The dark art of pricing

At our quarterly Thought Leaders Business School immersion on the weekend I was asked a really good question. It’s a question I get asked a lot.

How do I price my program?

I think there are three elements that go into this.

The starting point is your target day rate. How much do you want to make in a day? Let’s say you want to make $500k in your practice and do 100 days delivery in a year, then your target day rate would be $5k. Then you just work out how much time the program takes to deliver and multiply it by your day rate. So, if it was a coaching program with 8 one-hour sessions, that’s essentially a day, so your starting point is $5k.

Secondly, look at what the market is used to paying for this kind of thing. If you are selling a keynote to a professional conference organizer, they are used to paying between $5k and $12k for a non-celebrity expert speaker. Less than $5k and you’re a risk. More than $12k and you price yourself out of most conferences.

And finally, what will the market bear? What will they pay for you to solve the problem that is keeping them awake at night?

Somewhere in that mix is the number for what your program costs. Once you land on that number, you have to make sure that the value you deliver is a significant multiple of that number. And then run an experiment – offer it to people you want to help and see if they buy it or not.