(And rob your clients of the results they deserve)

Setting our rates and sticking to them is one of the biggest challenges we face as small business owners.

Here are three pricing mistakes I come across all the time in my work with clients, plus some hot tips to avoid them. 

1) “Offering a low rate will get me more clients”

3 Price Labels With Question Marks - pricing mistakesThis is not true. It will just get you different clients.

Ones who may not be totally committed to change because they have less skin in the game and are less likely to do the work between sessions (which you can’t do for them – sorry) to get the results they desire.

We have a wide range of price points for anything that’s on sale, with people willing to pay at each point along the continuum. This is our money set-point. We might be enticed to go a little above for something special or a bit below for a bargain, but generally speaking we’ll stay within a range.

Girl Smiling With Tea - pricing mistakesPeople will happily pay anything from 90p for a cup of tea in a Greasy Spoon to £30 and upwards in a posh London hotel, and all points in between and it’s the same with your services.

We naturally tend to value more what we pay more for.

And there are people who are not working with you right now because your rates are too low!

HOT TIP: You will not be able to sell something at a price point you’re not congruent with. Find a way to uplevel your money set-point, recognise the true value that you offer to clients (which many of them will describe as priceless) and learn how to communicate that value to your ideal prospects.

2) “They can’t afford it”
Piggy Bank - pricing mistakes

Have you ever been in a sales conversation and decided within the first few minutes that “They can’t afford it, they’re never going to say yes to my full rate”? And before you know it you’re offering a discount or even quoting a lower rate without telling them it’s discounted?
I know you’ve done it 😉

Ever started working with someone at a ludicrously low rate that has you feeling a teensy bit resentful right from the start, only to have them rescheduling the next session because they’ll be on holiday in some far-flung place, or picking up a new car, or flying off to Paris for the weekend?

The truth is, you know little or nothing about their financial situation. They might have an inheritance in the bank, they might have received a large redundancy payment, they might even have a private income of some kind.

HOT TIP: Stop making up stories in your head and making the decision for them. They are adults. Be respectful, present your solution and your (rock solid) price if you’re a good fit, communicate the true value clearly, and support them in reaching the right decision for them. When you do this, you’re truly being of service and giving out the message that they are worth it.

3) “People are not spending in this economy”

If I had a pound for each time I’ve heard this, I’d be a very wealthy woman by now! And it’s so not true.

You only have to spend 5 minutes people-watching in any shopping centre or high street to know there is plenty of money in circulation right now.

Happy Woman Shopper - pricing mistakes
If you’re offering a service or a solution that meets a real need, there are people out there who are willing and eager to pay for it. In fact they’re looking for you right now.

HOT TIP: Drop the stories, practice communicating clearly the benefits of the services you offer and take steps to make yourself more visible to the people who need them.

Over to you

This is just a small selection of the stories we tell ourselves about pricing that keep us under-charging and over-giving.

What stories do you tell yourself? And how do you negotiate a way around them? We’d love to know. Do share in the Comments below.

PS: Here’s a free resource to help you

We all have hidden as well as conscious blocks and beliefs about charging. Some buried so deeply that we’re just not aware of them at all.

Go here now and grab a copy of my free Quiz ‘Discover Your Hidden Blocks to Money & Success’. It takes minutes to complete and what you find might surprise you :-).

Book a free Discovery Session here

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21 Comments on 3 pricing myths that keep you broke

  1. Lots of things to think about Linda, thanks.
    As you say offering low rates gets you different clients. Before I started in business I did some really low cost workshops for members of a charity & all that happened was that a few people didn’t turn up because they weren’t invested in it both financially or mentally.
    I certainly won’t do that again!
    lesley pyne recently posted…From ‘too many’ to ‘childlessness is a gift’.My Profile

    • Ouch, been there, done that too, thanks for sharing Lesley!

      When we’re just starting out it makes sense up to a point to make lower priced offerings to get some practical experience and testimonials under our belts. The trouble is, in those early stages, we tend to make any lack of commitment on clients’ part mean something about the quality of what we’re offering.

      Hope anyone reading our comments here and experiencing a wobble because of this, will take heart. Onwards and upwards, as they say 🙂
      Linda Anderson recently posted…How to stop feeling like a fraud [video]My Profile

  2. Linda, thank you for this informative post. Pricing can be so angst-ridden can’t it. I agree with all your suggestions and mindset shifts needed to ensure we’re actually able to sustain ourselves when working. If I’m wobbling or wavering on the inside, I remind myself that not only will I no longer be able to trade or provide all the free value I do if I cave in on price, but I won’t be in a position to pay it forward either. I’ve used many sole traders for support through my business (from coaching and EFT through to accountancy and web design). It all feeds into the collaborative karma and helps more people just like us to stay afloat.
    Lisa Barber recently posted…How to turn a hobby into a business: the top ten tips.My Profile

  3. It “pays” not to assume and I love the reminder Linda that we need to value ourselves and our work. If someone wants to work with you they will find a way to do so, regardless of the cost. I learnt that it is not sustainable to sell continuously at the lower end of the scale, you’re constantly looking for the next client and marketing relentlessly. Having various price points and services is brilliant, exactly as you said your clients are different, value what you do and are likely to come back again and again. Make’s running a small business scalable and sustainable.

    • Thanks for the reminder that having various price points and ways of delivering what we do is so important, Melanie.

      It’s not just about having a ‘sales funnel’ in marketing speak, it’s also about being able to offer support to people at a number of different price points and making your support available to more people. Love that!
      Linda Anderson recently posted…3 pricing mistakes that keep you brokeMy Profile

  4. Hi Linda, I am so pleased you are championing this issue via your blog. I totally concur with all your points and as an accountant supporting sole traders, I come across the undervaluing and underpricing of services frequently. In fact many actively promote their lower prices, stating that they work from home and are consequently cheaper. All too often these small business owners don’t factor in the overhead cost incurred in time spent marketing through networking, blogging or social media, writing up their business records or fielding enquiries from prospective customers. Ironically they also provide a superior service to those that are not self-employed but don’t reflect their true value in the pricing

    • Hi Karen, thanks for stopping by and joining the conversation.

      You make some really great points here and it’s fascinating to have a perspective from a professional whose business is handling money.

      People often bring the rate-per-hour mindset from paid employment into self-employment and then forget that client contact-time is just the tip of the iceberg. They also forget to factor in all the time, money and energy they’ve spent on training courses and personal development that enable them to be the experts they truly are and deliver transformational work.

      Think I feel another post coming on! Thanks for the prompts 🙂
      Linda Anderson recently posted…Tapping audio to stretch timeMy Profile

  5. Helpful post, Linda – thank you. It beautifully emphasises that money is an energetic as well as fiscal exchange, but I’m aware that I often start by putting a low financial value on my services EVEN THOUGH the work I do helps clients completely transform their lives. Bizarre behaviour on my part! OK … off to change this particular mindset 🙂
    Jo Gillibrand recently posted…Discovering your superpowersMy Profile

    • Glad you found it helpful, Jo.

      It’s one thing knowing logically that we’re doing great work, but quite another to ‘get’ that at an emotional level. I think this is where self-worth and professional-worth often get conflated, particularly for women. Cultural conditioning and all that – and we can change it 🙂
      Linda Anderson recently posted…[Video] Two scary things about self-employmentMy Profile

  6. Yes lovely article Linda and I have certainly ‘been there’ with all three points. I have to keep a check on myself too as I can find myself sliding back into these mindsets all too easily. I like Karen’s comment as well as managing the overheads is an element of my business that I have been looking at re-organising lately. Great article!
    Rosemarie recently posted…I nearly unrolled… controlling email mayhemMy Profile

  7. Hi Linda,
    Great article, thanks.
    I took a decision this year to put up my prices having not done so for some considerable time and also to remove the discount I was offering for paying upfront, but still allowing clients to pay by direct debit.
    I was very nervous that I would lose customers, and even more worried that they’d think I was greedy (gremlin there). Most of my customers have stayed. I’ve had one tricky conversation today, where I was clear about the reasons for doing so and only offered a small concession for a limited time. I do think it’s fair to treat everyone equally and was really uncomfortable in offering something that everyone else wasn’t getting. I also chose to share with the client that I had had to review pricing to ensure that the business continued to run in a sustainable way.
    But it is about valuing your time and the service that you offer. It’s taken a time to get here for me and it’s good.
    Thanks again, Linda.

  8. Thanks for such a timely reminder Linda! Pricing is such a funny one isn’t it. I find that when I’m booked up for several weeks it’s much easier to be firm in my pricing and then if a quiet period hits I start worrying about who might be able to afford to come and the little voices start up again!

  9. This is such an important issue Linda – thanks so much for sharing. I’ve definitely been guilty of all three things in the past and it has taken me years to recognise the fact that for me, ‘not being motivated by money’ actually equated to ‘undervaluing self and creating non-sustainable business’! Alongside an ongoing process of clearing my own money blocks, one of the things that really helped me was the phrase ‘money is just paper love notes from your clients’ – I only wish I knew who to attribute it to because it has made such a difference in my attitude to the money-energy exchange!

    • ‘Love notes from your clients’ – love the reframe, Helen.

      Similar to ‘Money is a token of value and appreciation – the energy of Money is the same as the energy of Love’. Most of us were definitely not conditioned to see it that way! Poverty versus prosperity consciousness – time for a shift in perspective!
      Linda Anderson recently posted…How to stop feeling like a fraud [video]My Profile

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