Teachers in Business

The 3 MOST common Reasons Your Pricing isn't working - and how to fix them NOW

May 04, 2021 Sara Torpey Season 1 Episode 24
Teachers in Business
The 3 MOST common Reasons Your Pricing isn't working - and how to fix them NOW
Show Notes Transcript

Is pricing your nemesis? 

Does it take an insane amount of your brain space (and maybe steal your sleep)??!

 No. More. 

Today I'm going to talk about the three most common reasons your pricing isn’t working. 

I'll share how it LOOKS in your business and life, as well as what's ACTUALLY going on. 

From there I'll explain what you can DO about each one so that you can get OUT of the pricing-drama trap right now, now and forever more.


Welcome to Episode 24. This week, we are going to talk about the three most common reasons that I see that people's pricing isn't working, where you're not selling, where you're like constantly changing your pricing, and how to fix these issues. This episode is brought to you straight up as a request from a member of my Facebook group. She and I had a quick conversation a couple of weeks ago about an issue she was having with her pricing, and we worked it out. And she was like, Man, you got to talk to people about this. And I hadn't even really thought about it. So this is what we're going to talk about today. What I forget is that this is something I talk about a ton, with clients with potential clients with come with people in my group. And it is one of the most common worries I hear from people who are business owners, whether they're friends or colleagues or clients or potential clients or whatever. Pricing is a thing, right. So today we're going to talk about the three most common reasons pricing isn't working for you, or really, that you feel like it's not working for you because it may actually be working for you. And then we're going to talk about what to do about them. And how you can get out of this particular trap this cycle of crazy related to pricing now and basically forevermore, like we're going to close this loop and move on to a new loop because there's plenty of other stuff to worry about. This doesn't have to be the forever one. Before we do that, let's talk wins for a second because I have a couple of fun things I want to share. I have been interviewing clients lately in doing some video testimonials with them. And you'll be seeing pieces of them in the coming weeks mostly as post some polling text. But what's been the most fun part about it is hearing directly from clients that I've had for, you know, some of them for shorter periods, some of them one of them for years, what the biggest changes and growth they've seen in the business in their lives are from their perspective, because I hear it but not not like this all the time. And what's been really interesting for me is that many of the things that they've brought up as, like the thing that made all the difference are things that like wouldn't have occurred to me. I've just been really surprised by the examples that they brought up as the things that really made all the difference. In they're all important things. I just, I don't know, I don't we all don't know our impact, right until we ask. So one of my favorite examples is from one of my clients, her name's candy, and she has been working with me for 18 months a little longer, maybe one of the things she shared with me is that the biggest change she's made is in her workday length. So what she used to do is sit down at her computer at 8am and sit there until 6pm and spin and spin and spin. She would like forced herself to work, even when she only had a couple hours of work to do. And then she would be frustrated by the end of the day. Because she felt like she didn't get anything done. Because she wasn't sure what she was doing with their time. And it was just this huge cycle. And one of the things we did quite a while ago is we we shortened her work day. If if she had three hours of work to do, she was gonna do three hours of work and then go do something else. And I didn't realize until she shared it with me What a big difference it's actually made for her. It's a simple thing, but it's not a simple thing when you're in it right? It's not actually too simple to see or do when it's your life. So that was that made my month. The second one is from one of my former clients name's Melanie. And this one really stopped me because it was small but really big. At the same time. When we were talking about how she's grown and changed. One of the things that she shared was one of the most important things that she's learned is to start to listen to herself first. Wait, like, what if you listen to yourself first. So it used to be that she'd go to the internet into the Google machine into the Facebook and ask all the people for all the opinions. And early on. I gave her some journal prompts to work with around this. And one of the things she shared is that she still uses them sometimes like this was well over a year ago like I find that amazing. Made my also made my month. Not every day does she do that? But now she has a way to check in with herself and listen when the world gets too noisy. In that is an amazing thing. I love that she has something really simple like a handful of questions that made such a difference over time. So this is to tell you that you don't know the impact you You are making, I didn't know that those were the things that made all the difference for my clients, you don't know how you are making a difference for people know that you are, right. That's the lesson here. For me, it's also for you so on to advance and pricing, I promise, there's not a lot of math here. Pricing is a place where business owners spend a tremendous amount of time and energy, it's always a question feels like a moving target. And oh my goodness, the spinning that happens here and the outlay of energy. And to add on top of it. If you're like me, and you were a teacher, at some point, this whole layer of pricing is novel in so many ways. Because as a teacher, as someone that went into the world to be a teacher, you know, no one shows up to teaching for the money. It's just not why we're there. And it's not what we get. So this idea that now I'm going to go out and help people and I have to figure out how to charge them. And I have to feel good about it. And oh, my God is a huge shift, right? Because you got paid as a teacher, but like someone deposited money into your bank account every two weeks, it was a salaried role. And now you have a business where you want to make money, but it competes with this idea of wanting to help, and you give too much away for free, or you can't settle on a price. And it changes all the time. And there's just all these money, thoughts, and oh, my goodness. So there are three ways that I see this go wrong most often for people. And we're going to take them one at a time, we're going to talk the problem, and the solution all at once. Mistake number one, and you may not like this, but it is the truth is that you are focused on affordability. So let me I hear you and you're thinking, but Sarah, I want people to be able to pay for the thing that I have for them, I want them to be able to afford it. And I get it, I do. But the problem here is that affordability is a judgment. What you're doing when you're saying I want it to be affordable, is you are judging the value of your work for them. And often we judge our value as lower than it should be. So what's affordable to me, what's affordable to you what's affordable to your husband, what's affordable to your best friend, all different, right? You know this. But when it comes to pricing and the other direction, we get this affordability thing stuck in our head. When you focus on affordability, what you're really doing is focusing on yourself, you're focusing on what you might be willing to pay in, we're making it about you, which is not the point of your business, probably it's not to serve you, it's to serve other people. The other thing that's happening when you come at this from a place of affordability is that you're by default from a place of scarcity relatively, even if you don't notice it, I want it to be affordable for my clients is often code for I don't want it to be too expensive, which quickly heads down a slippery slope to I'm afraid if I made it cost more people wouldn't want it to charge less and make it easier for them. And actually, that doesn't help. It just makes it worse in so many ways. lowering your prices doesn't solve the problem, because this is not the actual problem. The issue, and you really have to onboard this truth first. This is the key to a lot of this is that people are willing to pay for what they value. If it is valuable to them, they will pay for it. And if you are stuck in the affordability loop here, what you are really questioning in the end is value. You are questioning whether what you have is valuable to other people. You may feel good about it at a certain price and not another. But ultimately, if you're dancing around affordability, it's about value in the end. I've done this with tons of people, it's 99 times out of 100 where we land if you aren't sold on your value to them. If you haven't fully decided in your heart that what you have is worth charging whatever amount of money for you're not going to be able to settle on a price. I know you don't want to hear and it's okay. But the way to stop stressing about affordability is to tie in to the impact of what you do. If you know the impact if you know and not the impact but the value right? You're not going to know what it actually changes in their lives. Just like I didn't know the impact on my client. All the Way, what I know what I give to them is valuable even if I don't know exactly how you have to tune in to the impact of what you do. If you know it will solve their problem, you know, in your heart, heart, heart, heart heart way in your toes, if you know it will solve this problem for them. Of course, people will pay for it. Of course, they'll make it worse work. And of course, this does not mean quadruple your price. It's different to think I'll charge $1,000 because it's affordable. And I think people might be willing to pay for it. Versus I'm going to charge $1,000, because it will change their everything. And it is the best deal since sliced bread. $1,000 can be a little or a lot. It can be either everybody's going to have a different perspective. But what matters is your energy and your belief in it. In your value. You believe the amount you're charging is enough? is life changing? Like if the work you're going to do together? is life changing than the amount you charge? The people that want that change will pay it? This is true. I see this over and over and over again. Please, no, you have to be sold. First, you have to believe if you know you're making all the difference, start there. And if you're like, well, but will it be affordable? the missing piece here is value and it starts with you people cannot value what you have. If you do not. Period. If you're not sure, neither are they that's just the way it is. So Mistake number two that I hear with people all the time is that you are pricing based on what everyone else is doing. Friends, stop, stop looking at other people's prices. Please, please, please, please, please, I beg you, please, just stop. And I know you're thinking but Sarah, I need to be in line with the market. Like I have to make sure that I'm not too far one way or the other. I don't want to be out of step all the things. But you know what? The market is wider than you think it is. It is coaching as an industry is a wonderful example of this. I know people that charge $1,000 for six months of coaching. I know people that charge $20,000 for six months of coaching, I know someone that charges $25,000 for six months of coaching, I know someone that charges $35,000 for a year of coaching. And I know people that do it for free, the range is huge. You don't have to worry about being out of step you really don't. What you have to worry about is, is if it works for you and your clients and you believe in it. Here's the real problem when you're looking at what everyone else is doing. When you're pricing based on what everyone else is doing is what you're trying to do is fit in at the same time, you're trying to build a business that stands out. So you're coming into this conflict, you're building a conflict that you don't need, you're trying to stand out from the crowd, and then you're trying to price to fit in. And that just doesn't make sense. It doesn't matter what they charge. It just doesn't. It matters what you feel good about. So how do you get out of this trap? You ask yourself three questions. The first one is what is the value in dollars of what I'm offering. really sit down in line and out. Think about the individual kinds of things that you do with people and give it $1 value. And like undersell yourself, whatever. So a good example of this is I have a client that I was talking to not long ago and she was thinking about lowering her price. She has a membership. We went through and did this exercise and it turned out that when we went through like she does this with remember she does this with remember she has a monthly call. She has all these things that she offers classes in her membership. One on One sessions, all of these things, it was quite reasonably, something like 18 $100 a month worth of value. And she was charging 300 something and thinking about making it less doing this exercise at the end. She was like oh no, it needs to be more. Oh no, she was making she was telling herself that she was charging too much. Because she hadn't looked at the value of each piece of what she was doing. She was really valuing based on one part of her work. And all sudden when she saw the whole picture it was like oh, holy cow. The second question is what feels good to charge? Like what feels good to you? Is it $1,000? Is it $300? Is it $50? Here's the thing here, it should be a little uncomfortable. It should be something you believe in the value of. But you know, as well as I do most of us undervalue ourselves. So if it's $50, try 75. If it's $1,000, tie it, try 1200 see how you feel with it? And the third question is, how many yeses? Do I need at this rate to reach my goal? You have a goal for the year for the quarter, for the month for whatever, if you got if you decide if your goal for the end of the year is $50,000, and you decide your price is $1,000 per customer or whatever, you need 50 clients? Is that? Is that a sane thing to do? Depends on your business. Right? But if you use this, how many yeses Do I need as a checkpoint? You might go like, Oh, yeah, like, that's totally possible. Hold on, that makes sense. or whole, hey, I can't have 500 clients like that doesn't make sense. It's a good test. Notice here though, in these three questions, the value of what you're offering, what it feels good to charge, and how many yeses, yeses, do you need? At no point? Did I ask about anyone else? anyone else's business? Or any judgment, any opinion based on your own? I also didn't ask you what felt reasonable or realistic or any of those other crap? Like those are all judgments? I don't believe in any of that. That's not what we're doing here. What's the value of each thing? what feels good knowing that to charge? And how many yeses? Do you need, like dial it down to the math and let's be real about it. The third mistake is, is running in circles and undecided. So never actually getting a price and sticking with it. You if you've you know if I've done this, I have so many clients that have done this, ultimately. So it sounds like this. It's like, Okay, I'm going to charge $1,000 maybe it should be 800. And then the next week, it's 800. And then oh, maybe it shouldn't be like 950 may wait, maybe I'll make it like 997. Or it's just like wobbles around, even if it's little tiny bits. It's like, you decide you undecided, you decide you undecided. Ultimately, most of the time when I hear this from people, it comes down to the problem as you don't want somebody to tell you no. Nobody likes to hear no, but it is a part of the game. Not everyone is going to pay your price period. Ever, no matter if your price is $5 or a million dollars. There. It's not not everybody's gonna say yes, it just is. And honestly, if you're charging $5, and everybody says yes, you are going to regret half of those people. Because most of those people won't be bought in and you'll be frustrated. So if your price is a moving target, more often than not, it's driven by fear. You are not willing to be disappointed. You don't want to hear no, you don't want to have somebody not like your price you want it to be for everyone. Deep down, you may not think so. And that's okay. And maybe it is something else. It's not a perfect science here without a one on one conversation. It's hard to tell. But you know, I have this problem sometimes where I'm like, who but what if they say no, maybe I'll just make it $500 less. And then I have to go back and be like when people say no, I catch myself here. This is the problem I have all the time. So no matter what your price is, there is always going to be someone who thinks it's too much. Period. And then I constantly have people that are like you're not charging enough. What? So no one's happy, ever. Like you just have to get behind your price. I have a client who is a really good example of this. Here's the thing. She when she first came to work with me, she was way under charging. She kind of knew it. I knew it. And it kept like wobbling around. She has an hourly rate. It was like $50 and $60 and $70. And it was all these things was 90. For some people. It was different for everybody. It became really clear to both of us that it was too low based on her work, the value she gives and her goal. So we basically doubled her hourly rate. And for the first few millions that she worked with me We came back to pricing every week. We talked it and we rehashed it, we rehashed it, but she committed to it. One of the things I asked her to do was to commit to it for a period of time and just try it and just get behind it. And then we could reevaluate, but we needed data first. And what happened is that nothing changed, actually for her Except she made more money. What she shared with me not too long ago was that clients are now saying yes and no to her at the exact same rate they did, when her price was half as much. She just feels a ton better about the work she's doing because she feels like she's getting the right value. So she converts about 70% of her clients she connects with who asked for consults. And now she just makes twice as much to do it. Like she's still getting the same number of inquiries, she's still closing about the same amount, sometimes they're taking a little longer, but not much longer. And so it turned out that she was worried about people saying no, and it was going to be a big deal. And, and she did get some feedback that her price was high. And those people still agreed to work with her. It turns out, there was no fear here, there was nothing to be afraid of. So for you, if this is a place you live, the key is commitment. You pick a price, and you commit to it, it becomes the floor of what's available. Like imagine it like the concrete basement floor, there's nothing underneath there, that's as far as you can go down. And then you tell your brain in no uncertain terms that there is no discussion at about this price for X amount of time, often I have people commit to it for three months. But it depends. Sometimes it's six. It's okay, commit to it, like it's not a forever thing. And it's the floor. So if you get all this demand, you can raise it, but it can't go any lower. It's the thing you're going to try for 90 days, 90 days in the grand scheme of geologic time, and life is not that long. You can count the nose, you can count the yeses. What you can tell your brain though is you can't change it, you can't even talk about it. For 90 days, just done. Turn off that drama. And the key is you may have to read decide this every day. Like I'm not changing this again. Moving on. It's okay. The other thing you can do is count nose, if that makes you feel better. Like brain, we're not going to talk about this again until 15. People say no, because it was out of their budget. And it becomes really clear. I don't love that way as much. Because knows lots of people tell you out of budget, and it does not exactly what they mean. So it's a little tricky that way. But the key here is to commit to a marker, get behind it, do the work on the value, do the work and decide today the price is X amount of money. And that's the price now and forever until it becomes more. It doesn't become less at all period. Okay. So these are three areas where pricing goes wrong. Sure there are others. Yes, there are ways that might not fit you. But there's definitely food for thought in here, right? These are the three most common issues. But I certainly know that situations are different. If this does not answer all the questions you have or you find yourself really stuck here, and you want to work through it. Please reach out. I'm happy to chat with you about your circumstances and how to approach this for your individual business. Everybody's different. That's the key. If you have thoughts about this that you want to share your questions, whatever send me an email, you can send it to sara@torpeycoaching.com or come on into my Facebook group, which is called Teachers in Business or Lincoln messaged me whatever floats your boat. And if you think pricing is your big hurdle and you want coaching on this, it's quite possibly one of the things you know, you could be like my client who's now charging, double and making twice as much doing the exact same work and happier. Let's talk about coaching. I can help you do the work to be solid on your value. Decide what your floor is keep your commitment to your pricing and keep it that way for the long term. The client that's making twice as much now for the same work is not questioning her brace anymore. This is not the issue. This doesn't have to be an issue spend any more time on. So if you want help, send a message. Let's talk about it. Have a great week.