Stop pricing your services as if everyone buys like you

Pricing services can be difficult when you aren’t a pricing expert and especially when you are the one delivering the service. When you aren’t confident with pricing it can mean you take crazy approaches such as copying your competitors, asking Ai, crowdsourcing or just thinking about what you would pay. Not everyone buys like you and assuming everyone does when pricing your services will be costing you money. Keep on reading to find out why you should stop pricing your services as if everyone buys like you.

 

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STOP PRICING YOUR SERVICES AS IF EVERYONE BUYS LIKE YOU

 

Not everyone buys like you. ‘I wouldn’t’ doesn’t mean ‘they wouldn’t’.

 

One of the biggest mistakes you can make in business is assuming that everyone buys like you. It’s an assumption that impacts the offers you decide to sell, the prices you set and the way you market your business.

 

Making the assumption results in some business owners avoiding certain types of marketing because they don’t like it. For example, I’ve been told by so many business owners they hate sales emails so they don’t send them. Yet email marketing is a very popular and powerfu way to generate sales. Even when there is proof that a type of marketing works they let their own preference dictate a business decission.

 

The assumption that ‘I wouldn’t so others wouldn’t too’ also impacts pricing choices. Many business owners base their pricing on what they would pay. As a business owner you have to realise that just because you wouldn’t doesn’t mean someone else wouldn’t (and vica versa just because you wouldn’t doesn’t mean someone else will). People are different. What is expensive to one person is cheap to someone else, and people also have very different priorities regarding what they will and won’t spend money on.

 

 

The danger of thinking “I wouldn’t pay that”

 

As seen assuming that everyone buys like you can have a negative can effect how you market your business and how you price your services. With pricing it is especially dangerous to think “I wouldn’t pay that”. The moment you think that it is easy to think others wouldn’t pay that either. This can result in your not raising your prices as high as you should be and it can also mean that you don’t offer a premium or VIP options.

 

 

Why people are willing to pay more than you would

 

We live in a world where people are living in drastically different financial situations and value different things. Something that is expensive to one person will be cheap to someone else. And even if two people are in identical financial situations because of personal values what they are willing to pay is different.

 

When you think about it it’s not too hard to find examples to proof this is true. There are lots of examples where there are tiers of a service and some will pay but others won’t. For example, when flying you could have the choice to fly Economy, Business or First Class. Everyone will get to the same destination at the same time, but the experience on board is different. Some people are willing to pay more for a ‘better’’ experience, whereas other people who technically can afford the ‘better’ experience will decide it’s not something they want to spend their money on.

 

What people are willing to pay for a service will depend on their values and because people have different values what they are willing to pay will different. Here are some examples of what some people value and are willing to pay more:

 

• To save time
• For more conveince
• To be the first
• For direct access
• For exclusivity
• To be more comfortable
• For more flexibility
• For certainty
• To access “the best”
• For peace of mind

 

If you look back through the list, the likelihood is some will jump out as things you value and are willing to pay more for, and others where you aren’t as bothered. And then even if, on the whole, you have preferences there can be certain situations, or in relation to certain things, where your preferences change.

 

PERSONALISED ONE-TO-ONE MENTORING TO HELP YOU SUCCESSFULLY GROW YOUR BUSINESS ON YOUR TERMS Pricing is just one area where thinking everyone buys like you will be holding you back, and all so often you can’t tell where your own assumptions are impacting the business. My one-to-one mentoring provides you with a strategic partner to not only help set the strategy for your growth, but challenge your ongoing decisions to ensure you are being the strategic CEO your business needs. To find out more about my 1:1 mentoring, click here.

So you’re ready to stop pricing your services as if everyone buys like you, but what should you do?

 

Hopefully by now you can see why you need to stop pricing your services as if everyone buys like you, because not every buys like you and that means you are very likely to be leaving money on the table.

 

So what should you do instead? Rather than assume you need to test. The reality is until you try you won’t learn what people do and don’t value, and what they are and aren’t willing to do.

 

And there are two very specific areas you should test.

 

Pricing Test 1: Your Regular Prices

The first pricing area you should focus on is your regular prices. Go through everything in your offer suite and consider whether you could increase the price. To do this you can have a look at competitor’s pricing to gain an understanding of what others in your industry are charging. This research is to give you information not for you just blindly copy because copying your competitor’s prices is a dangerous pricing strategy – as I explain here).

 

Then you can think about your brand positioning. Your brand positioning and pricing should be aligned. If you have a budget brand and premium pricing will feel off, but if you have a premium brand then even if someone isn’t willing to pay it they’ll still think the pricing makes sense.

 

Next you can consider the value factors. Think about your service and which of the value factors does it meet and what increase someone who values those factors would be willing to pay.

 

After doing all this you should be able to come up with a more considered price, but obviously you’ve still made assumptions so then it’s time to test and the only way to do that is to put the price out there and see how people respond. If you are selling on a website change your prices on your website. If you are selling on calls quote your new prices on your next calls. And then assess what happens.

 

You’ll want to be looking at your conversation rate now versus before.  It is common when prices go up for demand to go down. But depending on the level of decline that might not actually be negative for your business. Depending on the increase it can be that even with fewer sales you still generate more revenue and if you haven’t changed the service it should mean the service is more profitable now.

 

Pricing Test 2: Premium Options

 

In addition to testing your regular prices it makes sense to look at introducing, if you don’t already have, premium options. By adding in  a premium option you are giving yourself the opportunity to really experiment and see what happens. Look back at the value factors mentioned earlier and consider how you can add a premium option.

 

Adding a premium option is great because it is a fairlyv low risk way of testing what people are and aren’t willing to pay. You still have the normal option there, with the pricing you have more much confidence around. But you are giving people an additional option so you can feel more free. You might decide to offer something you don’t even think someone will buy and then see what happens.

 

Some common ways that service businesses can add in a premium option include

 

• A mastermind / group programme / membership upgrade where they get private 1:1 sessions
• A VIP ticket for an event which could mean getting a reserved seat in the front section, a pre- or post-even experience, or a goody bag.
• Priority booking access
• Faster turnaround
• Extended calendar availability for booking (early morning, late evening, weekend etc).

These are just some examples, but when you start thinking about what people value and are willing to pay more for the options are endless.

 

What changes when you stop assuming and instead test

 

When you stop assuming that everyone buys like you and basing your pricing on what you pay, and instead think about how everyone is different it will open up you to new opportunities. By testing both your regular pricing and with premium options you can gather real information about what people will and won’t buy. You are able to learn about the price elasticity of your services. And this information will help in the future with new services, future pricing changes and so much more. You might struggle to believe someone else is willing to pay X for Y until you’ve experienced it. I’ve worked with plenty of clients who after raising a price or introducing a premium offer have been hesitant, until the first sale comes in, and then after realising it is possible they’ve had new confidence with marketing and the sales have gone up and up.

 

All of us have money mindset beliefs, which impact what we believe someone will and won’t pay. Your job as a business owner is to remember not everyone believes, and values, the same things as you. Instead you need to give people the option and rather than be led by assumptions be led by data. But you’ll never know if people are willing to pay more if you don’t give them the opportunity to show you.

 

That’s it. You now know why you should stop pricing your services as if everyone buys like you.

 

In so many ways the way you buy isn’t how everyone buys. We live in a world where people are different. They have access to different amounts of money and they are happy to spend money in different ways. Your job as a business owner is to price your services not for you, but for your ideal client. That means stop pricing your services as if everyone buys like you and instead test your pricing. Give people the opportunity to show, with their money, what they are and aren’t willing to pay.

 

If you’ve found this blog post useful, please do let me know over on Instagram or LinkedIn.

 

Pricing isn’t something you set once and forget about it. It’s something that you have to continually monitor, which is why it’s a core part of what I help my 1:1 mentoring clients with.

To find out more about my 1:1 mentoring click here.