If you’ve ever agonized about what to charge for your services—you’re not alone.
It’s one of the most common questions I hear, and when you’re in a service-based business, deciding what to charge can be hard.
If you’ve ever wondered: “What should I charge for this service or product?” —You’ll love these 5 key factors that you need to account for to determine your pricing.
There are so many factors that go into your rate and packaged prices if you’re a service-based provider like a coach, consultant, yoga teacher, holistic practitioner, nutritionist, etc..
Here are 5 key factors to be aware of when deciding what to charge:
What you charge is about value and not just the amount of time of a session.
Value is one of the most important parts of the equation when determining your rates.
As a coach—if you want to charge more—give more.
Take a look at scenario 1:
Mary books a single session with Coach Andi. Coach Andi gets on the phone, gives one hour of her time, and since the Coach has very little information about Mary, Mary finds herself spending most of the session talking about the problems and little time is left to figure out stellar solutions.
Now, take a look at scenario 2:
Mary books a single session with Coach Bonni. Coach Bonni gives Mary an in depth assessment form so that she can learn about what Mary is struggling with and what she wants to work on. Coach Bonni spends about an hour pouring over Mary’s application and coming up with a few key ideas she knows will help Mary, and gives Mary some suggestions even before their session. Once the session takes place, things are flowing at an accelerated rate since the Coach already knows what Mary is struggling with. Basically – they cover more than double the ground of Coach Andi. Then, Coach Bonni sends Mary a recording of their session, follow-up notes and follows up post-session to see how Mary is doing and offers more resources to support Mary.
Now—Imagine you’re Mary: which Coach do you want to see?
And would you be willing to pay Coach Bonni more than Coach Andi?
I know I would! So when determining what to charge for a session, recognize that what really matters is what the client gets out of the session. A session is not merely the one hour spent together (unless it is—but as you can see the value goes down)
And think about: Would you feel ripped off by Coach Andi if Coach Andi charged as much as Coach Bonni and you got way less value?
Chances are you certainly wouldn’t refer your friends to this coach if they charged the same thing. You’re always gonna’ refer the person that gave you more value.
This is where value’s key in determining your rate.
Now what if Coach Andi charges $100 and Coach Bonni charges $200? Well as you can see Coach Bonni is delivering more than twice the value. Coach Bonni is putting in hours for that single session and delivering more concrete results and powerful resources to truly help Mary move forward. In this case a higher rate is still better value, and Mary will walk away with better results and resources.
This is what increased value is all about.
If they both charged the same amount which Coach would you go back to and refer to others?
Whether you’re sitting in the Coach’s seat or the client’s seat, these are all details to be aware of when you’re buying or pricing a session.
This is also why it’s better to create packages versus selling an hour of your time. A single session can still be a package when you deliver more than the 1-hour of your time. In order to create a valuable experience – think about the little extras that can truly help your client move forward and give them the most for their time and money.
Remember: people aren’t buying time, they are buying the results they crave that you can help facilitate through your service. Your job is to figure out how you can create a valuable experience to facilitate the growth of your client.
And, if you’re business is service-based, the best way to figure out what to charge is to put yourself in the seat of the client.
Put yourself in your client’s shoes.
Think about: If this was you—what would you want to receive for the price tag you’re charging?
What would leave you feeling like “Whoa, that was such a valuable experience—I feel I certainly got my money’s worth. This is somebody I’d definitely re-book in the future and I’d tell all my friends about this amazing experience”
That’s how you want your clients to feel. I mean don’t you like to feel that way?
When you give excellent value—people feel it. People will walk away so pleased with the money they paid that the price tag is a non-issue.
Have you ever paid for something where you felt: that was so good I would have paid even more for that experience?
Think about an amazing vacation, restaurant or hotel experience, or item of clothing. What was it that made you so happy with your purchase that the money felt like a non-issue?
Likely what you received was more than just the item. Often there are feelings attached to an experience – like joy, relaxation, inner growth, self-care—all of these feelings add value to the purchase.
If you can give your client these feelings through your care, advice and presence—people will walk away feeling like they just had an experience that was worth more than just the “face value” of what they got.
I’ll give another quick example:
You can sell a 1-hour private yoga session, where all you give is 1-hour of your time or you can sell an experience by having a pre-assessment to figure out their needs and what areas they really need to focus on. Then you have the 1-hour session which is excellent and unique to your clients needs because you already knew ahead of time exactly what they needed, and then you follow up with a few exercises they can practice at home until you meet again.
Do you see the value difference?
When you increase the value people are happy to pay more. And when you give more value you end up helping your client more! (And isn’t that what you really want?)
It all comes down to value and really giving.
You need to determine—Who is your ideal client?
The whole idea of an ideal client/dream customer is such a large topic I can create a whole course about it, and at least a blog post about it (which will likely happen soon).
There are many factors that go into determining your ideal client, but let’s say this concept is new to you, I’ll simplify it:
Imagine if you could have 1 person buy your service – who would this one person be? What do they do for work? And how much do they earn a year?
Because you know what—this matters.
It’s ridiculous to expect that somebody on a salary of 35K a year would have 25K to spend on a 3-month mastermind program, and yet these programs exist. I mean sure – this person may have a rich Uncle who pays for the program, but this is not going to be an easy sell. Alternatively if your dream client runs a million-dollar empire, charging 25K is totally plausible.
So should we all serve only the richest people on the planet?
I’m not even going to answer that.
Ok, fine. I am 😉
The answer is NO!
If this is the clientele you feel drawn too and desire to cater too—than you should.
But don’t choose a clientele based on profit alone.
Choose the people who you deeply and passionately want to support (within reason, after all you’re running a business and not a charity. If you make enough cash you can then support charities or even create a charity of your own!)
As you can see, what your ideal client earns plays a role in how you price your offerings.
If you charge 1K per session and your client needs 2-4 sessions a month to get the support they need, and your client earns 3K a month – giving up 2-4K/month (depending on how many session they need to get the results they desire) may be possible if they take out a loan – but as you can see it may be utterly out of their zone of reach.
Alternatively if you charge 1K for a month-full of support, then likely your client will be able to pay for this. So, you need to think through your ideal client’s income and what would be a reasonable amount for them to spend and create packages accordingly.
Side note: 1K is still a good chunk of change, but remember: you’re giving exceptional value and are going to truly help your client. Therefore this kind of investment is just that: an investment that will pay them back physically, mentally, and emotionally.
Some high-priced offerings may be worth a loan if it can be justified as a huge investment in the business that will come back many times over. Some business investments do work this way, especially if the offering is for a finite period of time.
For example: if you have a course to sell, or are the creator of a school – many people will be willing to take out a loan to invest in their education since this can be justified as increased knowledge that will directly relate to enhanced opportunities in their lives.
But even then, it needs to be within reason and within the comfort of the ideal person you are making this offering to.
When determining your rate, your skill counts for a lot too. If you yourself have invested a lot of money in yourself, your education, and have spent a lot of time improving and honing your craft, you will likely feel that due to your experience alone, you are going to give immense value.
This is one of the reasons that many coaches raise their rates over time. As you get better at what you do – you’ll have the confidence to know that you’re giving even more value faster.
At some point (if you continue to raise your rates as your expertise increases over time) you’ll either have to look for higher-end clientele, or cap your price at a certain place if you keep the same ideal client in mind.
Alternatively, you may need to find new ways to leverage your expertise so that you can still help people in a certain price-bracket.
For example, retreats, group coaching, masterminds, and courses are all ways you can leverage your time and share your skill while keeping your prices in a certain zone that your dream client can afford.
For example if you have a group workshop and charge $50 but 100 people come – as you can see THIS is what it means to leverage your time! And if you know that you are capping the workshop to 5 people you may need to charge more to make the workshop worth your time and energy!
Whatever you charge, you need to feel good about it.
Because here’s the thing: you never want to feel resentful.
Remember—your price is an exchange of energy.
Yes you want to give excellent value and yes you want your client to feel amazing. At the same time you need to feel good too. If you feel like you’ve undervalued yourself you will start to feel resentful—like it’s not even worth your time. I mean if you charge $25 for a session and spend 4 hours in total on that one session (doing prep work and follow-up) – it’s highly likely you may feel resentful for getting under minimum wage!
And if you know you’re giving a reduced rate – make sure that there are other rewards you can feel good about and place a boundary around your reduced rates. For example, you may give a reduced rate 1 time a year as a special bonus offering to people on your list. Or you may have a few sessions every month that you give at a reduced rate as a way to give back to people who truly cannot afford your whole rate.
Reduced rates need to happen in a balanced way so that you can still feel good about it and not get drained, because if you undercharge time and time again, over time it will wear you out.
Finally, when considering your pricing you need to take a look at the whole picture.
How much money do you need to earn to pay your basic needs and support the business, and how much time do you have a week to see clients.
If you’re a solo-entrepreneur – you likely know that there are many others tasks you must perform for your business to run. That means you don’t have 30 or 40 hours a week to see clients since there are other behind-the-scenes work that must get done for your business to stay afloat.
Remember your time is precious, and especially as an entrepreneur who has so many tasks to do – your time with clients is limited since there are only so many hours available to work with people.
This is where leveraging your time by giving group programs helps you reach more people.
Taking into account the amount of revenue you need along with how much time you have to see clients personally will help when determining your prices and the kinds of offerings you give.
This is where creating leveraged income streams are vital to staying alive as a service-based business owner.
Whether that means creating online digital courses, creating live workshops, events, or group trainings, you need to come up with ways to bring in income in a way that you can charge an amount that feels easy to your client and supports you to stay in business.
Let’s do a mini recap for your pricing strategy:
- Build value into your offering. The more value you give the more you can charge
- Know your ideal client and what they are willing to pay
- Your skill—which builds over time will play a role in your pricing
- Make sure YOU feel good about it. Money is an exchange of energy. If you don’t feel an even exchange you will feel drained and this can cause burnout
- Know how much income you need to stay afloat and how much time you have to work with people individually. This will help determine your price along with creating other group programs so that you’re not merely getting paid for your time. This is why having multiple revenue streams such as group programs and courses along with individual consulting in order to leverage your skills, and help more people.
This is officially the longest blog-post I’ve written to date! I wanted to lay it all out for you, (and there’s still plenty more I can say 😉
If you’ve made it this far I’d love to hear from you: Was this helpful?
Then, tell me in the comments below which key was most helpful, and share 1 pricing strategy you love to help you come up with your prices.