How Should I State My Rates?

Whether or not you post your prices on the Web or in your promotional materials is a personal matter, and depends on several factors:  your line of work, your personal style, and what kind of business you would like to attract. Marketing gurus have vastly different opinions on how to present your fees. These are the three most common approaches.

"Hook and Reel"
Some experts advise a sales-oriented approach, in which you sell the potential client on your product or service first, and reveal prices later as you come close to closing a deal.

Benefits:
• It may be easier to negotiate prices in your favor if you don't state them upfront.
• The client may be inclined to place a larger order after you've demonstrated to them the value of what you have for them.
Possible pitfalls: 
• The customer has a limited budget and is unable to meet your bottom line, so you've spent time and effort (which translates into cash for us "solopreneurs") on someone who is not your target market.
• You risk alienating clients who feel you are withholding information in order to manipulate them; even if they do business with you, they may not trust you entirely.

"Honesty Is the Best Policy"
You have a price list, which, though subject to change, is the same for everyone.

Benefits:
• What your potential clients see is what they get, and in this way you have established trust.
• You quickly weed out window shoppers, fence-sitters, and those who are unwilling or unable to pay your fees.
Possible Pitfalls:
• Some prospects will find you overpriced, underpriced, or, if they are negotiators by nature, too rigid. 

"The Electric Slide"
"Prices range from A to Z...however, we're negotiable, flexible, and will design a program that's just right for you."

Benefits:
• You may appeal to a broader audience, and therefore attract more business.
Possible Pitfalls:
• You risk attracting bargain hunters who will nickel-and-dime you to death. No one wants to pay on the high end of a sliding scale.

As you are deciding which approach is right for you, it’s useful to look at any fears you may have about making the wrong decision regarding pricing. Write down each belief and ask yourself if you can absolutely know that it’s true. Notice how you conduct business when you hold the belief; how the thoughts you have may hold you back, produce anxiety, or put you into “people-pleasing” mode. How efficient is it to stick to your pricing paradigms? Do they feel peaceful or stressful? How might you approach your business, and your clients, differently if you didn’t believe this thought? And finally, turn the thought around; see if its opposite could be as true, or truer, than your original statement. 

"My fees will scare away potential clients." 
If that's true, they'll be scared when you finally tell them how much your services will cost them.

"My fees are too high."
Is that true? Not if they are in keeping with industry standards…your competition…what the market will bear in your region…or if you already have customers who are gladly paying your fees.

"If I lower my fees, no one will take me seriously."
They won't? Maybe it's truer that you won't. Another belief to look at here is, “Only high ticket has high appeal.”

"I need to earn a lot more money."
Do you really want to set your prices based on neediness? If you do, you are likely to price yourself too high; and then you will be uncomfortable sharing your fee structure with your prospects.

"If I state my fees upfront, I'll get less business."
This could be a good thing. The bargain hunters will go elsewhere, and you will get clients who pay you what you are worth.

"My fees are set in stone."
With this mindset, you could be cheating yourself out of some wonderful clients who will reward you with their loyalty, and referrals.

Ask yourself:  Do you want volume—many clients and customers—or do you want to work with people—hopefully many of them—who specifically want your services and are happy to pay for them over the long term? Are your fears about stating your rates legitimate, or are they covering up a deeper issue you have about working for yourself? Are you convinced in your heart of hearts that your fees are fair, to your prospects and to yourself?

Your answers will provide you with a clear picture of who you are, with whom you want to work, and the real value of what you have to offer. When this happens, you won’t experience the fear of rejection, and you will be able to discuss your prices with honesty, anytime and anywhere.

SIDEBAR: Question Your Beliefs About Pricing

The Work of Byron Katie is a simple self-inquiry process that can help you question thoughts that cause you stress in your business, and in your life. Here’s an example of The Work.

“People will be scared off by my fees.”

1. Is it true?
Yes, it feels true. In the past. some people have told me I charge too
much.

2. Can you absolutely know that it’s true?
No, I can’t absolutely know that they will be scared. Most people I speak to seem okay with my fees, in fact.

3. How do you react when you believe that thought? What happens?
I’m embarrassed when I’m asked about my prices. I imagine I will be met with disapproval. I apologize, explain, defend. I make my work all about the money. I forget why I love this business. I resent my prospects; I’m in their business mentally. I procrastinate about marketing my products and services.

4. Who would you be without that thought?
I''d review my needs, my market, and my services and charge an amount that feels comfortable and reasonable. I'd be completely upfront about that amount, and pleased with it when I receive it. My happiness and self-worth wouldn't be dependent on anyone becoming my client; I'd be free of the need for anyone's validation. I'd see who shows up and says "yes," and be grateful to them. I'd be wlling to adjust my fees if they're not working for me or if it benefits both my client and myself to make an adjustment for them. I'd offer flexible payment plans. I wouldn't ever "play small."

Now, turn the thought around:  Is this turnaround as true or truer?
Examples:  “People will not be scared of my fees.” Just as true:  My current clients aren’t scared of my fees. The kind of people I want to attract know the value of what I provide and are happy to pay me, even if it means doing it in installments.

“I am scared of my fees.” That’s truer. I tell myself stories about how people will judge my rates, and I scare myself.

To learn more about The Work of Byron Katie, visit www.TheWork.com.

The Work of Byron Katie, (c) Byron Katie International.

(Note:  This article appeared in WHY Magazine online's March-April 2008 issue under the title, "To Tell the Truth:  The Benefits and Pitfalls of Stating Your Fees Upfront"  The "sidebar" did not appear in the original article.)