When I first started coaching all the way back in 2016 I was seriously underpricing my services.
While I didn’t realise it at the time, I had a whole lot of mindset work that needed doing and one of the surface level ways it was manifesting was in underpricing my services. It’s also something I see come up with many of my clients, especially those newer to the world of business and one of the first tasks we set to work on for many of them is raising their prices.
There seems to be two huge extremes when it comes to the pricing mentality in the Coaching industry.
Pricing Mentality #1: those who want to help people and tell themselves that they aren’t doing it for the money.
This often leads to setting prices that really undervalue their work. The lesson here is that charging seriously low prices often results in burnout which means a business that’s not around for a long time. If you burn out helping people, you won’t be able to help them in the long term.
It’s also important to remember that if you’re struggling to pay your bills and create a stressful financial situation, you also won’t be helping people in the long term. Bills need money to pay them and if that’s not coming through your business, most coaches will end up needing to get a job.
The takeaway: to help people in the long term your business needs to be sustainable and to be able to pay you a liveable wage.
Pricing Mentality #2: this idea of charging the highest price you possibly can in order to ‘charge your worth’.
This also isn’t the best approach. Many people find themselves trying to sell high ticket offers without the belief in themselves. What I commonly see as a result is Coaches trying to sell offers they’re really not energetically behind which usually translates to not being able to sign any clients. If you ain’t sold on it, your potential clients ain’t going to be either.
A big shift to think about here is that you can not charge your worth. As a human you are inherently worthy and you can not put a price on that. Your worth as a human has nothing to do with the prices you charge inside your business. Take this mentality with you at every stage and pricepoint in your business and it will stop the push-pull between success in your business being an indicator of your success as a human.
The takeaway: pricing needs to be focused on the value and results you deliver to your client. Nothing else.
This really gives you the permission to start where you are. You don’t have to start charging $10,000 per client to feel worthy as a human – especially without the experience to back it up – you may grow to the point where that feels like the right price and hell yeah, I celebrate that but you don’t need to start there. Nor do you have to start out with pricing that won’t sustain you or your business.
Start with what you know, like honestly truly know is fair value for the results your clients get, (you are not to listen to your money mindset voice here). As coaching is a skill, the more you do, the better you get, the better results your clients get, you can frequently and incrementally raise your prices from there.
So with all of that said, how do you know if you are underpricing?
Here’s three things to look out for as indicators that you are underpricing your coaching services:
- The numbers just don’t add up
There are a few variables when looking at your pricing to estimate your business income (whether weekly, monthly or yearly). They are:
- the time you have available,
- the number of clients
- the price.
It’s fairly simple maths: number of clients multiplied by your fee equals income (don’t forget to factor in whether they pay weekly, monthly or upfront for services delivered over another period of time). If the math just doesn’t get the income you want, you’re probably underpricing.
Let’s say you have 20 hours per week to work with clients and ideally that means you can work with 12 clients a week or 24 at a time each month if you meet with them fortnightly (bi-weekly).
If you multiply 24 x $200 per month coaching fee you get $4,800. If your income goal is $8000 per month, you have to acknowledge that you are underpricing. You don’t have capacity to work with any more clients and you are still a way away from your goal, this is a good indicator that you are underpriced. NB client load is different for everyone, however 24 clients at a time is considered A LOT in the coaching industry when talking about 1-1 coaching. Average client loads vary but my experience is that most full time coaches have LESS than 20 1-on-1 clients at any time.
If the numbers just don’t add up and you are at capacity, this is a great indicator that you are underpricing.
- You’re feeling burntout or resentful towards your clients or you are resisting bringing on more clients
When you’re underpriced some of the earliest symptoms to pop up are:
- Feelings of being burntout (working with too many clients or more than what you really want to),
- Resentment towards your clients (because you’re overdelivering in terms of the energy exchange and not receiving equally within that exchange)
- Resisting bringing on new clients because it almost doesn’t feel worth the effort when you look at your time versus the financial gain
These common and straightforward signs are indicators that you are underpricing and it’s time for a price rise.
- You want to be charging more for your services
If you want to be charging more, it’s a fairly simple and straightforward way to assess whether you’re underpricing. I know it sounds simple, but if you know you want to be charging more and can see the value of that in your services, you’re underpricing.
Don’t let a fear or thought that sneaks through your mind stop you from raising your prices. You can tweak your messaging and do the mindset work to overcome that. Literally every time I have raised my prices, I have thought no one would buy at the new price and surely I was outpricing myself from my clients and yet, low and behold, every time I’ve raised my prices people have still signed up to work with me.
Do not let that fear-based thought drive your decision making. If you want to raise your prices, it’s time to do the work to get out of your head and into action.
There you are. Three common indicators that I see in my clients, coaches around me and have experienced myself that indicate that your services are underpriced. Do you think that you may be underpricing your services? Which one of these is currently showing itself in your business?
Did you enjoy this blog?
I recently did a video training inside my Facebook group ‘The Coaches Collective’ on underpricing and the starting point I encourage all my clients to at least move to when we start working together. To catch that training and many, many more, come join us inside the group.