A while back I received an email from a woman saying that a program I was offering with a colleague was “WAY TOO EXPENSIVE” (yes, she used capital letters) and that she couldn’t “afford it”. She also referred to the program as a “seminar” as opposed to a “coaching program” so perhaps her misunderstanding of what the program was influenced her perception of what it was worth. I really don’t know.
If you clearly articulate the value of what you are offering based on the price you are asking, people will be much more inclined to purchase your services and products –*if* it is something they see as being valuable to them. This is one reason why copywriting is so important and why I often refer to it as being “magical”. Of course, copywriting is not really magical as it’s based on science, but it certainly feels like magic when it works to bring in the “right” customers and clients.
Perhaps the woman who emailed me perceived our social media coaching program to be “too expensive” because she misunderstood it to be a seminar. Or, maybe we could have done more to articulate the value of a coaching program as opposed to a seminar in the sales copy. Of course, it may also be that the price was higher than she was willing to pay for any offering related to social media, which brings me to my next point.
2. How your customers and clients view your prices is based on what they value.
What most of us say “we can afford” is based on our priorities of what we value. If you value nice, expensive shoes or eating out at high-end restaurants, you are going to be much more willing to spend your money on these than someone who doesn’t value these things– even if they have more money than you.
I ‘m sure you know people who say they can’t afford something which may not seem to cost much to you. Yet, these same people might take several vacations a year to exotic places or drive expensive cars.
You’ve probably also had clients who were struggling financially and yet they made it a priority to see you. Likewise, you’ve likely met people who were substantially well off and yet would never consider paying for your services.
Because I don’t know the woman who sent me the email, I don’t know what she values…it could be that she only values seminars and is willing to pay a set fee for them, and perhaps doesn’t place a high value on coaching programs. What I do know is that the people who signed up for our coaching intensive made a decision that coaching is valuable to them or they wouldn’t have registered.
On the other hand, there are professionals who do not value marketing education, coaching and consulting (or at least not enough to spend very much money on them) and these people probably wouldn’t take our programs regardless of what we charged. Obviously, to succeed in business you need to make sure that you target the people who value what you are offering.
3. People will often have a higher perceived value for something if it costs more.
There are countless proven examples where the sales of a product or service have increased once the price was raised. Why is that? It’s because often people make the assumption that if something costs more, it must be better. Also, people who value high-quality services and products are more willing to pay for them. I know plenty of therapists who charge $175+ an hour who have full caseloads. I also know many who charge low rates and are struggling to get by.
Most of the professionals who charge more are perceived to be leaders in their field. They often have focused niches, strong websites and marketing materials, and keep a high profile within their network. In addition, they provide high-quality services that bring their clients results. Obviously the perceived value of their services is high enough to get the fees they charge, otherwise their clients would select a therapist who charges less.
In terms of our social media coaching program, I know that some people would have paid more than we charged, and there might have been a higher perceived value for those people had we charged more. In fact, I’ve been told by people that have taken some of my programs in the past that I should have charged more for them. I’m sure you have felt this way when you have received a lot of value from something where you felt the cost was low by comparison.
Pricing services and products can be tricky. You never want to price too low, and you don’t want to price too high for your intended audience. However, it is often possible to charge more if the perceived value is there. It can take some experimentation to get the right price for the value you are offering.
How do your fees compare to the value you offer? I’d love to hear your comments below.
Juliet, well written article. You raise an important point on the distinction between price and value. Price is only relevant as it relates to perceived value…what may seem inexpensive to me for one type of product or service may feel too highly priced for you, and vice versa. It is important, not only as service providers, but as individuals, to look at what we say we value, and whether we are putting our money (and time, and other forms of energy) there.
Hi Juilet. This came at a great time. I am actually priced a bit higher than some other places, but still lower than others. When I think of what I offer, I KNOW my price should increase, but I wonder if anyone will then be able to afford my services. As I read more and understand better my value, it’s getting easier to consider raising my fee. Not outlandishly, but enough. I am hoping to do so at the beginning of 2012, if not before. I attempt to get as much support as I can on this which boosts my confidence.
I offer meditation, Bach flowers, aromatherapy, herbal tea (ALL customized and individually priced), plus I am MBTI Certified and a Certified Trauma Therapist – all to complement my counseling. I am also new – been 1.5 years since I started my practice, so I a positioning myself, networking and bringing in lots of referral sources. In my country, I am the only counselor doing things the way I am…
Great post!
I recently listened to a talk on money and spirituality. The message resonated with me, that we all have our inner rate that jives with our soul.
My therapy husband has a fantastic line for sliding scale clients. He has the bottom amount he’ll charge which is just above his “crabby line.” Any less and he’s crabby to see clients.
I’ve also heard it said that we never pay for someone else’s wisdom. We’re paying for OURSELVES, as an investment in US, any time we buy something like a product or coaching or training.
Hi Kimberly! Glad you liked the article. Yes, we do need to be clear on what we value in our professional lives and in our personal lives. Although we also have to be mindful that what we say we value doesn’t always match our actions. Many professionals say they want a full practice but then don’t follow through on what it takes to get one. This is true when it comes to investing in themselves in terms of money, but also when it comes spending time and gaining knowledge in order to attract clients.
@Elizabeth
It is so true that we are paying for what we want to gain from the money we invest. Again, I like to relate this to copywriting because you really need to articulate what how people will benefit by investing in your services.
@Rachael
Well congrats on having the courage to charge a little more than others. It sounds like you are doing some interesting things. If you can position yourself as unique and prove your worth more, it’s likely you can charge more.
I agree with you, to a large degree. I have occasionally lowered my fee for a client who has asked for that, claiming a “tight budget”, only to hear about what their personal trainer said this morning and how much they lost in Vegas over the weekend. However, this is somewhat rare. In THIS economy, there are many people in the city where I live who have been laid off, can’t find work, aren’t getting any raise at all, etc. The tricky thing is to have a good price for the value we, as therapists, provide, but there are MANY cases where the client is not “holding out” on us, but really just does not EARN that much, and the money just isn’t there. We always have to take into account the ECONOMIC picture and the socio-economic environment. In this climate, when therapists compete, it can be a “race to the bottom” on who offers the lowest fee to “recruit” that client. And when therapists “compete” too much, they bring down the rates on the entire profession!
This goes back to basic business, if the price is too low the customer won’t value the service. Good business practices and marketing will get you almost any price when done right.
Problem as a therapist is do we still serve customers that really don’t have the funds? I have several that literally do not have the money or the insurance to pay, every session for their child is a financial hardship. There needs to be a balance.
I do agree however, that most clients can afford to pay a decent price when it is their priority. The other difference is are they paying cash or with insurance, cash clients follow through and tend to value the service more.
Hi, Juliet. Another great post on a topic that can never get old.
I want to dovetail on your reference to copywriting just to underscore that great copywriting can be a deal-maker. The hub of a social media strategy will always be a great website. If a therapist / coach is either ill-prepared, unwilling or otherwise unable to put that content together, hiring a copywriter is a must.
Hi Tamara!
Absolutely! Copywriting is like any other skill. It takes knowledge and practice to do it well. Since most therapists have never studied copywriting they don’t understand it’s importance and how it works to attract clients. Being a good writer in general doesn’t mean you will automatically be a good copywriter. I find that some people who might be considered good writers in other fields, are often horrible at writing copy unless they study it. As a copywriter myself, I love well written, client-attracting copy because it really does work like magic!
Some therapists want to serve clients that perhaps can’t pay as much as others as they feel they “should” (or they simply want to) provide a service to these people. Others, set their fees based on what they perceive to be their value and then attract those clients based on that. It all depends on what you want. Once you know what you want, you then set your marketing plan to achieve your goals.
Hi Ken!
Yes, it is always true that some people do not have the funds for our services. But, then, these are not realistic private therapy clients. Private therapy services are really for the “haves”, not the “have nots” in our society. This is unfortunate, but true never the less. However, even in a poor economy I know therapists who choose not to lower their fees. Instead they focus on attracting those that can afford their services. In many cities there are usually plenty of people who are still making a good living, it’s just a matter if you want to target and work with those people. I know therapists who are charging high fees and their caseloads have not gotten slower with the economy where it is in the USA. They just focus their marketing and get out there and attract clients.
There is always an abundance of choices we can make that determine our success in business. The question is, what choices do we want to make?
Great Post. These are issues that I constantly struggle with. I am not enrolled in your Coaching Intensive on Social Media. I am hoping you will offer it again. This just isn’t the right time for me. Thanks for all your efforts to educate us in a variety of ways.
Hi Arlene!
Thanks for stopping by. I hope this article gave you something that you can think about to ease your struggle. 🙂
Another timely and relevant article Juliet. This is something I feel strongly about as I see many of my colleagues in Australia undercharge and not value the services they offer.
I have raised my fees twice in the last two years and plan to raise them again in the coming year. What I have seen happen is that the quality of the clients I attract has improved. I am attracting more committed and motivated clients who value my service and are willing to work hard to change. Not only has this helped me enjoy my work even more, but I think I am more effective because I am loving the clients I work with.
I recently had a colleague say to me she can’t refer clients to me because I charge too much. However, I am consistently referring clients away as I do not have the space to see them, when my colleague who offers low-cost fees struggles with non-attendance and difficulty attracting a full caseload.
I truly believe that clients perceive a higher-cost service you offer them as better when compared to low-cost alternatives. There will always be interns and agencies able to see the clients that cannot afford full fees and I gladly refer these clients to them. And this perceived ‘better service’ also translates to helping the client change as well. I believe that the fee is an important part of the change process as well.
I echo your comments that along with a higher-fee service, your marketing materials and website need to reflect a high-quality service. This means investing money in creating a professional looking site and high-end marketing materials.
Sadly, many therapists are still unwilling to invest money in their businesses and this holds them back from attracting the type of clients that can afford a higher fee.
Thanks for raising this important issue Juliet.
Clinton, yes you raise an important point that the quality of your clients improve when you raise your fees. And yes, many therapists don’t appreciate their own value enough to invest in their business to help them succeed, or charge the fees they deserve.
I live in Sydney, Australia. I have struggled in the past to charge a higher amount. I saw a ‘work’ coach for a while who asked me to go from charging $40 a session (When i first started out on my own) to $100 per session and I have struggled after starting my own practice to lift my price. I used your article ’67 surefire ways to get new clients’ article and I created a website, started writing a fortnightly article in the paper of my niche market and I started holding workshops and I also started asking $100 per session. This has been good but I feel after 10 months of doing this I could start asking for $120 per session though that is challenging for me. I have a full time job already in a rehab and can realistically only see a max of 7 or 8 clients a week and have been at times seeing this many clients per week recently.
To be honest the hardest part of having my own practice is keeping the momentum going and encouraging myself to keep my price at around or above $100.
Hi Stu,
yes, it can be challenging to keep the momentum going, but it is essential to keep the clients coming in. The more you keep in action mode, the more confident you will feel about charging your fee.