Your pricing will make or break your business.
Many practitioners and coaches think pricing is a guessing game, and look at what other people are charging, or what the market “will pay” in order to determine the cost of their services.
Pricing isn’t a guessing game though.
Today we’re going to dive into the three biggest pricing and packaging mistakes that practitioners and coaches make and how to fix them, so you can have a profitable business with long-term clients, steady, predictable income, and create the kind of impact you want to have on the world.
Ready? Let’s dive in.
The #1 most common mistake coaches, consultants, and practitioners make in pricing their services is…
They start by looking at what other people in their field are charging, and come up with their own price from there.
Now, it’s fine if you know what other people in your industry or field are charging, but you don’t know what their business expenses are. You don’t know what kind of personal income they need. You don’t know how much they pay in taxes. You don’t know how many hours they work.
How much THEY charge really has nothing to do with your services and how much you need to charge for a profitable business.
What I’ve seen happen when practitioners have made up their pricing based on what others are charging is that their business starts growing to the point where they’re booked full, working all week seeing clients…
And they’re still not making enough money!
They don’t have time for exercise, self-care, rest and relaxation. They don’t feel like they have enough time to spend with their kids, their partners, their friends and family. They feel chained to their business, because if they stop booking sessions, the income stops.
That’s the hard way of finding out that your pricing is off, and something we want to avoid at all costs.
The 2nd most common mistake consultants, coaches, and practitioners make is..
Pricing their services based on what they think their market “can afford”.
There’s really no such thing as being “able to afford” something or “not being able to afford” something. It’s entirely subjective…who’s to say how much you can afford to spend on something?
Only you, right? You get to decide whether you “can afford” something or not.
I was having lunch with a chiropractor friend recently, and she was talking about this client that called that morning—he was in pain, stuck hunched over and could barely walk.
He was hoping to be seen as soon as possible, so she made a spot in the morning for him and he came in.
This was actually the 3rd time this same thing happened with this guy, and each time he called, he’s in a lot of pain, and he has to take a sick day off work…so this back issue has definitely disrupted his life.
So we’re eating lunch and my chiropractor friend is telling me how he came in that morning, she did her thing to help him, he felt better, and she told him, “Look, you really need to come in more regularly and while you’re healthy so that we can prevent episodes like this.”
And he said, “Yeah, I know, but I just can’t afford it.”
So here’s the thing: this guy happens to be in a circle of men friends with the chiropractor’s husband. And she knows that this client has season tickets to the Giants (we’re in the Bay Area, that’s our baseball team).
I just looked up the cost of season tickets and they range from $2000-$5000 depending on the seats.
When he says he can’t afford to see the chiropractor more frequently, it’s not a statement about how much money he has.
It’s a statement about his values and what’s important to him.
The point is this: What people are willing to spend their money on, or not spend their money on, is not a reflection of how much money they have, but what they value.
People spend money on things they “can’t afford” all the time. I know I do it. And on the flip side, many of us don’t spend money on things we should.
In short, if you are pricing your services based on what you think your market “can afford” or “will pay” it’s a mistake and only does a serious disservice to your business.
The final pricing mistake, and this one is big because it’s about more than pricing.
It’s about whether you are truly being the best practitioner or coach that you can be in your work with clients. It’s about whether you can truly say that you are a Champion for your clients, helping them achieve their big, long-term goals.
I know that you are really good at your craft, you’re experienced, highly-skilled and educated and you really want to help your clients.
But have you structured your service offers to do that?
Not if you’re selling your services by the hour or by the session.
The 3rd big pricing mistake is offering your services by the hour or by the session.
And I know offering your service in terms of sessions, or hours, is just “the way everyone else does it” in your field. At least that’s how it seems.
But here’s the truth:
It’s not the way everyone does it. It’s not the way the most successful practitioners and coaches do it. And it’s not the way to do it if you truly want to make massive change in the lives of your clients.
I will never forget the client that taught me this lesson…
This was my first or second year in the fitness business I owned, very early on.
His name was Greg, and he came to my business for personal training. His goals were to look good and lose a little fat around his midsection. For him, it was all about aesthetics.
So he bought a pack of 10 personal training sessions, because that’s the kind of thing I offered at the time.
Well the first week he came in for 2 sessions. Then the next few weeks he had one. Then he skipped two weeks, came in twice, skipped another week…and then he started complaining that he wasn’t seeing results.
Ugh! He wasn’t working out consistently. And he had made no changes in his lifestyle or nutrition. I tell this story now and we can see how obvious the problem was: he simply wasn’t doing what he needed to do, to see results. Right?
But here’s the thing: that was my fault for selling him a pack of sessions.I should have sold him a program that would provide the results he was looking for…something like:
- 6 months of working out twice a week
- A nutrition plan
- Sleep tracking
- Recovery work to do at home
- (fill in the blank)
How would that have changed things?
He would have seen the results he wanted. He’d be looking and feeling great and telling everyone about my service. He would have realized that it was a no-brainer to continue the training even after the first 6 months. And I’d feel happy and respected and proud and so connected to my client because I was helping him achieve the long-term results he was looking for.It could have been so great.
But Greg didn’t get results, so he didn’t buy a new pack of passes (no surprise).
And he left my business as client that was unserved by me and still had a problem he needed solved. That was my fault for not setting up my service model to truly get results for Greg!
A per session or hourly model is not set up to provide your clients the results they’re looking for.
So what’s the right way to package your services?
With a program designed to truly help your clients achieve what they’re really after.
Your service packages should be based on providing great results for your clients. Single sessions don’t do that.
So instead of thinking in terms of sessions, think in terms of what your clients need in order to achieve their goals. Design your service packages with that in mind.
Sell them the results, the solutions to their problems, not your hours!
You’ll have happier clients that way, AND it’s more fulfilling for you as the practitioner because you get to have these long-term relationships with great clients where you get to help them at a deep level and see them achieve what they’re really after.
You get to Champion your clients and their big goals!
Now, I haven’t even talked about the business-side of this, and dang if this blog isn’t already too long…
But just think about it why an hourly or session-based service model doesn’t work from a business perspective: if you’re just selling session-by-session, and you don’t get paid unless someone comes in and uses the session, then you never know how much money is scheduled to come into your business next month or the month after that.
So your income can go up and down, drastically. You can have days where you’re slammed, and days where you’re twiddling your thumbs. Sometimes a client will cancel a session and then you’re out of the income you thought you’d get. Right?
Every month, you have to continually work on selling more hours or sessions in order to create revenue.
And maybe you’ve been paying the bills just fine each month. But will you be able to pay the bills next month?
It’s an unsustainable model. A sustainable business is one where you can actually forecast – not estimate or hope, but forecast – exactly how much money is scheduled, via automatic billing, to come into your business next month, and the month after that, and the month after that.
And if, in your current business, you are living month to month in what feels like an unpredictable roller coaster, you can fix this – and the fix starts with designing a service model that provides ongoing, real results to your clients….and pricing those services properly.
Learn How to Properly Price and Package your Services for Profitability and Better Results for your Clients With My Free Pricing Calculator.