Branding and finance aren't often mentioned in the same breath. Yet how we assign financial value to our work says a lot about our brand. And about us.
The almighty dollar.
As I mentioned in a previous post, money is a topic many entrepreneurs love to hate. But like it or not, money lies at the very foundation of business—although whether we chase it for its own sake, or as a tool, or as a means to an end, is up to us as individuals.
It's easy enough to hide some of our struggles or mindset hang-ups with money behind the business curtain, where clients don't go. Yet that unhealthy relationship will manifest itself in countless ways—many of them unexpected. And many more of them, in places where clients actually can see.
Our relationship with money will everything in our business. It will even affect our brand.
How we feel about money will determine how much we charge for our services. And this will determine how our brand is perceived, and whether or not we receive compensation that reflects what we are really worth.
It will determine who works with us, and who decides to allocate their resources in other ways.
It will also determine whom we choose to work with as a partner or coach—since our opinion of our own value will drive whether or not we choose to pay for theirs.
Most of us think we're doing our audience a favor by keeping our prices low. Not everyone is wealthy, and all markets do need to be served. If we don't look or sound expensive, we'll likely get more business (and make more friends). If we come across as approachable, we'll perhaps get the projects that more "expensive" colleagues leave on the table. Above all, we'll make absolutely sure that we don't scare anyone off.
And that, my friend, is the problem.
Because the point of your pricing strategy is not to be sure everyone can afford you. It's to ensure that only those who are willing to PRIORITIZE your work actually book in.
I use the word prioritize with great intention.
More often than not, the real issue with "frugal clients" is not that their income level truly prohibits their working with you; they have simply prioritized their finances in other ways."I can't afford you" more often than not means "I have chosen to allocate my resources elsewhere."
And that is perfectly okay.
A client who will not prioritize your value to their need is not the right client for you.
You see, when your prices are the lowest in your market, you may catch more clients. But in my honest experience, many of these clients also "flake out." You'd be surprised how many don't attend sessions regularly or do their homework. Some don't even meet with you at all after they've paid the fee!
Those who do often require a tremendous amount of hand-holding and don't understand that "a little extra help" is actually costing you (and them) big time.
By pricing ourselves low, we psychologically make our services and our brand seem cheap.
We get what we asked for . . . literally.
By contrast, when we begin to increase our rates, a drastic shift occurs. Clients who are not serious or really are not prepared to work with us simply don't book in. Those who do are more likely to value the investment they have made. Which is far healthier in the long run than a hand-out.
Where more money is required to make the commitment, a client is more likely to deliberate about the purchase. And when they finally make it, they are "all in" that working with you is the right decision right now, and worth their hard-earned income.
In this way, the perception of the work we create actually rises along with our rates.
Which brings us back to branding.
When I look at an entrepreneur's website, and get excited about their offerings and expertise, the next thing I do is visit their sales page. If I see a low figure next to a high-value, high-touch offering, I immediately lose some respect for that individual's brand.
I guarantee you their potential customers do, too.
That customer may not know they have lowered their opinion, of course. But it comes out loud and clear in phrases like, "Wow, she's really inexpensive." And "That's a bargain!"
Such phrases rarely indicate respect for the time, years, and sacrifices an entrepreneur has made to amass the expertise s/he now offers.
In every case I have encountered, when a professional services client relationship starts with this kind of "bargain" mindset, it rarely ends well.
Either the client takes the entrepreneur for granted, or the entrepreneur feels used and resentful . . . not to mention fulfilling on high-value professional work for just peanuts per hour.
What we choose to charge for our services says a lot about how much we really think we're worth.
Others take their initial cues from us . . . and how they perceive our worth does ultimately lies at the heart of our brand.
(All this assumes, of course, that you actually think you're worth more than peanuts per hour. It also assumes you've done some market research to know what's typical for a professional in your field. This is not the same as just looking at what other entrepreneurs around you are doing. In my experience, this is rarely a good judge—especially among women entrepreneurs who historically undersell themselves.)
Of course, this does not mean that we can never offer free things, trade work or otherwise discount services. But if we are doing so as a regular income-generating and brand-building strategy, we will likely be disappointed.
At the end of the day, do we want to be seen as the cheap brand that anyone can afford, whether or not they're a good fit? Or do we want to be seen as a premium partner, one worthy of the sacrifice, diligence and good planning that hiring us will demand?
What you're asking monetarily in exchange for your services for says a lot about what you think you're worth.
And what you think you are worth will directly impact what others think, too.
Your pricing says a lot about your brand.
Until next time, speak freely.
What is your current process for deciding on new pricing? Do you feel it truly reflects your level of expertise? Comment below.
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