PRICING: How Do I Know What to Charge?
Entrepreneurs, small business owners, and sales leaders ask me this question more than any other.
Am I charging too much or not enough?
These are important questions! And even savvy professionals must learn the skillset to find the line—the number that doesn’t leave anything on the table and doesn’t price you out of the opportunity.
I’m going to approach this question from fundamental principles that apply to any business. The first thing I'll do is realign the question because the focus is off, at least initially. Before talking about price, we must first understand value.
Your offering’s value.
There truly is a market for just about anything with wide ranging price points. Think of The Dollar Store and Bergdorf Goodman and everything in between. These two retailers supply some of the same things. But not all of them. And not of the same quality. So, they are valued differently. A pair of socks at The Dollar Store will be priced very differently than a pair of socks from Bergdorf Goodman. They’ll both cover your feet but you’ll be paying for very different socks!
The answer we’re looking for is more about the value of your solution and the competitive environment you’re in. Often entrepreneurs use a trial-and-error method when setting rates or pricing. Through trial and error, you’ll certainly find your fit sooner or later. And, there's trial and error, or experiment, in all of this! But, it might take some time to find the sweet spot. And it could be costly, leaving revenue on the table, draining resources, and putting viable prospects in the rearview till another opportunity with them comes around again.
Here's where where knowledge is power. Do some homework to help reduce that trial and error time, position yourself with a clearly articulated value proposition so you can confidently align your pricing and hit the ground running!
Learn exactly where your solution fits within your competitive landscape. That clarity sharpens your target market, messaging, sales strategy, and understanding of the segment you serve.
Know what your ideal clients value most—and what they pay for it. Study who they're already buying from to understand proven market pricing and expectations. Then decide where your solution belongs: premium, middle market, or essential. Each serves a different buyer, demands different messaging, and competes on different strengths. Set your pricing accordingly.
If you're offering advice and intellectual capital as a consultant or advisor are you lumping your business in with others when you really have stand out credentials? A broad niche can place you in a competitive set that doesn't accurately represent your experience or value. For example, a writer who specializes in executive speeches or messaging strategy shouldn't compete with every freelance writer, or AI platform! Their expertise is elevated. The better you define it, the better prospects will understand your value—and will be willing to pay for it! If you're a Business & Life Coach (ahem), you could lump yourself in with anyone who's been certified. Your yearslong experience leading sales organizations, negotiating high-value contracts, earning top-producer status, or building a reputation for integrity and lasting client relationships—sets you apart! This distinction can and SHOULD be reflected in your pricing model.
There’s another aspect to consider…If no one else is doing what you’re doing, and you’re first to market, you have an added mission. Namely, you need to find your early adopters. Then, you’ll educate them on how your new solution will help them and why they need it. Only then can you start selling. This is a heavier lift than serving a known market with clearly defined needs. It’s often why we see followers in the marketplace do better faster than the first one in. That’s because the first one has already educated prospects about solutions and benefits to be gained by the new offering. There is upside to both:
Entering an established market means the road has been paved. You don’t have to pave it; it’s already there to use.
Being first to market may be more cumbersome. But remember, we say Kleenex, ChapStick and “Google it” for a reason. Done right, the first often leads the way in brand awareness, market share, and may secure the nomenclature as well!
When you do this kind of research and analysis, you’ll uncover your best positioning strategy, your best prospects, and how best to price your offerings to ensure your business thrives and your clients buy!
You also get another important benefit.
You gain invaluable confidence and authority earned from growing your knowledge and expertise of the players in your industry. This kind of expertise isn’t necessarily discussed. But it’s felt. Felt by you, your team, and by your prospective clients. You’re on your way to becoming a Trusted Advisor and a valued business partner for your clients, no matter where your solution sits in the market ecosystem.
No matter what you charge.
And, I'm here to help!
~Joyce
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