Don’t like talking about money?
We feel you. You likely rather talk about your community, classes, and what you can do for your students. But at the end of the day, your practice is a business providing for yourself and the people around you. And even if you don’t really need the money, getting compensated for your efforts creates a sense of self-worth and accomplishment.
Then why is it that we rather not talk about money and shy away from pricing?
For one, because we are driven by passion, not money. We don’t believe money is what should matter in life, and we probably don’t want others to think money is what motivates us. There are undeniably more important things in life, but having too little money can leave us stressed and unhappy. A study in 2018 showed that happiness increases with income up to a certain level (~$105K in North America). Anything above this point leads to lower levels of happiness and wellbeing. Whether you believe that holds true for you or not, making enough money to have no stress and having spare time to spend on things that are important to you isn’t a bad thing right?
A second reason we feel uncomfortable with setting prices is that asking a certain price for your class or service, or demanding a certain salary makes us put a number to our worth or the value we bring. This can trigger an insecure voice in us, asking whether we really believe we are worth that. As a result, we tend to sell ourselves short. But you are bringing value to the world, and that must come at a price. My finance professor used to say: “there is no such thing as a free lunch”. Everything has its price and whether we are consciously paying with money, or unconsciously with say our data, we pay. So, don’t be shy to charge a fair price.
Are you all set with your prices and asking yourself why bother rethinking those?
Because slight improvements in your pricing can help you increase your earnings significantly. It will also force you to think about who you want to serve, and how you want to serve them. Who is that customer that really benefits from what you’re offering. That customer who is willing to pay for what you have to offer. Think about when you buy something from honest and hard-working businesses. If I like what I get in return, I’m happy to see them thrive and help them make a living out of it. That’s how the economy works – we support each other by buying each other’s products and services.
So rather than just looking at what others do, let’s take a closer look at your options and common traits in human behavior. In this pricing 101 series, we will discuss common misconceptions, human behavior, and how to go about pricing. I’m warning you now that this blog will not tell you exactly what price to ask, since it will be different for each of you, but I will give you the tools and considerations to keep in mind when setting your price.
In this pricing 101 series, we will rely on concepts learned in MIT Sloan’s pricing course, taught by a power woman Prof. Tucker. If you’re interested, most of her lecture notes are available online.
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We’d love to hear from you. So don’t hesitate to ask questions or comment below.