Where does this number come from?

If you're pricing by the hour or even in a 'high-end' package, you're pricing based on your economic needs and market conditions.

Nothing about that has your client in mind.
Nothing about that line of thinking has the result of your client in mind.

Here are 3 steps to pricing your program so it feels authentic to you and you're proud to talk about it:

1) Knowing what problem you solve...

When you're absolutely clear on what problem you solve, then you absolutely know how to solve it.  Putting together a program, package or offering from this perspective is much easier than looking at your tool box and wondering how you can bundle things together to be marketable.

2) Knowing who you solve that problem for...

Now that you know what problem you are uniquely brilliant and gifted at solving, identifying who has this problem is the next step.  This will enable you to obviously market to them, but more importantly, speak the language of their pain and know before you go to market what urgency it is to them to have this solved.

3) Knowing what the price of pain is to them...

You know the problem you solve + for whom, which means you also know their sense of urgency and commitment to getting it solved.  The price of pain is the number that will move them by sheer force of paying it from where the are to where they want to be.  It's the number that is too big for them to fail at this.
I recently was having a conversation with coach who shared this life changing nugget o brilliance with me.  She was running a low end, low maintenance program that was generating a few thousand a month and shared with me why she just pulled the plug on it.   
She said she was creating a space for people who want-to-want-to have this problem solved.  They didn't really want to change anything.  They just wanted to play.  
She is results driven and this community would never achieve results because they weren't fully committed to this higher vision and version of themselves.  She knew that by keeping this community alive, she was giving them a permission slip to play it small and THAT was not ok with her!
The price of pain is the dollar amount that will be painful enough to the client that drives them unapologetically towards the result you can facilitate.  

It eliminates those who want-to-want-it, and speaks loudly and clearly to those who want it.

What is the number that will make their palms sweat, stomach turn, and lose sleep already obsessing over the work that you'll be doing together because they want a head start so they squeak every dime out of this program?!

THAT is the number that you charge.

Now it's YOUR TURN! 

The best learning comes from experiences. So please, take a moment and share in comments below, what you think and how this has impacted you!

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In the meantime, I look forward to seeing in the comments how you will maximize your value with what you learned in this #freemail article!

Till next time!

Liz :)

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1 comment:

  1. Liz,

    Great post. I recently listened to a $100 MBA podcast regarding pricing your service. The strategy talks about knowing your client and understanding the value you can provide them. You price to solve the problem not pricing for an hour.

    Wishing you productivity and prosperity,