Kate Phillips

Life, Prosperity, and Small Business Coach. Author. Speaker. Trainer. Singer/Songwriter.
Seattle, Washington

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The Price is Right

Know your value, earn your worth, sidestep regret, and price your services strategically, not out of fear or scarcity.

Written Jul 28, 2009, read 2620 times since then.

Have you ever agreed to do something for a particular price - and then immediately regretted it?

I recently had two conversations with self-employed clients and friends who were in a bit of regret about "underpricing" themselves. Wanting to make their customers happy, they had made themselves unhappy. They traded their services for too little cash, giving themselves the short straw of the trade.

We are constantly "trading" our energy for something else of value. As entrepreneurs trading services for money, it can be hard to ask for what we want in the trade. We don't live in a price-fixed world, everything is negotiated. And sometimes, we betray ourselves by asking for less than we know we're worth.

Know Thyself

It's important to know your "regret price" when pricing your time or services. (Mikelann Valterra refers to it as your "Resentment Number"). Include not just your time for doing the project, but the commuting time it might take. And don't forget the time you spent marketing to get the client, your self-employment tax, office rent, insurance, and wear and tear on any equipment!

At what price will you resent yourself for doing the work? (I almost said "resent the client for paying you so little," but really, it's your choice to take the work or not.) Alternatively, at what price will you regret not doing the work, if they choose to hire someone else? It's important to feel good about your price.

Think of your possible pricing in tiers (from high to low):

"Reaching" Price

Feel GREAT Price

Feel Good Price

Bottom Line Price

Regret Price

Your "Reaching Price": This is the price you are "reaching" towards, what you'd "like" to charge. You might not be 100% confident about the value, you might even feel guilty and wonder if you're overcharging. This lack of confidence creates a lack of alignment, which makes it hard to ask this price and deliver your service confidently at this price... yet.

Your "Feel Great" Price: You feel well-compensated and confident about your value. Goldilocks would say this price feels "just right"!

Your "Feel Good" Price: You feel you are competitive and you're comfortable charging customers this much, though you might wish you made more. This might be a price you once felt "great" about, but now it might feel a bit like "settling."

Your "Bottom Line" Price: In businesses where you may be "bidding" or negotiating for work, there may be a gap between what you'd like to make and a lower number that you'd still happily work for. It could also represent pricing you use for advertised specials to attract new clients, reward repeat clients, or fill gaps during "the slow season." This is the price you'd regret NOT doing the work for, your bottom line. It's important to "know it and don't go below it!"

Your "Regret Price": You resent doing the work for this amount and would regret even taking the work! It's out of alignment and out of integrity for you to work for this price, and frankly, you're preventing higher-paying customers from hiring you if you charge so little.

It's essential that you feel good about your price. But you may have a "range" of prices that feel acceptable to you. Identify your "bottom line price," your "feel good price," and your "feel GREAT price." (Why not ask for the feel GREAT price every time?)

If you'd like to make more, increase the value you feel you deliver, and/or increase your ability to receive an amount of money that potential clients will be willing to pay.

Earn Thy Worth

When I hear people talking about "earning what they're worth," I can't help but think of a phrase I've heard: Our Results Reveal our Intentions. The truth is, we DO earn what we're worth - what we FEEL we're worth. If we felt we were truly worth more, we wouldn't settle for less.

As Maxwell Maltz, author of Psycho-Cybernetics observes, it's very difficult to outperform our self-image. That's why personal growth often translates directly into income growth. As we feel more confident about ourselves, we're able to charge more.

Know Thy Value

In addition to the price you feel comfortable with, consider as well the RESULT for the client. What benefit will they receive, and what is that benefit worth to them? Some high-earning friends of mine raised their prices when they realized how much they were making (or saving) their clients!

I know a bottom-line consultant that would give a client a choice between a large fee and a percentage of their increase in profits. The clients would typically look at the large fee and say, "No way!" and opt for the percentage instead, certain that his assistance didn't warrant such a high fee.

What the clients didn't realize was that the large fee was intended to scare them into going with the percentage payment instead! Since he was a great consultant who would help them increase their profits by millions, he knew that he would make more money by getting a percentage rather than the flat fee!

They paid him more in the end, but it was ultimately a win-win. The company chose the compensation that felt "lower risk" to them, the consultant helped them make a fortune, the consultant made a mini-fortune, and everyone was better off. All because he understood not only his worth, but his value to his clients.

Pricing Strategies, Pricing Wars

That story also demonstrates the possibility of offering more than one pricing strategy. You can charge by the hour, by the job, or other ways. You might alter what you charge according to when they pay (I offer a 10% discount for people who want to prepay 3 months of coaching). You might charge extra if they want to make payments, or if you have to bill their insurance company.

You might consider offering incentives to your best clients who hire you repeatedly. (Remember how fun it is to get that "11th latte free" with your punch card?) Repeat customers are the backbone of any business, and you don't have to generate the same cost or effort marketing to a repeat customer than a first-time customer.

Your pricing might also be affected by "what the competition is charging" or market conditions - are your services in demand, or are you lonely for clients? Ultimately though, you won't serve yourself if you underprice out of fear or scarcity. (You might even lose clients who think your services are inferior to a competitor who charges more.)

If you decide to use "discounting" as a marketing strategy or an incentive for referrals, new clients, etc., make sure that you are not discounting out of fear and scarcity, but out of a strategic plan. If your "introductory specials" tend to lead to new clients, and if the worth of a new client (over time) is thousands of dollars, it makes perfect sense to knock $50 or $100 off the first appointment or service. But if the new "discount customers" tend not to return, then it's a strategy that doesn't work for your business (or you).

It's not always best to be the cheapest, and if your services or client results go "above and beyond", don't be afraid to price above and beyond! It is always better to build value and emphasize your uniqueness than to compete on price alone.

The "winner" of the price war isn't a winner at all if they regret taking the job. Plus, the price war winner becomes a loser the moment another business undercuts them. Most businesses find the value-conscious customer is a better and more loyal customer than than a price-sensitive buyer.

Recognize that only YOU can be responsible for trading your time or services for a price that seems fair to you.

Years ago, I coached a woman who felt she had gotten the raw end of a business deal. She felt taken advantage of, she felt discouraged and angry. In the same conversation, she mentioned how cheap the rent was where her business was located. I asked if it was under market value; she said yes, it was. I asked who was responsible for setting the rent and making sure the rent was "fair" and covered the property's expenses. She said it was the landlord's responsibility to charge "enough." Even though she felt her rent was "cheap", she wasn't going to complain!

Likewise, it was her responsibility to do her due diligence on her own rental space, investments, and business deals. And it was her responsibility to negotiate (or walk away from) a deal that wasn't fair or didn't make sense for her, and to feel good about her profit. She couldn't expect someone selling her something to represent her best interests any more than her landlord should expect her to insist paying a higher rent!

Similarly, don't wait for your clients to pay you more if you're undercharging. Only you can decide if "the price is right."

Learn more about the author, Kate Phillips.

Posted by Suzette West, Port Orchard, Washington | Jul 29, 2009

What an awesome article, Kate! All too often we indie biz people bend over backwards to please our clients often times at our own expense. I am saving this one as a reference and reminder. Thank you for posting this! Cheers!
Posted by Christopher Burbridge, Winter Park, Florida | Jul 29, 2009

Kate, this is a great article, thank you!

The part about the consultant who set up the fixed price versus percentage, in order to get the percentage, that's brilliant.

Myself recently, I have come upon a philosophy that goes like this:

I need to make $x a month, in order to meet my required income. I won't work more than n hours a week, because I have other considerations. If 1/3 of my time is billable hours, then I must make $y per hour, to break even.

(Not that I necessarily charge per hour, but I want to have a baseline around what I'm getting in return for my time.)

It's so simple, but somehow, focusing on this, on a week-to-week basis, has really changed me.

I recently realized that, if I am offering to charge my client less than this bottom line, it's like I am giving away a piece of my own sustenance. It's an attitude from a time of starvation:

"I will give you some of the food I need, because you are hungry, and I will not have all the food I need, to do my work."

It is also saying, you are starving. How empowering is that???

Or another way to say it, "I will empower you to be very successful, but I'm not worth that much for it."

This helps noone.

Pricing is a very interesting issue. Thanks for the article, it was helpful!
Posted by Kate Phillips, Seattle, Washington | Jul 29, 2009

Thanks Suzette and Christopher! So glad you found the article helpful.

Christopher, you have touched on something very powerful here, which is, "What are our beliefs about our customers!?"

If we believe they are starving and can't afford our services, then two things will happen:

First, we will actually be looking for customers who can't afford us (frustrating), and/or when we find those who can easily pay our prices, our beliefs will lead us to negotiate down and undersell ourselves.

And we must remember that those who can afford our services easily still might try to negotiate. It may not be an indication that they are "starving" so much as that they are savvy shoppers who would like to pay as little as possible! I know multi-millionaires who hate to pay full-price... even though they can.
Posted by Christopher Burbridge, Winter Park, Florida | Jul 29, 2009

Yes, this is a great point!

If I am in a place of questioning my value, I will think people are questioning my value.

What I have realized, of late, is that very seldom to people think it's not worth it.

They may or may not feel able to pay, but that is another matter.

It really is amazing, when I stand up for a certain bottom line value, for everything I do, how I start to frame everything from that space, and it is so! Hmm......

I like what you're saying. Keep it up!
Posted by Joanne Victoria, Silverdale, Washington | Jul 29, 2009

Feeling great and having great income and a great profit is really great. Thanks..for the great article. Joanne Victoria
Posted by Katy Gilberts, seattle, Washington | Jul 29, 2009

I give this article a 10 out of 10.
I am my product, most of all, when I am an entrepreneur, and what keeps me from resentment and not being "sparkly" or even somehow settled and "ok" affects my business.

Thanks, great article! Katy Gilberts, Musical literacy from infant to 9yo, for every child and every future musical path. www.katysmusikgarten.com
Posted by Kate Phillips, Seattle, Washington | Jul 29, 2009

Christopher, your earlier comments bring up a couple more pricing considerations worthy of mention.

First, you wisely address the big question of, "What do you need to earn to support your lifestyle?" Of course, we are not pricing in a bubble, but in a business that supports a human being or two, so this is a huge consideration!

But the other side of the coin is this:
The amount of money YOU need or want has NOTHING to do with the VALUE you provide to your customers or the amount they will be willing to PAY!

When I was a realtor, sometimes sellers got hung up on the price they "needed" to get for their house. Unfortunately, the buyer only cares if it's a good or at least fair deal for them. The seller's need had NOTHING to do with the market value of the house.

When I recorded my first music CD, and saw the effort and expense going into it, I realized how ridiculous it seemed to sell it for $20 (or less). I felt that $600.00 seemed about right (and would help me recoup my expenses faster!), but alas, the market just doesn't support $600 music cd's (not that they weren't "worth it...")

Joanne, thanks for reading, and Katy, the work you do is SO valuable, if I had to put a price on my own ability to sing or play music, well, I couldn't! It's invaluable, a truly precious skill, and teaching children to play music is a high calling.
Posted by Denise Griffitts, Lafayette, Louisiana | Jul 29, 2009

Great, great article! I just shared it on Facebook and would love to have permission to re-post it on my Virtual Assistance University blog. Please let me know if this is ok with you.

Thanks!

Denise Griffitts
Posted by Kate Phillips, Seattle, Washington | Jul 29, 2009

Great Denise, go for it!
Posted by Angela Ferraro-Fanning, Bernardsville, New Jersey | Jul 29, 2009

Kate, thanks for this article. I really like your idea about the five-tier pricing strategy. Thanks very much.
Posted by Karen Kleinwort, Wilsonville, Oregon | Jul 29, 2009

Hi Kate,

Thank you for the wonderful article. It is amazing how we are able to quickly see the value behind someone else's work but we are so short sighted when it comes to our own value or worth.

Being able to step into a place of positive self-worth not only supports us to move forward but it helps set the example for others that it is okay to charge not only a fair fee but a 'worthy' fee for our time and expertise.

Namaste, Karen
Posted by Christopher Burbridge, Winter Park, Florida | Jul 29, 2009

Yes. I was saying to a friend the other day... I could know how to build a whole rocket ship by myself... But for some reason, the moment I knew how to do it, I would not perceive it as all that valuable to know how to build a rocket ship.

"Oh, that's just a little old rocket ship. Anyone could do that."

What's that about!? ;-)
Posted by Karen Floyd, Seattle, Washington | Jul 30, 2009

Hi Christopher,

I want to respond to your friend who thinks if it's easy it has less value. This is such an old mind-set. The old work ethic is to work hard or you're lazy. Hard work = Value.

Gee I hope we're almost done with that one.

Karen www.DesignABetterLife.com
Posted by Judy Dunn, Seattle, Washington | Jul 30, 2009

Good points here, Kate. I have also gotten trapped into the thinking that just because something is easy to do, it's worth less. But look at physicians, and even auto mechanics! We don't pay them less because they seem to effortlessly solve our problems.

Pricing is something that can get lost in the shuffle when we design our marketing strategies. How do we ever learn how to do it in a way that both respects our clients and values our own talents and skills? For me, it came through experience, through trial and error—and some painful mistakes along the way.

You mentioned Mikelann Valterra. I really respect her and her work because she takes "fragile entrepreneurs" and walks them through the process of discovering their self-worth and finding a way to establish pricing strategies that both make sense and feel right.

You are right. In the end, only you (we) can decide if "the price is right." Lots of good stuff to ponder here, Kate. Thanks for sharing so generously.
Posted by Valerie Vozza, Seattle, Washington | Jul 30, 2009

Thanks, Karen, for hitting it on the proverbial head. I, like Christopher, have figured out my Bottom Line Price by what my expenses are. This means working 20 days a month, which is a lifestyle I don't want. One complaint about the economy is that clients more than ever want a lower price because of their cost-cutting. My costs (insurance) continue to increase, though! It's very hard to say 'no' to any work these days, even my Regret Price jobs. This, too, shall pass.....

Thanks again, K!

Valerie
www.valerievozza.biz
Posted by Mark Combs, Fernandina Beach, Florida | Jul 31, 2009

Kate,

This article really speaks to an important topic that a lot of people truly struggle with as they are trying to find balance in their business.

I like the way you mirrored the concept of the regret price and fear that many times we are tempted to settle into that pricing range just to get business flowing and as a result end up feeling very hollow even though we've pulled in clients along the way.

This is an important topic and you've covered it very well by offering candid insight and a brilliant breakdown of how to approach everything from the REACH to the REGRET ends of the spectrum.

I've bookmarked the piece, as I'm sure I will come back to it for reference repeatedly.

I can't for the life of me understand why it has not gotten higher ratings. -shakes head-

My 10 is squarely positioned in the Jenga Tower!
Posted by Rick Itzkowich, La Jolla, California | Jul 31, 2009

Kate,

Excellent article. You're right on when you say that it is up to us to accept or reject work for particular dollars. My experience is that pricing has a lot more to do with how comfortable we are with saying the amount than with any other factor. So if you want to charge more, get comfortable saying it and see what happens.
Posted by John Voris, Carmel, California | Jul 31, 2009

Kate,

You have a unique insight into a difficult issue. I am definitely using your approach. It is very very clever. So many of us in business often think that charging less is being a good humanitarian along with appeasing the worthy issues you raised.

I owned a delicatessen at one time and did a great deal of catering.

I rented a booth over the weekend at a wedding fair and advertised a spaghetti dinner for 30% less than the rest--and I could still make a profit. I felt the others were gauging the public.

I may have been a nice guy but I watched the rest write business and I walked away with nothing.

The lesson:People most often equate price with quality. Who wanted a "cheap" wedding reception?

I doubled my prices the next year and wrote 19 wedding jobs over the weekend.

Good Job!

John Voris - Motivation Analyst
Posted by Christopher Burbridge, Winter Park, Florida | Jul 31, 2009

@Kate

Your comments about pricing based on what you need, versus what someone is willing to pay, I have been thinking about this for days now.

You're right! And in fact, if there was a way to price CDs based on how much they have changed our lives, I might want to pay $500 for a few CDs, and $0.25 for some.

But, because "everyone knows that" CDs are priced at a pretty standard rate (again, just beliefs!), I would expect to pay $10-20.

How much something "should cost" is one of those subjects, like gravity, or consciousness, that everyone takes for granted ... an everyday thing ... yet, when you inspect it, you go right down the rabbit hole to a deep, almost metaphysical discussion. At least, I do! ;-)
Posted by Jessie Wolfrum, Everett, Washington | Jul 31, 2009

When I read the phrase "Regret Price" I felt my stomach drop. I know exactly what that price is and I hate offering it to my clients. You're absolutely right about our power to change our own circumstances.

Something I have noticed in working with clients is that people really value and respect products and services they pay more for.

Thank you for the wonderful insight!

~Jessie Wolfrum, LMP
Posted by Kate Phillips, Seattle, Washington | Aug 01, 2009

Thanks to so many for offering your comments and especially your experiences with pricing! Pricing is a very personal (yet simultaneous) very public thing, one that makes ripples into many other areas of our lives (assuming that we work for a living and not just a hobby).

Rick, I love what you said about needing to be comfortable asking for a certain amount, comfortable with being able to simply say it while remaining in alignment.

John, wow, what an amazing story about doubling your prices and increasing your sales! Thanks for sharing.

Christopher, thanks for continuing the conversation, and I simply must share how you boiled down pricing and value in a comment on my Rating Phobia article:

...the value of anything to someone else, is not related to:
- Who we are
- Our value as humans
- What we need to get, make, etc.
- What The New York Times Book Review would say
- Or, how "good" it is

It is only related to:
- How useful that article is felt to be, to that person, in that moment.
Posted by Alexis Mason, Vancouver, Washington | Aug 01, 2009

Wow! I loved the choice you suggested between a fee and a percentage of increase for the client. I hadn't thought about doing that at all. That was an aha moment for me. I am just now exploring the concepts of NLP and the way you can train your subconscious to expand your possibilities. This article will serve me well, as I continue to refine my vision, affirmations, and neural links. Thank you so much, Kate. Alexis Mason http://AlexistheSpeaker.com
Posted by Linda Jensen, Tumwater, Washington | Aug 02, 2009

Kate,

Great article. We need to charge for our wisdom and so many times are reluctant to do so. I totally agree that creating tiers is important. I like the Chinese menu concept- someone can get the "special package", "introductory offer" or pick from columns A, B, C....depending on the business and the variety of services/products. Developing a rate card can work. Sometimes I offer a "free" session so that a new prospect or center of influence can see the value in a process. Although I am picky on this one.

You have provoked me to re-think what I am already doing!

Thanks so much for sharing your thoughts. ~Linda
Posted by David Kuhns, Springville, Utah | Aug 03, 2009

Kate: Brilliant article. Like so much of your wisdom, it transcends the business world, and goes also into the value we place on ourselves as humans. Do we value our time in our personal, social and educational life as well as in our business life? Do we "price" ourself accordingly? Are we missing great opportunities because we are too busy running around pursuing "good" opportunities? Personally, you caused me to ask myself: Is there something of more value that I can get for less work? Is there someone who I could include in my "circle" who could be mutually beneficial, if I didn't spend my time "wooing" someone who wasn't a great fit? Do I spend too much time "advising" potential web content, SEO, marketing, training, local search or writing clients, when I should be valuing and honoring myself by asking for fair and reasonable compensation for doing what I do better, faster, cheaper than they do? Do we honor ourselves? Thanks again for a great article, and for your insights. Dave Kuhns, web content writer, local search optimizer, marketing, communications and training consultant, and poet. cyrano@cyranowriter.com http://www.cyranowriter.com
Posted by Kate Phillips, Seattle, Washington | Aug 03, 2009

Thanks Alexis, I am also learning to think outside the boxes. (Just traded coaching for workshop space this morning, for a venue I'm excited about supporting and hosting events in.)

Linda, you are correct that "Free Sessions" must be offered with care or you can waste a lot of time. I'm co-hosting an event soon with George Huang on effective introductory sessions, I think it will be posted tomorrow.

And a "chinese" menu can be good, but also take care that you dont offer more options than someone needs (because a confused mind tends to say "no.")

And thanks Dave for your kind words, you are tapping into the "root" of it: how we value ourselves becomes the root of how we are valued by potential clients (and in all other relationships). Also, the importance of looking for clients who are looking for you, rather than wooing those who are not a great fit. That's a recipe for frustration and rejection.

Oh, and I believe you left "River Canoe Tour Guide" out of your description!
Posted by Ted Hilliard, Tracyton, Washington | Aug 07, 2009

This is helpful. Also very timely, as I am now entering a new venture and need to seriously look at pricing my time.
Posted by Kirk Davis, Bellevue, Washington | Aug 07, 2009

Kate,

Thank you for this thought provoking article! I tell my clients that their highest priority is to know and understand their clients and to know and understand their numbers. However, you added a new dimension for me. You have to know and understand your value. I have seen my clients change their pricing up when then get more clear about their value. Now I can refer them to your article.

Kirk
Posted by Kate Phillips, Seattle, Washington | Aug 07, 2009

Ted and Kirk, thanks for reading; I'm glad you found the article helpful!
Posted by Liz Craig, Roeland Park (KC suburb), Kansas | Aug 09, 2009

Kate,

Your article, and all the insightful comments from other readers, have given me a big "aha!" I realized I do have a tiered pricing structure in my head, but I don't go for my "feel GREAT!" price in all situations. I'm afraid I'll scare potential clients off in this shaky economy. But now I see that you can only get more for your work if you ask for it. I am going to re-read all of this again and again.

Thank you all so much!
Posted by Kate Phillips, Seattle, Washington | Aug 09, 2009

You're welcome, Liz!

The beliefs that we hold about our customers profoundly affect our bottom line. When we believe our customers or potential clients can't afford us, we are often just projecting (or attracting what we don't want), or selling them short.

Yes, some people have been profoundly affected by the economy. And some are doing just great. (And the people who negotiate the hardest just might be the "millionaires next door.")
Posted by Lynn Baldwin-Rhoades, Seattle, Washington | Aug 12, 2009

Kate, wonderful article!

I truly believe that by valuing our own worth (financial and otherwise), we're able to give the best of ourselves to our clients.

Cheers, Lynn

Marketing to women to grow your business
Posted by Erin Baehr, Randolph, New Jersey | Aug 13, 2009

Thanks Kate, this is a terrific article, so helpful. I recently had an "aha" moment about discounting my fees... don't know why I never saw it this way before, but when I mentally reduce my fee by $100 or whatever it is, that is $100 less my family will have. The prospect has no idea I took that $100 off, and may not have even had a problem with it, it was my assumption that they wouldn't pay it that deprived my family of that $100. I'm getting better, but it's a process!
Posted by Kate Phillips, Seattle, Washington | Aug 13, 2009

Thanks Lynn, and Erin, great aha. And how interesting that you have discounted fees without the prospect even knowing! In that case, whatever strategic value there might have been was lost, and now the client will want your services for that price every time. (One of the dangers of discounting...)

Kate
Posted by Beth Buelow, Tacoma, Washington | Aug 15, 2009

Hi Kate, Powerful and informative article... thank you!! Pricing is such a touchy subject, and there's so much baggage around it. You helped remind me (as coach) that what I offer is more than "just a phone call." It's the training, certification, business expenses, ongoing development, expertise and experience I bring that makes that 30-minute call possible, and that I'm worth receiving compensation that I feel GREAT about, no regrets.

It also brings to mind the first time I realized that holding a client "whole, capable and resourceful" included my beliefs about their ability to pay. If I assume anything, it's that they are willing and able to make an investment in themselves that we both feel great about; to think less would be projecting scarcity onto me and the client.

~Beth
Posted by Kate Phillips, Seattle, Washington | Aug 16, 2009

Beth, great points. You hit the nail on the head about the space we hold for our clients, and also that they are ultimately investing in themselves.

Sometimes, when people are unwilling or seem unable to pay for services, it is not because they question the value of the service so much as they don't feel they are worth the investment.
Posted by Howard Shore, Miami, Florida | Aug 17, 2009

Kate:

Great points. I find that most of my clients are always underpricing themselves. Often price is more important to them then the people buying from them. I find that if you do your job in the selling process then you can name price. Particularly in the business services arena I have challenged my clients to raise their prices incrementally to challenge their assumptions. Problem being they think they are already charging too much. I tell them to keep raising price until they start loosing a percentage of opportunities they are uncomfortable with. However, we have to see how many of those opportunities are price and if people push back on price can we still offer them a lower price and get them. What my clients find is they are getting significantly higher prices in this economy (in some cases double) with no consequence. Their only barrier was their selling process to position value and their perception of their worth to customers.
Posted by Kate Phillips, Seattle, Washington | Aug 18, 2009

Wonderful, Howard! What fun to see clients challenging assumptions and making more money. I think customers/clients are often "wary" of things that seem too cheap. (See John Voris' great story in his comment above.)
Posted by Tamera Nelson, Moore, Oklahoma | Sep 09, 2009

This is a great article. I just started a home-based business and I have been concerned about setting my fees to high, which I feel will turn potential clients away.

I know what type of person I am, my level of experience, and what I have to offer so that should be my motivation to not price my services too low.

With being a newbie I guess I'm more focused on getting that first client than making sure I am getting paid what I am truly worth.
Posted by Crystal Connor, Seattle, Washington | Feb 26, 2010

I know exactly how you feel Tamera I too was just focused on getting my 1st clients and every signle one on them ended up being under my "regret" pricing =( But I think you need to know what your regret price is so that to can discover your bottom-line, this is a super good posting because setting the pricing is the toughest part of start a new business, I am now working out the details of my feel good price and I will stay here before stepping up on the next rung to feel great pricing. I love this post, thank you so much.
Posted by Eli Poblitz, Pacifica, California | Feb 26, 2010

Whoo - hoo this is the kind of article I'm talking about!

AWESOME! Cause I am all over the place with my pricing ... and need some encouragement (or a guide or something!!).

I really like how you have broken the concept down and it hit home when you put Maxwell Maltz's quote - b/c it rings so true.

I would love to get a quick feedback/assessment of what I offer and what you think I could charge (or you can look at my service and I can tier my prices with your categories). My site is http://www.bayareavr.com if you have a moment.

And if you don't have a moment - I just want to thank you once again for giving me an article to bookmark for inspiration and a bit of encouragement to have a backbone with pricing.
Posted by Kate Phillips, Seattle, Washington | Feb 26, 2010

Thanks Tamera, Crystal and Eli, I'm very glad you have found the article helpful. And it sounds like a couple of you have found yourselves pricing your services (time and energy) in a way that doesn't feel good to you. What IS good is that you've noticed and you can make different choices now.

Thanks for taking the time to comment!
Posted by Pete DiSantis, Seattle, Washington | Feb 26, 2010

Kate, GREAT! I particularly liked how you stratified the pricing. I'm sure I have done work in each of those layers and hadn't realized it consciously.

Now I’m looking to go for “Pie in the Sky” or “Out of this World” pricing.

Thanks for a great article, ciao, Pete
Posted by Kate Phillips, Seattle, Washington | Feb 27, 2010

Thanks Pete! "Pie in the Sky" sounds like "reaching" to me... don't we say "pie in the sky" when something seems really unrealistic?