price

The Psychology of Pricing

 in Guest Post  tagged Kim L. Price / price / pricing / proposal / psychology

Every coach who charges for their services has to decide upon a price. In today’s guest post Kim L. Price shares some of hir expertise and experience as she focuses on:

The Psychology of Pricing

By Kim L. Price
"The Psychology of Pricing' by Kim L. Clark

Have you ever wondered why whenever you buy something at the store, every store, the price is always something like $6.99 or $7,4.95 and never $7.00 or $75.00? Maybe you guessed it’s because of some psychological theory and if that’s what you thought, you were right. Pricing strategy is influenced by much more than the cost to produce the item or provide the service. Those who determine prices, whether self-employed Solopreneurs or corporate marketers, are advised to be attuned to the prevailing psychological inclinations of their prospective customers when considering how to price products and services.

There is a compelling reason that in every retail outlet, the prices nearly always end in .99, .98, or 95 and almost never end in .00. The reason for this unusual practice is based on the discipline called number psychology. Research in this area has persuasively shown that buyers—that is, your customers—do not like zeros. As a result, the vast majority of retail stores will not sell items for $100.00, they instead sell them for $99.95. Why? Because number psychology studies have shown that customers associate zeros with premium prices that they’d rather not pay.

At work here is an intriguing phenomenon known as the left digit effect. The effect causes our brains to (mis)interpret that $99.95 price tag as having a value closer to $99.00, instead of $100.00. Lindsay van Thoen, columnist for The Freelancer’s Union, says that our clients are like any other consumers and that when pricing contract proposals, Solopreneur consultants should keep the left digit effect in mind, follow the lead of retailers and banish zeros from our proposals, to make it easier for clients to agree to our prices.

When we are invited to submit a proposal, it is a good day. Here comes money! The last thing we want to do is to wind up in a wrestling match with a client who wants to nickel and dime us over the price. Unfortunately, clients sometimes feel that Solopreneurs inflate price quotes, even when an itemized accounting is provided. A figure that does not appear to be rounded-off, but rather seems to be specifically customized to the services requested, and contains few zeros, is said by number psychology experts to counteract the feeling that a project fee has been “rounded-up.” A price quote that contains whole numbers is more trust-inspiring and believable to certain clients.

In other words, avoid pricing a project at $5,000.00, because there are too many zeros involved. Number psychology research indicates that we’re better off pricing at $4,825.00 or even $5,175.00.

Pricing pundit Rafi Mohammed, founder and CEO of the consulting firm Pricing for Profit in Cambridge, MA, offers two more pieces of advice to keep in mind about pricing. First, our prices must reflect the value that clients place on the requested service and second, different clients place different value on given services. Other ways to make it more palatable for clients to accept our proposals are:

1) Ask the client to specify the project budget and work with him/her to provide services that you can afford to provide within that amount.

2) Provide three levels of service: good, better and best, so that clients can choose services according to their needs and budget and in a way that reflects the value placed.

A good pricing strategy is an important part of the marketing plan. It sets the stage for building a profitable enterprise. It is imperative to set prices that reflect the client’s value of what we sell and, equally important, to help clients agree that you and your prices are trustworthy.

Thanks for reading,

Kim

About Kim L. Clark

Kim L. Clark is an external strategy and marketing consultant who brings agile talent to the for-profit and not-for-profit organization leaders with whom she works. To learn how your organization can benefit when you work with Kim, please visit http://polishedprofessionalsboston.com.

Article Source:  The Psychology of Pricing

Ezinearticles Expert Page: Kim L. Price

 

 

 

Are You Primark Or Harrods? Pricing And Positioning Is Your Choice

 in quote  tagged business owners / coaching / freelancer / premier positioning / premium pricing / price / price levels / profits / small business / Vicky Fraser

When you are starting a coaching business one of the early questions you have to answer is how much you will charge. In today’s guest post Vicky Fraser discusses price …

Are You Primark Or Harrods? Pricing And Positioning Is Your Choice

By Vicky Fraser

"Are You Primark Or Harrods? Pricing And Positioning Is Your Choice" by Vicky Fraser

Man, we have a lot of hang-ups about money. And a lot of false beliefs, too.

I’m gonna share possibly the most important thing nobody’s ever told you about money:

Price is elastic.

What do you think people consider most important when deciding to buy something? Actually, I can’t tell you the answer to that, because it depends on the person, the product and their reason for buying.

I can tell you, though, only a tiny proportion of people make their decision solely or mostly based on cheapest price. You might be sceptical, but think about it for a second and you’ll realise I’m right.

If everyone bought on price alone, the only clothes shop would be Primark and we’d all be driving Dacias (Britain’s cheapest car) and shopping in Poundland.

Do you think someone buying a Rolls-Royce gives price any consideration at all? I can tell you now: they don’t. People who want a Rolls-Royce want one because it’s a Rolls-Royce, not because they need a car to get to work or take the kids to school.

This is important to you because it means you get choose how to run your business, too. You can charge whatever the hell you want, because “the going rate” is a dangerous myth.

“But wait!” I hear you cry. “All my competitors are around the same price range. I can’t possibly go against that can I?”

Yes, you can. This sameness in pricing is great for you, because you can let those sheep get on with it.

Look, industry norms are meaningless to your business.

It’s really common, when starting a business, to look at what everybody else is charging. I did it. I’m sure you did it – and perhaps still do.

We look at what others are charging and pick somewhere in the middle. Or even near the bottom if our confidence isn’t up where it should be.

It’s a crazy way to sell for a couple of reasons. I mean, if you came to your prices like that… most other people must have done the same thing. Right? Which makes pricing completely arbitrary.

Dan Kennedy, marketing genius, puts it like this: “Understand that everybody else has arrived at their price decisions through the same foolish process as you might now. It’s price incest, which works like regular incest: over time, everybody gets dumber.”

So how do we set prices? Honestly? Get a dartboard, stick some numbers on it, and chuck darts at it. See how your sales go. Include “safe” numbers that keep you in your comfort zone… and include “I can’t possibly charge that!” numbers too – the ones that make your hands all sweaty and set you on edge.

Then go with the number the dart lands on, even if it scares the bejeezus out of you.

I’m being deadly serious here. Because… you don’t have any competitors. You really don’t, and when you get your head around this, your business will become much more fun. And much more profitable.

Your business is different from everyone else’s in the sense that it has you. How you structure your business, how you package your product, how you sell it, how you deliver it… all this means you can price it differently. It makes direct comparison impossible.

Which means: you can wave goodbye to the price buyers!

Most business owners live in fear of pricing – don’t you be one of them. A bit of healthy awareness is fine… But any business decision made out of fear is a bad one.

Fear drives people to needlessly under-price, to avoid raising prices in time (if at all), and to ignore opportunities to sell the deluxe version.

Fear leads to Comparison. Comparison leads to Discounts. Discounts lead to the Dark Side.

I’m not kidding: discounts will destroy your business if you succumb to them. I’ll explain how in my next article.

But first, I really want you to understand that you can choose your position. Are you Primark, John Lewis or Harrods? (If you’re not in the UK, Primark sells cheap stuff, John Lewis is mid-range, and Harrods is… well… Harrods.)

If you’re Primark and you’re happy, that’s cool. As long as you’re comfortable with your positioning and it will get you closer to your goals, that’s great. I’m not judging – not everybody can be Harrods! People buy at different price levels.

My point is: you don’t have to settle for average and you don’t have to compete on price. In fact, you shouldn’t.

Competing on price is a dangerous game.

The really successful business owners understand this.

If you can’t be the cheapest and make that your USP, there is no benefit at all in being at the bottom of the barrel with the rest of the “almost cheapest”. That is truly rubbish positioning.

So choose your position. Make a decision. Take control of your own profits.

I really want you to understand the importance of getting your head around pricing and positioning, so I’ve got something for you: a free chapter of my book, where I dig really deep into pricing and positioning. You can download it at http://www.businessforsuperheroes.com/free-preview-chapter-4

About Vicky Fraser

Copywriter. Entrepreneur. Ran away with the circus.

Vicky Fraser has built her business up from a few hundred quid a month to six figures a year – and counting. She’s author of the book Business For Superheroes, runs the prestigious Small Business Superheroes Inner Circle, and publishes free daily marketing tips on her website.

Article Source: Are You Primark Or Harrods? Pricing And Positioning Is Your Choice

Ezine Articles Expert page: Vicky Fraser

How To Get Paid What You Ask For

 in Guest Post  tagged business / clients / coaching / Ling Wong / money / money beliefs / paid / payment / price / worth

In today’s guest post Ling Wong shares her expertise and knowledge as she focusess on the topic of being paid for your coaching:

How To Get Paid What You Ask For

by Ling Wong

"How To Get Paid What You Ask For" by Ling Wong

We have been told to raise our fees. We have been told to create high-end coaching programs instead of taking clients on a monthly basis. We might even been shown how to structure and price these programs.

All good – the question is, after all the pricing and program designing, are you actually asking for the money and getting PAID what you ask for? If not, all those trainings, pricing and program design are just intellectual exercises… and you may still be constantly discounting, undercharging, over-delivering or even giving away services for free (ever done “I am just going to throw this in”?)

When it comes time to talk coaching fees, many coaches get sucked into their potential clients’ money stories. Coaches, who generally are quite sensitive to other people’s feelings (aka, empathic), have the tendency to short-change themselves in an attempt to make everyone happy.

If you want to get paid what you ask for, you have to be mindful not to get sucked into your potential clients’ money stories, and not to let you own preconception and judgement give charge to the conversation. (Remember, money is neutral – it’s just paper in your wallet or numbers in your bank account – until you give it meaning!)

Regardless of your area of expertise, your clients come to you to make improvements, to get to a better version of themselves through your services. You are there to hold that space, that higher vision, for them so they can step into it.

If you are buying into their stories, you are encouraging them to stay stuck in where they are. If you let them wallow in their stories, you are encouraging a victim mindset that is not conducive to them taking charge and making changes to their lives.

All the coaches I know do want to get paid what they ask for (of course!) The problem happens during the money talk moment of the sales conversation… the subconscious mind kicks in with its fears and doubts, its needs to be accepted and its misguided urge to “make everyone happy.” Without thinking, these coaches would shortchange themselves and then after it’s all said and done, bang their heads on the wall and beat themselves up wondering why the heck were they doing it again.

If you have given in to these stories in the past, I highly recommend you write down a guideline for yourself on what is acceptable, and stick with it. You may even want to explore some scenarios and script out your response.

Having an empowered voice and a healthy boundary around money are also essential in helping you get what you ask for.

When we give away our power around money, it usually reflects something deeper. Most commonly, it reflects Fears of rejection, not being approved of, losing love, not being liked, being judged, or ending up with nothing.

We have a tendency to tie all these to whether people agree to work with us by giving us money. In a way, having people to pay us money, even if it’s not what we ask for, is better than getting nothing because in a way, it is some sort of validation or approval.

First of all, we need to undo these ties, associations and incorrect causality between our sense of self-worth and whether people are paying us for our products or services. In fact, I challenge the often used, almost-cliché phrase “charge what you are worth” because it really makes us believe what we charge is a direct reflection of our worth – which, of course, is not true. (Read this post for more on this.)

After you have figured out what the underlying fear you have behind giving away your power in your money conversation, ask yourself – what if being afraid of X is no longer important to you? How would you feel, what would you say and what action would you take? How would doing these change your business and your life?

What is more important, being afraid of X, or being empowered to get what you really want in life?

Last, but not least, pay attention to your boundaries. Having healthy and firm money boundary can help you sell with integrity. In my opinion, giving in to the money story of one client is not only a disservice to you, but also unfair to your other clients who are actually paying you for what your products and services are worth.

Most often than not, leaky money boundaries can be traced back to negative beliefs about money. Look back at all the circumstances in which you held a poor boundary, and ask yourself what negative belief about money do you have to release in order to make a positive impact with that situation? And, if money were sacred to you in that situation, how would you treat and value it?

About Ling Wong

Ling offers “Business Soulwork + Marketing Activation For Coaches” that embodies her “Heart & Guts” approach. She helps coaches supercharge their actions not only through smart strategies and practical tools, but also through their personal growth and development – so they not only grow their business, but also LET THEIR BUSINESS GROW THEM. Through her “left brain meets right brain” approach, she helps her clients uncover their truth and tap into their intuition, then ground those light bulb moments with practical strategies and marketing tactics to build a profitable and sustainable business that is a full expression of themselves. She firmly believes that all of us can fully express ourselves and our full potential through our businesses.

You can find Ling and download her free “Reignite Your Fire” Soul-Bomb session at http://business-soulwork.com/ or contact her at ling [at] business-soulwork [dot] com.

Selling Made Simple 1

 in Guest Post  tagged business coach / business coaching / charging / client / clients / coach / coaches / coaching / coaching courses / coaching qualifications / coaching skills / coaching techniques / coaching training / cost / executive coach / Lawrence Platt / leadership coaching / life coach / life coaches / life coaching / Michael Neill / money / nlp coach / performance coaching / personal coach / personal development / price / Rich Litvin / sales as service / sales thorugh service / self-worth / selling / serve / Steve Chandler / success / supercoach / SuperCoach Academy / Transformative Coaching

Supercoach Michael Neill shares some thoughts on selling in this week’s guest post.

Selling Made Simple

by Michael Neill

Over the past couple of days, I’ve really enjoyed participating on a “Creating Clients” seminar given by Supercoach Academy faculty members Steve Chandler and Rich Litvin. We were challenged, cajoled, and at times even coddled through the process of facing up to and breaking through our fears about enrolling clients and selling our products and services in the world.

While there were a number of wonderful strategies shared throughout the weekend for inviting conversations and making powerful proposals, I became fascinated early on by a simple question that was being asked by the still, small voice in the back of my head:

What would selling be like if I didn’t know anything about how to do it and was completely comfortable with that fact?

The first thing I realized is that I would show up without much on my mind. I wouldn’t fill my head with affirmations about my self-worth or “visualize success”. If I had any intention at all, it would simply be to see what I could best do to assist, help, or serve the person in front of me.

Not having much on my mind would leave me very present. This quality of presence would ensure both high quality listening and a natural, unforced human connection.

I wouldn’t need to prepare any questions because anything I wanted to ask would arise instinctively out of my curiosity and interest in answering fundamental questions like “what would make the biggest positive difference in your life right now?”, “how can I serve you?”, and for myself, “do I want to?”

Because I’m comfortable not knowing what I don’t know, if you asked me anything that I hadn’t thought about, I would just think about it in the moment. If a satisfactory answer didn’t come, I would promise to get back to you when I had an answer and then keep my promise.

I wouldn’t have any fear about telling you the cost of my product or service because (as Steve repeatedly pointed out throughout the weekend) it would be no more significant than giving you my phone number so you could get in touch if you wanted to speak further. And if I hadn’t already decided what my fee was, I would make it up based on what would make me want to choose you as the next person to serve.

My lack of agenda would inoculate against the appearance of much “sales resistance”, and concepts like “overcoming objections” would become irrelevant because my job is to find a way to serve you, not to find a way to get you to do what I want. In fact, selling would never feel forced or manipulative because if I couldn’t find a way to serve you that I actually wanted to do, I would just move on to the next person.

If I wasn’t enjoying my sales and enrollment conversations, I would know that either I had slipped into thinking my job was to “make a sale”, or that perhaps I wasn’t terribly convinced that what I had to offer would actually be of service.

As the essayist Lawrence Platt writes:

“If you’re experiencing enrolling others in your possibility as a chore, it’s likely you haven’t yet completely distinguished your possibility. If you possibility is authentic, if it’s clear, if it’s genuine, then it’s inspiring to you. When it’s inspiring to you, then it’s inspiring to others. No effort is required for it to be enrolling. Inspiration grounded in possibility is naturally contagious: everyone gets it, everyone wants it. It literally enrolls others by itself.”

When we began enrolling Supercoach Academy three years ago, my first instruction to the enrollment team was that I would evaluate their effectiveness by how often I was thanked by potential students for allowing them the chance to speak with my team. I figured that if we found a way for people to feel grateful for being “sold to”, chances were we would not only wind up making sales, we’d also wind up building strong relationships for the future.

What made my reflections this weekend so powerful was the realization that “sales as service” isn’t just a clever ideology – it is the most natural and unforced way to sell, and as such will provoke the least internal resistance to the process.

In other words, when selling is really about you, not me, it’s really fun to do. Since I’m enjoying doing it, I’ll do more of it. As I do more and more of it, I’ll get better at it. And when I start getting noticeably better at it, chances are I’ll begin to enjoy it even more…

Have fun, learn heaps, and a belated Happy Mother’s Day to all!

With all my love,

Michael

About the author

Michael Neill is an internationally renowned success coach and the best-selling author of You Can Have What You Want, Feel Happy Now!, the Effortless Success audio program and Supercoach: 10 Secrets to Transform Anyone’s Life. He has spent the past 21 years as a coach, adviser, friend, mentor and creative spark plug to celebrities, CEO’s, royalty, and people who want to get more out of their lives. His books have been translated into 13 languages, and his public talks and seminars have been well received at the United Nations and around the world.

Copyright © 2012 Michael Neill. All Rights Reserved

 

 

How to start charging for your coaching – part two

 in Coaching  tagged business coach / business coaching / career coaching / charging / charity / coach / coaches / coaching / coaching content / coaching courses / coaching fee / coaching qualifications / coaching session / coaching skills / coaching techniques / executive coach / exhange / leadership coaching / life coach / life coaches / life coaching / money / payment / performance coaching / personal development / price / resource / value

When to make a transition to start charging for your coaching?

Last week I discussed what’s stopping you from charging for your coaching? This week I want to continue that conversation and look at some different approaches people can take to making the transition to easily asking for an exchange of money?

I’m not going to tell you what you should do but let me share the following approaches and see which appeals to you.

You may even notice that you have been trying one approach and it hasn’t been working for you.

You may spot that I use the word exchange a lot in this article. That is deliberate because you are exchanging your service for an agreed payment of some kind.

All sorts of beliefs, values and fears can get in the way of a coach charging. I will also offer the perspective that what you ask for in exchange for your service can be changed.

  • Coaching provides value. It is your duty as a coach to communicate that value by ALWAYS asking for an exchange of money.

I have no doubt that this school of thought is said with all the best intentions in the world. They already see the value that you can bring to your clients. However, I’ve also seen it be a belief that has stopped coaches from practicing because they didn’t feel ready to charge. The end result being that they don’t do any coaching so are not bringing any value to anyone.

If you are happy with this approach you may choose to start charging right from the word go. Your clients will soon let you know if they are not happy with what you are asking for in exchange. 🙂

  • Coach as many people as you can, regardless of if there is an exchange of money or not. Anybody who will agree – from the person who delivers your post to old school friends. Take the opportunity to get lots of experience.

This approach works particularly well if you are willing to notice the difference your service makes for your clients. While, it may take some longer than others, you will start to see the value that you bring – something that makes agreeing an exchange of money for your service a lot easier.

If you want to use this approach, make it easy for yourself and put in place some form of system that supports you to spot the difference you make for your clients. You choose what will work for you: perhaps it’s getting feedback from a knowledgeable third party, maybe it’s having a set of questions you work through after each coaching session or even ask your client directly!

  • Invite your client to pay you what they feel the value that your work has provided.

Some people feel that this avoids making a “difficult” request for money and provides them with an incentive to do superior work. You may also choose to use that method of exchange if you feel that your client is cash poor.

This will depend upon your style but some clients may feel awkward with this request.

  • Invite your client to exchange your coaching for some other form of payment other than money.

In effect this is like a bartering system. For example, perhaps you will agree to work with a website designer to create a site for you in exchange for coaching.

If you choose to use this system then you will make it easier if both of you agree in advance what will be provided by both of you.

Remember that different services will have different value to each individual. For example, someone who does not have a computer and has no intention to have a website will not consider that a website design will be that valuable to them. Someone else who is looking to create a website but hates the idea of working out how to design it themselves will value a website design much more highly!

This means that sometimes in a barter exchange one half can end up feeling that their service is being under valued etc.

  • Exchanging your coaching for an agreed donation to a charity of your choice.

Many who start with this approach use it as a stepping-stone to being comfortable accepting a payment themselves. They find that they can practice asking for a payment in the comfort that a charity who’s work they believe in will benefit.

  • Make an agreement that your client will “pay it forward” by donating their time and/skills etc to someone else.

Again this is often a gentle approach that some like to take to get comfortable asking for an exchange for the service they provide, before moving onto asking that exchange involve money.

  • Wait until a set time/event has happened

This normally takes the form of not charging until qualified or attended a particular course.

Sometimes this particular approach has a moving goal post, for example, I’ll charge once I have done the first training weekend becomes, I’ll charge once I am qualified becomes I’ll charge when I’ve worked with x number of clients or when I’ve done another course etc.

Have I missed an approach? Want to share which way you used, or the option that appeals most to you? Fill in the reply box below and click submit comment.

About the Author

Jen WallerJen Waller is on a mission to support, nurture and encourage coaching skills and talents from non-coach to coach and beyond.

She has created a free 7 day e-course about how to create your own unique coaching welcome pack that works for you and your clients. Get your copy here.