Don't Charge What You're Worth // Pricing Strategically
When it comes to pricing your services, one common piece of advice that often circulates is "charge what you’re worth."
While well-meaning, this mantra can oversimplify a complex process. Pricing should be a strategic tool that supports your long-term business goals, aligns with market standards, and reflects the value you bring to the table. In this blog, we’ll dive into how to rethink pricing through a strategic lens to ensure it’s both sustainable and aligned with your aspirations.
Big Picture Perspective
First, let’s take a step back. Your pricing should reflect your overall business model and growth ambitions. Are you content as a solopreneur with minimal overhead? Or do you dream of scaling into a multi-person agency with a robust team? Your rates need to support not just your current operations but also your future goals.
For example, if you’re planning to hire additional help, invest in better tools, or scale your offerings, your pricing should account for those future expenses. This ensures that as your business grows, your pricing structure remains sustainable and allows for expansion.
I’ve personally wrestled with this question in my own business, Fierce Decorum. For now, my focus is on maintaining flexibility for my family while running a small but mighty team. Success for me is not about hitting arbitrary revenue metrics; it’s about relationships, balance, and doing work that feels amazing. Your definition of success is yours to determine—and your pricing should support it.
Understanding Industry Standards and Your Client Base
A crucial aspect of pricing is understanding what the market can bear and where you fit within industry standards. Knowing these benchmarks helps you strike a balance between fair pricing and business sustainability.
Market research is key here. Talk to others in your industry, review competitors’ pricing, and analyze what similar service providers are charging. Some post their rates publicly, while others may share insights if you build collaborative relationships. This research will provide valuable context for setting rates that align with both your expertise and your target market.
For instance, my dreamy clients—small, creative entrepreneurs—often have a cap on what they can afford. I’ve tested pricing over the years to understand their limits. It’s not about underpricing my services but about finding the sweet spot where they see the value and I remain profitable. If your goal is to work with larger companies, your pricing will likely differ, but it’s essential to align with the needs and expectations of your ideal clients.
Market Awareness: Avoid Pricing Pitfalls
Pricing too high or too low can have serious consequences. If your rates are too high for your target market, you risk alienating potential clients. On the other hand, pricing too low can undervalue your expertise and harm your profitability.
The key is knowing your audience. Are they looking for high-end, white-glove services, or do they value affordability? Once you understand their expectations, you can adjust your pricing to strike the right balance. Remember, pricing isn’t just about numbers; it’s about positioning yourself in the market in a way that attracts your ideal clients.n.
Continuous Improvement and Skill Enhancement
Your pricing should evolve alongside your skills and services. As you gain more experience, invest in professional development, or expand your offerings, it’s natural to raise your rates. This not only reflects the additional value you bring but also builds your confidence in your pricing strategy.
When I started, I charged just $15 an hour as a virtual assistant. That role helped me understand my super powers and I was able to shift my services and my pricing. Over time, I’ve strategically increased my rates as my expertise and client base grew. A good rule of thumb? Raise your rates incrementally when you consistently receive “yes” from clients. This approach allows you to build confidence while ensuring your pricing remains competitive.
Don’t forget to account for the additional value you provide, such as tools, templates, or other assets. These resources enhance your services and should be factored into your pricing. Try to get away from hourly unless absolutely necessary.
Practical Steps to Implement a Strategic Pricing Model
If you’re ready to refine your pricing strategy, here are some actionable steps to get started:
Analyze Your Business Goals: Identify your current needs and future aspirations. Ensure your pricing supports both.
Conduct Market Research: Use industry benchmarks and competitor analysis to understand standard pricing in your field.
Assess Your Client Base: Determine what your ideal clients can afford and tailor your pricing to align with their expectations.
Test and Adjust: Experiment with pricing and gather feedback from clients. Make incremental changes as needed.
Review Regularly: Schedule periodic reviews of your pricing strategy to ensure it remains aligned with market conditions and your evolving business.
Leverage Tools and Resources: Utilize pricing calculators, templates, or software to streamline your pricing process.
Strategic pricing is about more than just numbers. It’s a holistic approach that considers your business goals, market standards, and the value you provide.
If you’re feeling stuck with pricing or want a second pair of eyes on your strategy, let’s chat!
As always, I’m cheering you on every step of the way!
