There are two big mistakes I see most coaches make when pricing their programs.
They undercharge, and they’re under-confident.
These two go hand in hand. When a coach lacks confidence, they fail to charge the right amount because they don’t know if they’re worth it. In turn, by undercharging they don’t generate enough income which results in a lack of confidence. It’s a nasty cycle.
After a while, this causes them to undervalue themselves, causing prospects and clients to undervalue them as well.
The best coaches have a real sense of pricing confidence. They know their value which makes them feel bulletproof about their program and the fees they charge.
The key to pricing confidence is what you’re selling. Too many coaches are under-confident and undercharge because they sell the wrong thing – they try to sell their services. To be confident in your pricing, you must sell the outcome, and then price it accordingly.
Let me show you exactly what I mean.
The 10X Value Rule
One of my clients recently showed me his table of value. It’s simply a list that tells clients, “here’s what you get, and here’s what it costs.” The value was about $3,000. The price he charged was also $3,000. Value and price were equal in his system.
Because the price isn’t greater than value, it seems like a fair deal, right? It is a fair deal, but that’s not what we’re after. We want a ‘no-brainer’ deal. We want an equation that makes our program irresistible.
We want our value to be 10 times the price.
Whatever we’re charging, we want clients get back 10 times the amount they pay us. If we charge, $2,000, we want clients to make $20,000. This is the no-brainer deal we’re after.
When I first started coaching, I sucked at pricing. I didn’t have pricing confidence around my value at all. The 10X Value Rule gave me the confidence to make sales pitches based on value- to look someone in the eye and tell them when they spend $10,000, they’ll get $100,000 in return.
Why did this work? I was selling outcomes, not just my program.
To be confident in your pricing, you must sell the outcome.
The Story of The 20 Minute Cassette Tape
There’s a guy in the USA whose business was helping companies stop internal theft.
He’d go to retail stores and teach half-day workshops on how to stop employees from stealing from warehouses and delivery trucks. He charged $450 for each workshop, which seemed like a fair price for just several hours of teaching.
He started working with a marketing consultant who told him to make a list of the top 10 ways employees stole and how to solve them. Then they recorded the list on a 20 minute cassette tape.
How much do you think they charged for the tape?
$30? $50? $100?
Not even close! They sold the 20 minute cassette for $3,000 each.
Why? The marketing consultant understood the 10X concept. He knew that if the companies implemented these methods, they’d save well over $30,000 in inventory.
They made millions of dollars from the tape. It worked because they understood value pricing.
If they had based the price on the cost of making the tape, they would have still sold a lot, but they would have sold themselves short.
The price of your coaching should be based on outcomes, not the cost of your program.