Have you heard that you should “Charge what you’re worth?”… that in your pricing, you should “claim” or “stand up for your value”?
What does that really mean?
How much is your value… how much are you worth anyway? $25/hour? $150/hour? $500/hour? $10,000/hour?
Does this mean that people who charge more are worth more? Words matter. It shapes how we see other people and ourselves. Connecting fee structures to “worth” sets up a deeply unhealthy comparison.
Are you worth more than someone who charges less? Or are they “worth” more than you?
Truth: You are worth infinity.
You are unquantifiable, because you are a child of God, or a precious human being whose odds of being born are about 1 in 400 trillion!
“Charge what you’re worth” is an insidious lie, started by some high-priced coaches who need to justify how much they’re charging you.
I have seen many people raise their prices (because they’re “worth” much more!) and then they saw their business decline.
Let’s stop using the word “worth” in connection to our service fees.
Here’s a truer, more practical idea:
“Charge based on the market rate.”
It makes sense to price based on what your clients are expecting, and seeing, in the marketplace. Look at your niche mates and what they’re charging. Then look at your needs, as well as your reputation in the marketplace, and price your services accordingly.
Then, you might need to change your pricing, based on what the market’s response is.
There is such a thing as perceived value. If you have a more premium branding and copywriting, people tend to be willing to pay more.
However, before we all rush to rebrand our services as premium, we need to ask: is my branding authentic to how I wish to show up in the world? For me, I prefer to be minimalistic and “among the people”… a “guide on the side” rather than a “sage on the stage.” Luxury branding is not for me personally. However, for some people it may feel authentic.
Let’s look at another common idea:
“Charge what the market will bear.”
What does this mean? You are supposed to charge the maximum amount that your clients will tolerate…
Let’s flip this around and apply The Golden Rule — You are my market. You are my potential clients. How do you feel, if you knew that I was charging you the largest amount you could bear?
This is what many high-price coaches and training programs are doing. They are charging as much as possible to maximize their revenue and profit. (Their justification to you: “If you pay more, you’ll take it more seriously and get more results.” While this has some truth, they are actually using it to justify their primary intent: their self-enrichment.)
I used to do all this. I used to teach it, too. And I’ve worked with dozens of JV (joint venture) partners who all operated from this myopic mindset.
We shouldn’t be surprised: this is how business is supposed to work, right? Everyone is supposed to be out for themselves. The sellers should charge more, and Buyers beware.
Take a deep breath.
Let’s return to a deeper place. Allow our hearts to soften, and remember that we are all in this together. Reconnect to a greater purpose, our higher values.
Then, let us aim to operate in our business to bring forth a more compassionate world…
A few years ago, I underwent a personal transformation, and it resulted in a profound shift of intent and motivation. It changed my business towards authenticity, service, and fulfillment.
Now, I no longer want to charge “what I’m worth” or “what the market will bear.” Instead:
I charge based on Enoughness and Compassion.
Do I have what I need?
And, can I work on lessening my financial needs, finding fulfillment in my inner life and in serving my community?
However, here’s my current financial reality: I live in San Francisco, one of the most expensive cities in the world, and for personal reasons I need to stay here for now. If I lived in Mexico or Thailand (which I might do one day!) I would charge far less.
Still, I already charge less than my peers, and I’m grateful to be able to do so.
In this video I share how I came to my rate, and how you can calculate your own “Enoughness” rate.
Note: that video was made when my business income was dependent on 1–1 coaching, which means I conducted a lot more client sessions, at a lower rate. Now that more of my income is sourced from group programs, I’ve decreased my 1–1 availability, and therefore, raised my 1–1 rate. Most of the time, I recommend either my lower-fee group programs to people, or other coaches who are able to charge less than me.
Am I saying that you should always charge less than your peers? It depends on your needs.
And, the unique service you are offering may be comparable — in the eyes of your audience — to higher-priced services. Can you authentically, with integrity, position your service next to higher-priced peers? If so, then you should, because it’s true.
Another common lie:
“Charge not for your time, but for the value you provide.”
So, if you’re a marriage coach who helps people avoid divorce, how much is that worth? Or an occupational therapist who helps a person recover their ability to work again. How much value is in that?
Either scenario could be worth hundreds of thousands of dollars or more. It’s ridiculous to price your services “based on the value you provide” and your potential clients will think so too.
Again, start at the baseline of the market rate. The market rate is the audience’s vote for what a service is “valued” for. Let us not use some arbitrary “this is valued at…” number.
Compassion in Pricing
The other factor I follow in my pricing is Compassion. We’ve all had the following 2 experiences:
Experience 1. We love a service, and we feel the pricing is so affordable. “This is SUCH a good deal. I would be so happy to tell others about this service!” We feel relieved by their pricing… grateful… and we become advocates of that business. This is reciprocal compassion at work. The seller charges compassionately, and the buyer actually feels they want to take care of the business’ well-being, by adding gratuity (an expression of gratitude) or spreading the word.
Experience 2. We would like to buy a service, but we see the price and we feel sticker shock. We think “wow, they charge a lot…” As we think about making the payments, we might feel stressed, rather than relieved and grateful. If the buyer has done any shopping around, they have a sense of what the market rate is. (Buyers — we should always be shopping around to get the market rate, before we buy into someone’s persuasive marketing!)
Let’s aim to give our audience the experience of “What a great deal!”
By the way, our 1–1 service does not need to be the lowest-price thing we offer. We can offer books, workshops, or group programs for lower prices, which may then give the audience that feeling of relief and gratitude, while still giving them the benefit of our work.
The bottom line — separate your service rate from your “worth”. Aim to charge from enoughness and compassion. Build a clientele and audience that feels deep gratitude for your business.
Originally published at www.georgekao.com.