How to price your product or services (psychological tricks to raise your rates)

I’ve been making a living online for almost a decade, but I still have trouble pricing my services and offers. I usually focus on making everything a good deal.

I include lots of bonuses and options to make the value seem incredible.

I also tend to price low.

This is probably a mistake.

I see book coaches or other people offering online courses on publishing that charge much more than I do. I dislike selling or convincing people to hire me or buy my stuff.

So I’m always interested in positioning and pricing – ways to convince people to spend more. 

Today I’m in Colombia and I had three realizations.

#1 People want the best

People searching for help online are rarely looking for the cheapest price. Sure, money is a factor, but mainly, they want someone who is going to get the job done right. They’ve probably been burned by cheaper offerings that promised much and delivered little. They’d rather spend more money with someone trusted who can really provide results.

Unfortunately, it’s difficult to gauge someone’s credibility and expertise online. Sure they have testimonials and a shiny website, but how do you know who’s really the best at what they do?

Pricing is one of the easiest value-anchors.

For example, my new course on book marketing will cost $349. It may seem like a good deal to some authors, but if they had to choose just one book marketing course, they may pick one that’s $997, just because the higher price makes them assume it’s better quality. Same thing for intangible services like coaching.

If you were serious about your business, would you rather hire a coach charging $349 for six months or a coach charging $997 for one hour? People don’t necessarily want lots of long-term hand-holding. They want quick, fast results. They want an expert who can simplify and shorten their developmental curve, so they can start making money now.

It’s too bad that people associate higher prices with quality, because the correlation is not always accurate. In my case, I’ve always tried to charge less so I can help people without making them spend too much. But that’s not working for me anymore. In the future, I’ll have much cheaper, DIY options, and much higher-priced options for personal consultation and feedback. I don’t want to be the cheapest in my field, I want to be the best in my field.

#2 Simple is better

I usually package tons of resources together in one epic package deal, and add bonuses and discounts. That comes across as desperate and salesy. Adding more value demonstrates lack of confidence in the main offering. People don’t want everything. They don’t want tons of bonuses. They want one, simple solution that will solve all their problems.

Think of the iPhone 7. Apple decided to ship with less features – no headphone jack. 

That demonstrates that they’re the best. They’re so good, they know people will buy their new product even if it’s missing crucial features that they want. I don’t need to pile on extra bonuses and make every sale a flash deal. Simply offering a service or product at full price, with no flash countdown deal, extra bonuses or deal can boost credibility (“if he can charge this much while giving so little, he must be really good.“)

Resist the urge to add on too many extras. Keep your core offer simple and basic, charge a high price, establish value and credibility with testimonials. 

#3 Add a dog or cat

Something you’ll see a lot of brand personalities do is make their pet part of their brand. In Medellin, Colombia there are a lot of street performers. They stand in the middle of the street at red lights and put on a show. My wife got trolled by a mime today. But we saw one guy dancing with a little chihuahua. It was adorable. A guy dancing wouldn’t have been anything to stop and watch, but that dog though… standing on its hind legs and wearing a mini-sombrero. That made us stop. Instant sympathy for the dog and its owner made us more likely to gift some money.

Having a pet humanizes us and makes people like and trust us more. It’s a simple trick. I don’t use it because I don’t have a pet, so I have to look for other ways to humanize myself.

The next best thing, is telling stories. Telling stories and getting people to see images in their heads, like I just did with the story above. I don’t do this often, but it’s really important, and I need to start doing it more. Especially as my wife and I travel full-time. I’m not a travel blogger, but I need to start sharing all the interesting stories and pictures from our travels. It should be a part of my brand and business, because it humanizes me and makes me more interesting. It helps people establish a bond with me as a person, rather than just someone who shares information and knowledge.

#4 Ask for the price you want

For the past several years I’ve been charging $500 an hour for consulting, but I didn’t make it easy, because I didn’t really want the work. I’d rather actually do something for you than just talk about it – so I mostly focused people towards my cover design business. I don’t even have a contact button on this site, and I don’t sell anything. But this blog gets a decent amount of traffic. I need to make it easier for people to hire me; and I need to charge a price I’m comfortable with.

I’m actually frustrated with cover design and will be moving mainly towards selling online courses and providing coaching and feedback, which means I need to start leveraging my traffic into sales.

Right now I’m getting optins with free offers and very gently suggesting they upgrade to a paid package or course after providing value – but I’ll start experimenting with just putting my offer in front of them right away. 

I get about 1000 visitors a day on my websites. About 50 signup. About 20% of those open all my emails. So by the time I finally ask for the sale, my offer is getting seen by fewer people. The solution is most likely a “tripwire” or immediate upsell offer. I’ve been hesitant to offer that because I want people to trust and like me, and not feel like I’m just trying to sell them something.

But the truth is, they are looking for what I have, and many of them need it right now. Why wait to solve their problem or frustration? If they don’t want the offer, fine – but at least they know it’s there.

I’m fascinated by online business, branding, positioning and sales. I’m definitely not an expert, though I do have a strong understanding of how it all works. By the end of 2017, I’ll be making a living with fully automated, passive income funnels, which will free up time to be writing and creating full-time (which is basically the ideal goal of my brand, Creativindie: “make more, market less.”)

If you have the right offer at the right price, and get traffic, income is just a matter of conversions.
But it’s also scalable. Which means, once I figure out my offers, funnels and prices, I can start advertising specific pages or content to get people into my email list, and 10x my income. 

Which is good… because I just found a castle I want to buy, on a lake, in Italy.

Have you discovered any pricing hacks or tips? Share them in the comments!

About Derek Murphy

I help authors and artists turn their passions into full-time businesses, make a bigger impact, and blaze a luminous trail of creative independence. Right now I'm in Taiwan finishing a PHD in Literature, writing several books, and managing a handful of online businesses. Find me

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