When the “Product” is their brain, a question I am frequently asked is, “How should I price my expertise?” You see with product-based businesses, it is pretty easy to have a reference point for price. Most often you are given a Manufacture’s’ Suggested Retail Price (MSRP). However, you need only take the cost of goods (COGs) and choose your profit margin percentage to charge above that cost. Of course, there are other pricing strategies but there is a clear start for pricing products. When it comes to offerings provided by entrepreneurs and coaches, most have a hard time coming up with their COGs because the “goods” is their expertise. Products most often involved are digital products, which again, are born from their expertise.
Although the “charge your worth” squad would have you believe that you can charge whatever you want out the gate, there are many considerations for pricing services, to include:
- Where are you in the competitor rankings from least experienced or least known to most experienced or most known?
- What are your competitors charging in your ranking group?
- How much is the particular audience that YOU attract willing to pay?
- What is included above or below what is usually included with such services?
- Have you gotten results that have produced testimonials that you can share?
These questions are factors into how you price your offerings. But there is a framework that ALL service providers can start with as an internal reference point and that only needs the answer to one question, “How much value does the end user get?” The usual price grouping for offerings is low priced, mid-priced, and high priced.
In this model, as services ascend the offering ladder to a higher price, the more value the client receives. The price ranges are subjective. Low simply means the lowest prices for your collection of offerings. For some, this is a digital product that can be as low as $.99 but others it can be a Pick Your Brain sessions at $297. The determining factor is usually the amount of the high-priced offering. For example, if the highest priced offering is $500, then the mid-priced can be anywhere from $100 to $250 and the low-priced offering anything from $50 and under. However, if the highest offering is priced at $20,000, then the lowest offering is less likely to be priced at $100 or lower. Common price ranges are:
New Experts (just starting their business) – $0.99 -> $50 -> $150
Experts (in business 1 to 3 years) – $50 -> $300 -> $600
Micro-Influencer (actively in business & visible 3 to 5 years) – $300 -> $600 -> $1200
Influencer (actively in business, highly visible as the go to expert) – $1,200 -> $5,000 -> $10,000
Value is not only defined by what information is included to get them to the desired results, but also how much access and support is included to make sure they achieve the desired result. If a digital product is your low-priced offering the only access may be an email address for technical issues with downloading your purchase. If your low-priced offering is a Pick Your Brain session, then they get one-on-one, live access to you only during the session. A common mid-priced offering is a group offering (e.g. group coaching, mastermind, workshop, etc…) or an on demand course with group support (e.g. group question and answer sessions, group live bonus trainings, etc…). In the mid-priced offering range the beginning end of this range may only get email support and the end of this range gets some kind of shared/group live access to the expert or the expert’s team. Often the high-priced offering includes one-on-one access or group access to higher value information with supplemental support (e.g. more check-ins, guest experts, and/or project management systems for tracking, accountability, and ongoing communication).
There are a lot of things to consider when pricing your offerings. There is still more information to consider when pricings. Check out the Entrepreneur Magazine article HERE. The biggest thing I want you to apply is to charge what the audience of potential clients that YOU attract will pay and give them the value that they are paying to get. Should you need help, let’s talk about it. ShaCannon.info/talk
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