Women entrepreneurs, who work so incredibly hard with gusto and passion, are not living the dream. Here are my reasons why you’re broke. Love ‘em or hate, I challenge you to make inspired changes around pricing in your business.
1. You Charge Like a Girl
You charge based on what you need, not the value to your client. That leaves money on the table every time. Clients hire you because of perceived value to THEM. So charge accordingly. If you don’t know how your solution improves your customers life, saves money, cures world hunger or whatever, you got more immediate problems to deal with than your price. Seriously.
If someone looks pleasantly surprised when they hear your number, guess what? You’re probably under-charging. Do the research. Go to the local business library and get friendly with the librarian. She will be your best market research asset. She knows where the data is buried and how to read it. You can reverse-engineer your pricing model.
For instance, say you sell social media services to medical practices to improve their local search marketing. With a little research online and off, you could find the largest hospitals in the area. Find the medical practices surrounding those hospitals. Then do research on the average household income in the neighborhood. Calculate what adding 3 new clients would mean to their bottom line and viola, you have the beginning information for figuring out your price. I did this when I was consulting to HR departments that had manager issues.
And, don’t forget to ask past clients what they valued most about the result you helped them achieve or their interactions with you. That has value! People will pay to do business with business owners they know, like and trust. You know that, right? Maybe too well, which leads me to another reason.
2. You Desperately Want To Be Liked
Enough already with the Sally Field impression...you like me, you really like me. Hello, this is not a popularity contest. Too many women hang their self-esteem on whether someone else is buying. This is gonna sound paradoxical especially if you’re a one person shop but your client isn’t buying you.
They are buying your expertise, your help with a transition that they will make for themselves, not you. So you don’t need to feel guilty or evil or sad if they don’t like your price. It’s not about you, really. It’s about the fit and what works for you both.
The best thing to do is change your success model. You know, how you know you did good. Being a lawyer, I’m kinda the competitive sort I like to win. (Board games are banned in our house, looking down sheepishly). Once I became fully invested in finding creative solutions through mediation, I needed a better standard than win or lose because mediators have to be neutral. We can’t influence the outcomes.
Originally my success model was: did anyone learn anything new about themselves or the other person in the mediation? (Sometimes that included me- lol) I felt like something important got accomplished even if the parties didn’t reach agreement. Now, my model is: did this person feel heard, acknowledged and inspired to take one step farther on their path to success.
3. You Think You’re Someone’s Mother
This applies to you if you feel anxious or uncomfortable with the client spending xxx amount on your services because [fill in the blank]:
- the economy is bad
- they have a limited budget or so many expenses
- they really don’t need it
- they’re so cute
- it’s so easy for you; it shouldn’t cost much
I hate to break this to you, but you’re overstepping your role. Yes, you care about your clients. Yes, they come to you for your opinion and advice. However, you have to remember that they are adults who are capable of making their own decisions. Whether you agree or not. It’s not your place to decide what they can or can’t afford. In doing that you steal their power- their ability to make things happen- and diminish your own.
How many more sales would you close at the price you want if you had a proper pricing conversation with your clients?