On price and value

Sally: What process do you follow or how do you calculate the value of your expertise and therefore pricing?

Jurgen: How to address the difference of price and value when talking to prospects?

Lynne: How did money get so awkward?

Thank you Sally, Jurgen, and Lynne for this week’s questions.

There is so much in these seemingly simple questions. We’re all a little (or a lot) dysfunctional around money, and that definitely spills over into pricing.

I think part of money being so awkward is that we collapse our money with our self-worth. This isn’t useful.

Much more useful is to think of money as a game or a conversation that has no relationship to your intrinsic value as a human being. 

My process when I’m pricing something is to first manage my psychology. So I’m clear that I’m pricing the program, or the thing. Not my expertise, and definitely not me.

I think about who I want to help, what problem I can help them solve, and what journey I can take them on. What is the benefit to that person and what that is worth.

I then think about the perceived value. How would the client talk about what the program is worth? What’s the story they would tell their spouse, or their boss, or their board?

I consider what similar programs cost. What else is out there? What’s the range that would be considered normal for this thing?

And finally, I think about what it will cost me to put it together. How much of my time or other people’s time will be needed, and what does that cost? I used to do this bit first. My first coaching program was priced at my hourly rate times the number of hours. But having been around a bit I now do this last.

In summary, this is more art than science. The ingredients that go into the pot are the benefits, the perceived value, what else is in the market, and the cost to you. Then you stir them up and see what comes out. And finally, you test it and see if people buy your thing or not.