Terry Rice

How to confidently determine (and increase) your prices

published5 months ago
4 min read

My kids were home from school Tuesday and Friday of this week. Although I was short on time it was still one of my highest revenue generating weeks of the year.

I booked $33k in new business, some of which came from unexpected sources. (more on that soon)

For this week’s issue we’re focusing on your pricing from both a tactical and mindset perspective.

And as a heads up this is your last opportunity to join my live entrepreneur accelerator program, The Solpreneur’s Fast Track.

I’ll teach you how to design, price and promote your services through a combination of on-demand and live instruction. The program kicks off next week, you can learn more and sign up here.

And now, let’s get started.

Today at a glance:

Thought: Why am I selling myself short?

Time Saver: How to determine your pricing

Tactic: Announce a price increase

Read time: 4 minutes

Thought: Why am I selling myself short?

I charge $7,500+ for speaking engagements but I may lower my price based on the response to a few questions:

  • Does the event involve travel?
  • Do I have to prepare new content?

And while these are valid considerations, this week I realized I was still selling myself short. Here’s how.

A friend pitched me to do a remote Q&A session with her organization. No preparation, no travel, just log into Zoom and start answering questions.

I typically would have reduced my rate for this, but she didn’t. She stated my rate was $10,500 for an hour long session and the proposal was approved!

This made me think;

“Why am I selling myself short?”

What other opportunities could I be missing out on or undercharging for? The next day I submitted a proposal for an opportunity and doubled the rate I was originally going to ask for.

Guess what? That got approved too.

So as you go about your pricing or business development activities keep this thought in mind;

“Why am I selling myself short?”

Aim higher, charge more and see rejection as a learning experience - or opportunity to negotiate - as opposed to a setback.

Time Saver: How to determine your pricing

Determining the price of your services is a bit easier than figuring out your speaker fee, but it can still be challenging if you don’t leverage the correct approach.

So, here are two of my favorite ways to get started.

The first is called the Rule of Thirds. To determine your fee you simply take the hourly wage (plus benefits) you would earn if you had a 9-5 job, and then triple it.

If you’ve already had a job offering a similar service, go with that rate. If not, do some research.

For example, let’s say you help companies with their email marketing. Do some digging to determine how much an email marketing expert can expect to get paid internally.

To keep the math simple, let’s say you land on $100k/year.

Here’s what it would look like if you applied the rule of thirds.

Why is it called the rule of thirds? Since you’re not a salaried employee you most likely won’t be getting paid by clients to work 40 hours a week.

Beyond that you also have additional expenses including the tools you need to do your job and insurance. And don’t forget to set aside money for taxes!

The rule of thirds assumes the following.

  • One third goes to your real wage
  • One third to expenses
  • One third to administration & low utilization

Once you land on your initial hourly rate it’s time to do some more digging. So here’s what I want you to do.

Find competitors who offer the same or similar services and take note of how much they’re charging. You’ll most likely see a range based on their experience and testimonials but just jot down the average rate.

Then, compare your rate from the rule of thirds exercise with the results of your competitive research.

If your rate is way too low, you’ll definitely need to increase it.

If your rate is higher than average, that’s not necessarily a bad thing.

So long as you can deliver on the promises you’re making, you can see this as an opportunity to position yourself as a premium provider.

Again, keep this in mind;

“Why am I selling myself short?”

If price turns out to be a common objection from qualified prospects you can see this as a sign that you should lower your rate a bit. Fortunately, if people want to work with you they’ll typically provide a counter offer.

So long as that offer isn’t too low you can accept it, continue building up your credibility and increase your rates over time.

Tactic: Announce a price increase

Many companies offer a Black Friday/Cyber Monday sale. And while this can be a great way to bring in a large influx of cash, you should consider a counterintuitive approach; announce a price increase.

Why? Instead of discounting your services you can charge full price while still incentivizing prospects to partner with you.

Here’s one way ’ll apply this strategy.

My online course currently sells for $97. This month I’m raising the price to $150.

However, in advance of the price increase, I’ll let everyone know this is their last chance to buy it at the current rate. As a result the current rate is perceived as discount since it will cost 50% more if you decide to wait until later.

How can you apply this strategy to your services?

Let current customers know your price will be going up in Q1. However, they can still lock in the current rate if they renew and put down a deposit before the end of the year.

Have any prospects who are still deciding whether or not they want to partner with you? Again, let them know your prices are going up and the only way to secure your services at the current rate is to sign a contract and put down a deposit.

Sidenote: I appreciate it when you implement these tips and share the results with me. If you decide to use this tactic please let me know how it goes for you!

I hope you found this valuable (please let me know) and if you did please consider sharing it with a friend. They can sign up here.

Have a great weekend!

Whenever you're ready, there are 4 ways I can help you:

1. Learn how to start a professional service business using the skills you already have (Available now)

2. Get quick answers to your most pressing questions (Booked out 1 week)

3. Work with me 1:1 to build your revenue and personal brand (Booked out 3 weeks)

4. Build your professional service business with me in a cohort-based live accelerator (Starts November 14th)