16 Feb Profitable pricing, without the angst
Profitable pricing, without the angst
Blog post by Brook McCarthy
16th February, 2023
Over the last 15 years that I’ve been working closely with business owners, “what should I charge?!” is a constant refrain.
Most soloists and owners that I’ve worked with find pricing their offerings to be complicated at best, and angst-ridden at worst.
I believe our problems with profitable pricing is a significant reason why entrepreneurial poverty exists – why the gender pay gap widens in self-employment, not narrows. Why so many business owners work for far less than they would earn in employment. And why so few exceed the ‘6 figure ceiling’.
But it doesn’t have to be so. The first step to making pricing easier and more profitable is to reduce or remove the emotion.
You are not for sale
We make pricing extremely, unnecessarily hard when we make it personal. And why wouldn’t it feel personal?
Online ‘gurus’ sell their lifestyle as the product. Authenticity has been co-opted, misinterpreted, and cynically rehashed as a cult of personality.
If we’re to smooth out the emotional rollercoaster of self-employment and the peaks and troughs of our profitability, we must create some separation between ourselves and our businesses. We must sell our system, our process, our outcomes – not ourselves.
What influences your earnings
The key factors that influence your earnings, roughly in order of most important first, are:
- Your marketing and sales skills
- Your brand positioning
- Your assets and IP and your ability to leverage these
- Your business model (high volume of sales at low prices; low volume of sales at high prices, etc…)
- Your systems, support and organizational prowess
- Your industry (to an extent)
- Your self-confidence and resilience.
Communicating value is an essential responsibility of business owners. Our offerings won’t sell themselves, value is not self-evident, and telepathy isn’t a reliable marketing strategy.
Learning how to effectively communicate the value of our offerings is a key business skill that we must learn.
We communicate value through our branding, website sales pages, sales calls and conversations, video, or however you prefer.
Investigate what you are *actually* doing for clients, regardless of what they’re paying you for, because what you’re *actually* doing is worth so much more than what you think you are doing.
Pricing as positioning
Your pricing is one of the key elements that signals quality to prospective clients.
When you and your competitors look the same, commodification occurs, which means that the market starts squeezing you on price. When you render your competitors irrelevant, you’re not competing on price, and people will line up to buy.
Don’t price your offerings by plagiarising your competitors’ prices, or you’ll enter a race to the bottom.
When you charge a price that challenges you, you’ll step up to meet it, editing, iterating and continually improving what you do to deliver the highest value with a remarkable offering.
Choose ease over struggle
Pricing profitably, negotiating skilfully, actually enjoying sales conversations with prospective clients, and powerfully articulating the value of your offerings are all learnt skills. Nobody is born knowing these.
Don’t compete on price. It won’t communicate your value. Create something remarkable, invest time, effort and funds into communicating this through your marketing, branding, and sales process, and hold something back to deliver surprise and delight. Profitable pricing can be easy, if you let it be.
Want to learn more?
One Roof members can learn more by watching the recordings of two masterclasses I’ve hosted with One Roof.
Pricing Confidence: Better Pricing with Half the Angst – In this session, I uncover the key pillars of profitable pricing and communicating your value. Looking at both the psychology of the buyer as well as the psychology of you, the business owner, we reference neuroscience principles, behavioural psychology principles, and fundamental common sense, to break down the building blocks of effective value pricing.
Redefining your Relationship with Money (so you can make far more) – In this session, we reevaluate what success is and guide you to create a Profit Plan that will help you get to your ‘elegant sufficiency number’.
About the Author
Brook McCarthy is a business coach and sales and marketing trainer with a background in Public Relations. Over the last 15 years, Brook has worked closely with values-based business owners to grow their professional reputation, in order to attract (far) more ideal clients.
The Founder of Hustle & Heart, Brook runs online group business coaching, one-to-one coaching and public courses.