TT#010 - 1 mistake + 1 improvement solopreneurs can make with pricing...May 10, 2022
I’ve had about 20 strategy sessions with solopreneurs in the last couple weeks, and one topic came up on almost all of them in one form or another: pricing.
How to price services?
How much to charge clients?
How much is too much to charge clients?
Today I’m going to share 1 incredibly common mistake I see when it comes to pricing, and 1 improvement you can easily make to ensure you and your clients come out winners.
The Common Mistake
The most common mistake I see with solopreneurs selling their professional services is pricing the wrong part of the service.
It’s fairly common for clients to think they want your time. So, that’s what you set the price on.
The formula often looks like this:
- I need to make $250,000 per year...
- Divide that by 52 weeks in a year...
- Divide that by 40 hours in a week...
- And we get roughly $120 per hour.
Here’s why that doesn’t make sense:
Clients want your expertise, not your time.
When I’m talking to a prospect about our 360º Sales Audit, they are typically suffering from suboptimal sales and want to know how to fix it.
To help them get answers, I draw on all the experience and knowledge I’ve acquired over the last 20 years as a salesperson, sales executive, marketing executive, CEO, entrepreneur, MBA student, and more.
Do they really care if it takes me 12 minutes to apply that expertise if it solves their problem?
In fact, wouldn’t they rather solve the problem in 12 minutes than over the course of 12 weeks?
That’s why pricing your time doesn’t make sense.
What’s most relevant is the time you invested into honing your craft, learning, applying, experimenting, and leading initiatives that make it easy to get them answers.
So if you don’t price your time, what should you price?
That leads us to our one improvement...
The one pricing improvement you can make as a solopreneurs is to set the price relative to the outcome you deliver.
Every sale is motivated by a desire to change something.
Anytime someone makes a purchase, they want to change something. If there was no reason to change, there’d be no reason to make the purchase.
This is true of every purchase. A new pair of shoes. A new car. And most certainly a professional service.
Chances are, there is a problem that needs solving or an opportunity that needs to be capitalized on. But you probably weren’t hired to maintain status quo.
The change your clients want has a value associated with it.
When I help solopreneurs build a client acquisition system, the value of that system is the cumulative revenue that system will generate - and - the time saved by building it faster than they would’ve on their own.
If one new client is worth $10,000, and the system we build delivers 1 client per week for the next 12 months, does a $10,000 investment to build it make sense?
This is the power of pricing relative to the outcome you deliver.
When you understand the outcome you can deliver and its associated value - quantitatively or qualitatively - you can create a win/win pricing structure that’s separate from the time you personally invest.
Clients are happy getting the outcome for a fraction of the benefits they receive...
You’re happy getting paid what you’re worth to deliver that outcome.
I’m on a mission to help 10,000 Solopreneurs & Executive Freelancers discover and enjoy a new lifestyle by creating income they deserve from wherever they choose doing work they love.
For a limited time, I'm offering a free audit of your client acquisition system and will personally help you clarify what’s working, what isn’t, and what to focus on right now to start winning your best clients - on demand.