96: How To Price Your Offer

Transcript

How To Price Your Offer

Meaghan Smith  00:20

Hello, and welcome to the Money Mindful Podcast. I am your host Meaghan Jean Smith. I'm a money mindset and life coach for women, I help you create a better relationship with money and yourself. Alright, welcome. Today, I want to talk to you about pricing your offer, undercharging, how to price your offer, how I priced my offer, I want to share all the things about pricing your offer, I want to share about my experience, not because my experience is the correct way or anything like that, just because I think it will help you to put it into perspective with real life examples. And I want to share some examples of what I've experienced with my clients when they've put pricing out. And I'm just going to come straight out and say right at the start that if you are expecting this episode to tell you what is the right price to charge, I'm sorry to disappoint you because there isn't a correct price to charge. And I'm going to talk about that in more detail and why that is so.

 

Meaghan Smith  01:47

But first I just wanted to share a really interesting story that happened to me recently that just goes to show that how we think about money affects how much we charge, so much. And also the difference when it comes to females and males and how we think about money and what we charge and our perceived value. So I was in an interesting situation recently. So I, if you're new to the podcast, and you don't know, I'll give you a bit of background information.

 

Meaghan Smith  02:27

So I'm into my second year of being in business. And I don't work full time in my business until my children, my youngest daughter, goes to school, I operate my coaching practice on a part time basis. And in my first year of business, I did very well, I've created a profitable business. And with the numbers that I made, I now needed to - in this new financial year in Australia, when you earn over a certain amount of money, you have to register for GST. And so I have to register for GST, because I'm going to earn over that amount of money. And when I was going through the discussion with my registered BAS agent, that's for those of you who are overseas, that's just a person who does your accounting for you, like does your tax return stuff with the taxes, the government taxes, the GST? And sorry, I don't want to get too wordy on you. But basically GST is just a government tax that you have to put on the price of your product on top of the price of your product. And that just goes to the government, right? It's like I think it's called VAT in Europe. And I have no idea for those of you in Canada and the US and elsewhere in the world. But this is my experience here.

 

Meaghan Smith  04:00

So I was talking to my bookkeeper at the time, my BAS agent, and she is, she was, she's a female, she still is a female, I was gonna say she was a female, she still is one now! And the conversation went a little bit like this:  She's like, Yeah, well, you've got to be really careful with that because that can be a big shock to your clients like because 10% is going to go on top of what you charge and you've got to really think about whether you're going to absorb that cost and keep your price as it is, that you absorb the cost of the GST. And this was how the conversation went, right, and she wasn't telling me what to do, but it was definitely leaning towards that this could be really difficult for my clients. This could be something that my clients won't like, having to pay an extra 10% And that, you know, I really need to think carefully about whether I want to absorb that cost.

 

Meaghan Smith  05:08

Anyway, in the meantime, the bookkeeper that I used, sold her business. And so it rolled over. And I've been using the new company and it just happens to be a male. And he's also an accountant. And I was talking to him because it was at the time where I had to register for GST. We've just moved into a new financial year. And I said to him oh yeah, so I just have to think about what I'm going to do here. And he basically was straight up like, well, for every 10 clients, you get, that's an extra $6,000 you have to absorb, why would you do that? That's such a fair, a hefty whack that you need to absorb. That seems really, really silly. He didn't say really silly, but he was just, he was so like, why would you absorb the cost of that, like, that's what - he said, You're not getting the money, the money goes to the government, like it's a really standard thing. Like it's the law, you have to put that 10% on, this is your price. And I was just so fascinated with the approaches from the female bookkeeper and the male bookkeeper, and how different they were. And it was interesting just observing, like how I felt and my thinking, from hearing these two different perspectives.

 

Meaghan Smith  06:47

And when I just sat with that, and really thought about that, like, Oh, yeah, like every 10 clients I get, I'm gonna have to pay this extra six. I mean, hang on, I'm sorry, I got the maths wrong, not 6000 an extra 5000. Like, absorb that cost. I was kind of like, Why am I doing that? How do I really feel about this? And it was coming from this place of sort of, Oh, yeah, I can't, I mean, I can't charge more. And, you know, this really sort of diminished energy. Whereas, you know, if another business charged - if I was getting a service from another business, and then they registered for GST, and suddenly, I was being charged 10% more because of GST? I wouldn't think anything of it. Like, I would just be like, Oh, yeah, well, they're charging GST now, they have to put that on, that's the law.

 

Meaghan Smith  07:47

But I just wanted to share this with you, because I think this is a really common thing that women do: we we undervalue ourselves. And we also absorb the costs of things. And we don't look at what the cost of operating a business actually is. And I think that it's very common practice for women to undercharge and undervalue our services. So I want to spend this episode, just giving you some really helpful questions that you can ask yourself, but also, just sharing with you what I've done in the hope that you might be able to use this information as a guide.

 

Meaghan Smith  08:43

So when I very first started my coaching practice, I had no idea what to charge and the coaching, I was in a coaching programme at the time. And I followed the coach's advice, and she just said, Listen, if you don't know if, if you have a lot of drama around your price, and you don't know what to charge, just charge $100 a session, boom, just be done with it, and don't spend any more time thinking about it. Because the amount of time that you will waste in drama about what you charge, you could be using that time going out and meeting people and getting clients, right? And so I just thought, Okay, well, that makes sense. I'm gonna do that. And also that was kind of like around what I was, you know, roughly what I was used to getting paid. And so I did that and when I got my very first client what happened was, I hadn't charged for coaching before. So I had a lot of limiting beliefs and let's say drama around charging for a service like providing a service and actually charging money for it.

 

Meaghan Smith  10:19

And I think this happens for a lot of people who go into business for the first time, because we're so used to receiving money from someone else, like money comes from the company that we work from, or money comes from our partner who works, right,  while we look after the kids, or I think it is an identity shift to become a businesswoman and an entrepreneur, who is the person who is creating the money. Right? And for me, definitely, it brought up so much of feelings about not feeling good enough or not feeling worthy enough. And it's not that I'm not worthy, or I'm not good enough. But also, I'd never really had that experience of charging for something. And it felt like it was connected to my self worth. And that's the biggest piece that I struggled with in the beginning, and I see my clients struggle with as well.

 

Meaghan Smith  11:34

And so even though charging $2500 for a coaching package seemed really not that much money, I mean, comparatively to what I charge, or what I pay, for my coaches, that's nothing, right? But it was a big deal. For me, I felt it was scary to charge that amount of money. In the beginning, I hadn't experienced charging that amount of money. And I got lots of coaching on it, and I really felt that I wasn't quite there yet. And so I'm going to tell you something that you might not be expecting me to say as somebody who works with money mindset.

 

Meaghan Smith  12:17

But this is like been my whole growth, guys, and I want you to know about this, because I want you to be able to have this too - is that in the very beginning with my very first client - I had clients who were non paying clients in the beginning. That's what I did at the start to get started. I let everybody know that I was coaching and I took on initially, I think it might have been around six, roughly six clients that I coached for a period of time for free. And then I went on to charging, and I just really wanted to develop that self concept of I am a paid coach, like people pay me money to coach them. And what I realised was having someone pay me money was more important than actually getting $2500.

 

Meaghan Smith  13:11

And because I had such lack of confidence and self belief in the beginning, charging that money, what I did is I charged half price. And I know that there's a lot of coaches out there who would say no, no, no, don't do that. You have to charge what you're worth and the product that I was selling like the coaching, the result that you get from coaching was worth way more than $2500 but I didn't feel confident selling at that price. I hadn't built up that self concept of myself being somebody who can charge $2500 right,  but I wanted to help myself. I wanted to create evidence that I was a person who had clients pay me money to coach them. And so I offered it at half price because in my mind it was an absolute steal, like it was the bargain of the century. It was like an absolute no brainer like to the point that if this person had said no I would have been like Are you crazy? Are you insane? This price is absolutely insane. To get help to get the result that you want in your life and can I tell you that that was the best thing that I could have done for myself in the beginning.

 

Meaghan Smith  14:48

Now do you need to offer your offer, whatever it is, half price? Absolutely not. You do not need to do that. Maybe you have a much better self concept of yourself, than I had when I started, I'm not saying that that's the way to do it. But sometimes we have so much drama about the price that we then, you know, get so caught up in it and we try to make an offer, but we don't believe in the price, and then it's so hard to sell. And then guess what, we don't, you know, because it comes across like energetically.

 

Meaghan Smith  15:26

Okay, what next. I have to tell you, I feel like this might be a bit of a long episode, because there's so much that I want to share with you around this because I think it will really help you. So if this is you, if this experience is you, if you're starting out in business, and you're feeling like you're very insecure around charging what - I mean, you might have a price in mind, right? Like, you might have a price that you want to charge. But you just feel too scared to charge that price. I want to offer that you can just do the work, like you can do the thought work. Like if you've got somebody to help you work through this to get to a place where you can just charge what you want to charge, right. Because sometimes we just have to take courageous action and go for it. But if you have so much drama around it, that it's blocking you from moving forward and making offers and showing up for the people that you want to work for.

 

Meaghan Smith  16:27

Then my suggestion is, and this is what one of my clients recently did when she made an offer to her first paying client is she had a price in mind that she wanted to charge, and she liked that price. She liked her reasons for charging that price. But it felt really difficult for her to make the offer at that price. Like she sort of felt she had to convince the client at that price because she wasn't convinced herself. And so what I got her to do was play around with different prices, like where do you feel like it's a no brainer? Where do you feel like, what price, if you lower it, what feels like you could just be, yes, this, absolutely I could sell this, not a problem. And she did that and got to a price where she was like, Yeah, I feel like I could offer this price. And I feel really good about it, and it feels like a total bargain, and I just feel like I don't have to try and convince or do anything like that to get the sale. And so she did that for her first paying client and the client said yes. So that's amazing. She has her first paying client now.

 

Meaghan Smith  17:43

And now she has the opportunity to build her self concept as a coach who has paying clients. And now she can start charging what she wants to charge. Because I only offered half price to my very first client, I never offered half price again, like every other person after that was at the full price. But that was the best move I could have made because it got me into being in the identity and the self concept of somebody who is a paid coach, right? And this applies, you don't have to be a coach for this to apply. This can apply to other industries.

 

Meaghan Smith  18:22

So now I want to shift you to the other side of things where you're already working, and you're bringing in an income and you want to raise your prices, but you're scared to raise your prices and what you can do around this. And the first thing I want to say is that when it comes to price, we're so obsessed with ourselves, like how we feel what we think of our value, whether or not we think we're good enough or whether we deserve it. And we forget to think about our clients, and what's in it for them. Like how is it beneficial to your client to raise your prices? Whaaat?

 

Meaghan Smith  19:19

All right, I've got to explain that. Okay. So let's take the example of when I was charging when I started and I was charging 2500 per client. Now I said to you that at this current time I do not coach full time, I coach part time. And at around 10 to 15 clients I'm totally booked, like absolutely filled to the gills, like really 10 to 12 clients is, that's me being fully booked. Now at 2500 a client, let's do that simple maths here, if I've got 10 clients that's $25,000. Now, that's not a lot of money when you're running a business, okay? This isn't - when you run a business, you're not just getting the money and it's all going to you, there's operational costs of running a business, there's also tax that you have to pay. And you need to pay yourself a salary out of that.

 

Meaghan Smith  20:24

So for me, I realised that that price that I was charging was not a price that was going to help me grow my business. And it was definitely not going to help me with my clients. Because if I wanted to earn more money, I would have had to have squeezed in a whole heap more clients. And here's why charging more can be so much more beneficial to your clients. First of all, by me charging more, I can see less clients and I have more time to work on my business. I can create more resources for them, I can upgrade the systems in my business, right, and I've got the time to do that, because I'm not squeezing into every single hour of the day, another client, so I can earn more money. Right? I have a lot of space and time for my clients to the point where there's been occasions where I've got off a call from a client and created a whole workbook for them, because I know that it's something that they need, and I've had the space to do that. Now that's a better quality of service, right? Like, I wouldn't be able to do that for my client, if I was cramming in clients everywhere to try and make more money at $2500 a client. So I did some maths and worked out what would be a good price to pay, to have a good price to charge for my business to be able to operate in a way that serves me and serves my clients. Right?

 

Meaghan Smith  22:11

And so I decided to double my prices. And without examining that and without like really looking closely at first, saying something like I decided to double my prices can sound like really full on like, What? How can you do that? Like, you mean, you just doubled your prices. And my brain had a hissy fit about that, like what you can't double your prices. That's crazy. And I felt extremely nervous and worried about telling my existing clients that I've increased my prices. But again, this is all coming from my thoughts about me, and how I feel, and nothing to do with the client experience.

 

Meaghan Smith  23:05

Now, I don't know about you and your business, but I'm a coach, and my business is about transformation. If you come and work with me, you work with me because you want to experience a transformation, right? And what better way to show my clients how to transform than to be a product of my product, like do my own transformations, right? Like I am taking courageous action, I am up-levelling, I am transforming. And then all of that work I do on myself, I'm able to bring to my clients. And the funny thing is, is it's like do I want to be a coach who is scared to raise their prices and be like operating from a small space? Or do I want to be a coach who is a product of their product, like I am growing and evolving and up-levelling all the time. And that's exactly what I'm helping my clients do.

 

Meaghan Smith  24:09

And so for me, it was a no brainer, because even though it felt scary, to double my prices, it was also something that I felt like I need to do this, I need to be a product of my product, I need to be showing my clients what is possible. And the amazing thing is is like I got way more clients when I increased my price, I mean, you know it just goes to show, and it's never about the money. We have so much drama around the money, but price is neutral. It really is. Money is neutral. And there will always be people who think you're too expensive and there'll always be people who think that you're too cheap. But one thing that I believe and operate by and I'll share this with you now, as someone in my mastermind recently said, you pay attention to what you pay for. And I've got to say, I think this is so true and such a factor when it comes to setting your price. And I want to tell you a couple of stories around this.

 

Meaghan Smith  25:25

So when I got my very first coach, it cost me around $500 per month. It was a group coaching programme. And for me at the time, that was a lot of money. I wasn't working, we were living off one income with just the two kids. So to pay $500 for a coach every month was massive for me at the time. But I tell you what, you better believe I showed up. For every call. I did every bit of homework that they gave like, there was homework, daily homework, I did that coaching every single day. And guess what, I have had monumental shifts in my life in regards to how I show up, how I think about myself, my capabilities. Since getting a coach, I started a podcast, I created a business, I did huge, scary things like actually leave teaching, like a really stable kind of safe job that, you know, most people in the world would think. And I just went all in on my success, my family's success, we moved interstate. The way that I have dealt with this pandemic, you know, so many positive things have come out of it, because I got coaching. And at the time, I paid what I thought was a lot of money, but I gave it my all and I got the results.

 

Meaghan Smith  27:07

And it's so interesting, because I had a consult with somebody recently who when I told her my price, she was totally shocked. And, and she was like, Oh, I just didn't expect it to be that much. And I asked her well, how much did you expect it to be? And she said, oh, look, I thought, you know, it would probably be around $30 a session. And I just asked her like, really out of curiosity, I said, how seriously would you take this coaching, if you were paying $30 a session? I said, Would you show up to every session? Would you be worried if you missed a session? And she said, Yeah, you know, like, You're right. I wouldn't take it seriously. Because look at gym memberships. You know, we pay to go to the gym, and then we just, we don't go, right? But when you make that big financial commitment, you show up, right? You pay attention to what you pay for. And I'm in the business of transformation. So I want my clients to take this work seriously, like I want them to show up for themselves. And they do. Right? Because  they're paying for it. And so they do the homework and they get the results. And that's  the beautiful thing about that.

 

Meaghan Smith  28:37

So what I want to end with and really encourage you to marinate on and think about if you're wanting to increase your prices, is think about it from the perspective of your client. How does it benefit? Like if you're a service provider, right? How does it benefit your client if you charge more? Okay? I mean, even just things like the hair salon, I have paid $40 to get my hair cut, and I've paid, you know, over $100 to get my hair cut. And the experiences were very different. You know, in terms of the type of salon, the service that they offered me,  the booking service, how quickly I could get in, all these things, like price really doesn't matter. It's - you can charge whatever you want, because there's always going to be low budget, medium range, high budget and whatever, high ticket or whatever you want to say. But whatever you decide to charge, you're always going to be too expensive for someone and you're always going to be too cheap for someone else. Like that's just the way the world works, right, there's different price ranges.

 

Meaghan Smith  29:54

And so you really can charge what you want. But some great questions to ask yourself is, do I like my reasons? Right? Like the price that you choose, how do you feel about that price? Like, do you feel scared to charge that price just because of your own self concept? And what you're used to charging? Do you like your reasons? And maybe you want to become somebody who can charge a higher price, but you're not quite there yet, then you can do the kind of  things I've talked about today where I helped myself get to a higher price. And I really coached myself on that. But I really was open to exploring honestly, my thoughts around it.

 

Meaghan Smith  30:47

Truth be told, I really believe it does not serve my clients to charge a cheaper, rate. I really believe that in my heart, and so I have nothing on the price that I charge now, nothing on it, like I think my clients get so much value for what I charge, because if I charged them less money, one, I wouldn't be able to deliver the service that I deliver, because I would have to cram in more clients. And two, I show up, I show up with a bigger capacity. When I started charging more, my coaching improved in a way, it's hard to explain, but it's like I just had a bigger capacity, to hold more space for my clients and more space for their growth because I was holding space for my own growth. So I really want to encourage you to do this work and look at your pricing because it really serves nobody you playing small. It really doesn't.

 

Meaghan Smith  31:58

You know, I bought a beautiful velvet collar for my dog recently, Dasher, she's a whippet. And I found this company. She's in Melbourne, she is a mum, she makes them herself. And in my opinion, I think she way undercharges for this beautiful product that she makes. And if she goes out of business, because she's exhausted, because she can't keep up with, you know, producing these collars, because she charges so cheaply, I'll be devastated because I think her product is wonderful. And I would have charged I would have paid twice as much for for what she was doing. And I bet you, I mean, I don't want to single her out or anything. So I'm not - if you're interested in getting an amazing, beautiful velvet collar and matching velvet lead for your dog, and you're in Australia, I don't know if she sends to overseas, you can DM me on Instagram, and I will give you her details because it's they're so beautiful.

 

Meaghan Smith  32:59

You know, this is how people go out of business, because they don't charge enough money to be able to keep their business functioning, and in a way that you can function in your business. Because if you're stressed and struggling, how can you deliver an amazing product? Right? It's hard, it's so hard. And it's from such a place of struggle. And that doesn't serve you and it certainly does not serve your clients. I hope that today's email has given you lots to marinate on and think about. If this is something that you want help with, I can help you with this. Okay? I've helped many of my clients increase their prices and also get their first clients. So I would love to be able to help you with that too, if you resonate with me as the kind of person that you would like to work with. And the way that you can work with me is by going to my website moneymindful.com.au and signing up for a consultation. And that's where we work out whether we're a good fit or not, and that if I can really help you get the results that you want. And I let you know either way, like if we're not a good fit and I can recommend you to someone else, I will, I do that. Okay, my friend, until I'm in your ears again next week, you have a beautiful week. Bye Bye.