Episode 023 – How to Price Your Services Properly So You Get Big Money and Get it Upfront

High Ticket Sales Secrets | Coaching & Consulting Business / Personal Branding / Sales Training / Marketing / Get Clients

Well hello. Today I’m going to give you a simple idea but very profound. What sparked this idea was a conversation I was having with one of my clients – my students. We were having this conversation and she’s just been so busy and she’s getting more deals than ever, more contracts than ever. And she’s a little bit overwhelmed. I said to her, “Well, you know, now we are already to bump up your price but the demand is still there.” I gave her a very simple strategy that could easily add tens and thousands of dollars to her bottom line. And I want to share that strategy with you. It’s a pricing strategy.

How to Know If You are Charging Enough

Now, assuming that you are very good at what you do. You have lead generation going and you’re getting leads. You are reasonably busy. You’re getting people want to go hire you. Now, when it comes to pricing, if you are not getting a little bit of resistance from your prospects, chances are, you are charging too low. So it shouldn’t be when you are telling other people what you charge that they say, “Okay, good.” Or, “Okay, that sounds reasonable.” Or, “Sure, that’s a great deal.” That’s the last thing you want to hear.

You should be getting a little bit of resistance like, “Ooh, that’s a lot. That’s a lot of money.” So if you’re not getting just a little bit of push back, just a little bit of resistance, it means you’re not charging enough. If you’re getting too many and too much resistance, it means you’re charging too much or maybe you have not done enough things to drive up your demand.

The Strategy: Charge a Higher Upfront Fee

So the strategy I gave her is very, very simple. Now this would apply to you especially if you are working with clients on a more long term basis. In other words, it’s not project-based. It could even be project based, but let’s say assuming you get some kind of retainer every month and it’s a 6-month thing or 12-month thing or whatever. What you want to do is charging a higher upfront fee. Let me explain how that works.

So think in terms of psychology of pricing. Let’s say you go buy a car. Most people only remember the monthly payment. It’s $600 a month, it’s $800 a month, whatever. But most people don’t remember the down payment – how much they paid for the first month. Now you can easily apply this when you’re offering your high-ticket program.

Let’s say your – and I’m just making this up, but let’s say your monthly retainer is $1500 a month and you’re providing SEO service. $1500 a month. Now let me ask you a question. Is most of your work front and loaded? Yes. For most people – most consultants and coaches, a lot of what we do, a lot of work is front and loaded. Of course we provide ongoing support, but chances are we do a big chunk of the work in the beginning. You’re investing a majority of your time in the beginning of the relationship for the first month.

So if you have some kind of process that you could articulate and explain to them and say, “This is how it works”, let me go back to the SEO example so you’re changing authorization that, “Okay, for the first month, we’re going to do research, we’re going to find key words, we’re want to optimize, maybe do a competitive analysis to see what your competitors are doing and how hard it is to rank those key words. We’re also going to be providing suggestions to your homepage, your website to see what changes need to be made that could help you better immediately…”

That process, all those steps could be 3 steps, 5 steps, 7 steps. Now you can easily say, “You know what, here’s what we charge. We charge a $5000 setup fee.” You’ve got a setup fee if you’re selling some kind of membership program, it could be an activation fee upfront. “After that it’s going to be $1500 a month.”

Increase Your Cash Flow and Do Not Lose That Profit

What happens is, for most people they say, “Okay.” Now, here’s the thing. If you don’t charge the upfront fee and you just go with a monthly retainer of $1500 a month. Think about it. We are just leaving $3500 profit on the table. The prospects would not have any problems paying you that money because they understand initially that you invest a good chunk of your time into setting things up. I’m surprised by how few consultants do this. After a couple of months they don’t remember the first month and all of that down payment, that upfront fee. All they remember is they’re paying you $1500 a month.

That’s it. That’s the strategy that I gave her. I said, “Hey what I want you to do Lisa is to charge a higher upfront fee.” So in her case it would be $10000 or $15000 and then ongoing, it’s whatever how much. As simple as that. That’s like free money basically. Free cash flow for you.

So test it out. Think about how you can charge your clients some kind of upfront fee especially if, again, your work is front and loaded – there’s a lot of time involved. Charge them. Explain it to them and articulate your value. I think you’ll be very happy with how many people will easily agree to you. “Okay, I could pay that.” And that’s that. Okay?

So until next time. Remember: change your offer, change your life.