in Pricing

Why You (Likely) Need To Charge More Now

Dear friend and reader,

I’m writing this post for self-improvement authors, trainers and coaches that have been in this field for a while already but are disappointed with their results. If you are just starting out, this may help you but my primary focus is on those that already put a minimum of one year in this field.

This world taught me something not very empowering. This is that you’re supposed to accept who you are, what you can achieve and be happy in your small box. It taught me that “you must” accept faith and that if things have always been in a certain way, things always must be in that way. I’ve learned that consistency for many is a virtue, even when consistency is actually the biggest obstacle that keeps you back.

I’ve learned that most people expect you to be the same, year after year, to tell the same story, to have the same level of success and achievement and generally, to not progress. This is especially true in the solopreneur / coaching industry when it comes to price. If you start at $50/hour, then in the view of most people, this is the rate at which you must stay for the rest of your life. After all, you’re supposed to be consistent.

This belief is what keeps most entrepreneurs down. The truth is that you’re not supposed to be consistent. If you’ve been charging $100 per seat at your seminar and tomorrow you want to start charging $20.000, that’s perfectly okay. What you need to understand is that your value as a coach / speaker is not determined by how much you are charging now but by the value you produce and most people I’ve met over deliver value and undercharge. In other words, they are masters in their fields and yet they charge just as much as complete beginners.

If today your average sale is $100, tomorrow you can change the price to $500 or $1000. Yes, you can do that. There need not be any relationship between your old prices and new prices. There is no one that regulates how much you should charge apart from the market. If the market pays, perfect. If the market doesn’t pay, then you’re offering too little and you’re charging too much.

I know a copywriter who five years ago was charging $1000 per letter. Do you know how much he charges now? A 10% improvement? A 20% improvement? A 100% improvement? He consistently charges and gets between $20.000 and $40.000 for a single sales letter. He knows that what he’s offering is very valuable for the right people so he charges 40 times more now than five years ago.

You need to stop thinking of prices as constant. Your prices increase as you increase your value. If you go to a workshop, read a book, achieved good results for your customers, your value increased and you can charge more. You can give yourself a raise every single time you feel like you want one. Yes, some customers are not going to be satisfied but it is fair to you to charge the same now as you did two years ago? Well, many people do that and worse.

You have the right and the obligation to price yourself based on the value you deliver to the marketplace. The relationship between value and price must always be a constant. You don’t want to be the “best deal” because you’re not WallMart. You’re a professional that is helping change lives and if today you are worth ten times more than one year ago, then charge ten times more. Don’t be afraid of the criticism that this will bring – because there are customers for every price level.

How would it be if Brian Tracy charged as little as he did when he started his career? I don’t know how much he actually charged but I can bet it is not $50.000 per presentation as I’ve heard he’s charging now. How stupid would it be if a Fortune 500 consultant charges as little after ten years of experience as he did after finishing school? It’s not logical and yet, people do it all the time. I see trainers who became amazingly better and haven’t increased their fees. I see writers who improved tenfold and yet, serve their customers at the same rates as when they’ve started.

This is scarcity based thinking! It is saying that you’re afraid that your customers are going to leave you and nobody else will come to your business when you refuse to charge what you’re actually worth. Yes, again, some people are going to be mad and upset about this but the vast majority will be simply be replaced by customers at a new price level and some of the old ones will make the jump too. You need to be brave and say “this is what I’m worth now, this is what I’m charging” and not ask the money of last year with the value of today.

Air carriers use dynamic based pricing. This means that the price constantly changes based on internal and external conditions. They aim to maximize their profits by constantly increasing and decreasing the price. ROI is their goal. I’m not saying to be as dynamic as an air carrier as there are few industries in which that model works well but you can update your fees every six months, three months and maybe even monthly! The only thing that is holding you back is just your fear of being judged for constantly increasing your prices but then you need to ask yourself – if you deliver better services, isn’t it only fair to be better compensated? After all, you are paying the price to improve yourself. Isn’t it only fair your customers pay the price too?

I can’t stress as how important this is because at least half of all life coaches, trainers and speakers I know charge fees as old as one year and in some cases, three to five years. Leaving aside inflation and that $1000 five years ago was a lot more valuable than $1000 is now, they have invested hundreds, thousands of hours in improving their craft and they’re asking for fees for someone that is far inferior them.

I know that you want to serve your customer but there must be a balance. There’s no incentive to get better if you are actually punished for becoming better. It is like a writer working on a hourly fee. If ten years ago, it took me five hours to do something and now it takes me only one, does it make sense to charge for one hour because I’ve improved five times my skills? No. It doesn’t. It’s actually punishing performance. Any improvement in productivity means a lower fee for the customer which may work great when there physical products but it is the worst thing you can do for yourself when you’re trading your time.

Performance should be rewarded, not punished, but you’re the only one that’s in a position to do this. Your customers will pay you what you ask. If you ask $10/hour for your time, there are people who will pay you that. If you ask $1000 per hour, there are people who will pay that too. Your only job is to deliver that value. If you feel like what you’re creating for your customers is worth $5000/hour, then charge $5000/hour. There are psycho-therapists in places like Beverly Hills that charge ten times and even fifty times more than someone in a place like Southern Italy. Your skills, your ability to create value determines what you get paid, not your market. If you feel like you’re worth more, then charge more and go to the people who are going to pay more. It is as simple as that.

That being said, my advice to you is to double your rates, whatever they may be. If you’re charging $25 per hour, double it to $50. If you’re charging $500 per speech, double it to $1.000. You’ll see that you’ll get paid the new fee just as easily as the old one and they’ll be just as satisfied with your services now as they were in the past.

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Best regards,
Razvan Rogoz
The Self-Improvement Copywriter