£30; the price I charged for my first writing gig. The company had found me on Twitter (of all places) and offered low-paying, regular work. Overtime, other companies began to request my services. My freelance writing career seemed to be launching, but my pay left me stressed and bitter. Despite knowing I was worth more; I didn’t know how to be confident in pricing. Continually, I undersold myself and developed an insecure writing persona.
It’s an issue that affects most people when starting a new business. We typically begin by offering the bare minimum, pulling in clients wanting the cheapest deals and not necessarily the best skill. (Though sometimes they’re greedy and seek both). A friend of mine spent years studying and mastering her craft, providing a high-quality service. She still however, worries about what to charge her customers. Since the pandemic, some of her ‘regulars’ have asked for lower prices which has put her in a difficult spot.
Unfortunately, when we gather career expertise, we don’t necessarily gain pricing wisdom. As a creative, I spend most of time developing creatively – not accumulating business sense. (There was me hoping writing would save me from maths). It’s a problem that can cause self-employed workers and small business owners to quit their plans within a few years.
What happens when you lower your price?
There are many negative effects that can occur from underselling yourself. Lowering your price or staying at a low price can impact your career confidence as well as business reputation. Poor pricing can:
- Make you work much harder to earn your desired income.
- Lead to you feeling unappreciated and therefore, dissatisfied with your work.
- Attract more clients in the short-term as oppose to long-term.
- Imply you or your business is missing something that your competitors aren’t.
- Create a negative assumption on your skills and business results.
- Encourage you to question your own ability – why do people believe you’re not worth more?
With that said, here are 5 ways to be confident in pricing to avoid the above from happening.
1. Know what you’re charging for
Let’s pretend you’re a personal trainer. You might say you charge people for helping them to get in shape. Clients pay you to achieve their body goals. And while true, you would also want to consider the investment you bring and overall long-term results. As a Forbes article explains, it’s not just about the work you do in itself.
A personal trainer can utilise their expertise to provide effective workouts around a client’s timetable, quicken weight loss or muscle results and offer nutritional support. All this may lead to a much happier, healthier client who feels more confident and content in themselves. If a personal trainer had the skill to achieve a client’s aims with only three 30-minute weekly workouts, it wouldn’t make sense for them to charge simply on the short workouts themselves. With an hourly base rate, they’d end up losing income.
Many new entrepreneurs decide most of their rates based on hours: I work x amount per hour, so this seems adequate. And sure, if you were to offer me £100 for 15 hours, I’d certainly look at the hourly rate as a reason to say no. But work is about more than cost per hour. Client care about your ability to create the results they are wanting. Your rate is mainly based on what you can deliver for them.
I found it helpful to write a list of all the skills and know-how I’ve acquired which have evolved and created the services I offer.
2. Recognise your value
When my writing began to receive positive praise, I understood I had the experience to charge higher rates. I knew from my list; I could produce a client’s expected outcome. Yet there was still a lingering insecurity. I kept telling myself, ‘What if you charge higher and mess up?’ ‘What if people don’t like what you do?’ It almost made my career more real – no longer could I hide behind low prices. I was letting people know I was worth something and with that, I had to live up to an expected reputation.
That can be daunting for anyone self-employed. If you feel worried about what will be expected of you if you charge a higher rate: Ask yourself whether it’s due to overpricing or insecurity. To be confident in pricing, you want to feel you offer a great price for yourself as well as your client. If I was to charge £1,000 for a 500-word article for instance, I would crumble under pressure and consume myself with doubt that I wasn’t good enough.
If insecurity is impacting your worry, remind yourself of the positive feedback and results you have already delivered. In my journal, I have a page dedicated to every big win. Whenever I feel insecurity knocking at my door, I turn to this page and read aloud each point mentioned.
3. Learn pricing psychology and business acumen
One of the best books I ever bought was on business tips for budding entrepreneurs. I came across so much useful information on how to better market my services, communicate my prices with clients and figure out when to say no. If you have little knowledge on the business side of your work, I highly recommend looking for resources to help.
It’s also worth learning about pricing psychology. How our brains react to certain numbers.
4. Avoid saying yes to low prices
How can you be confident in pricing if you’re accepting rates too low? Before you know it, one low price will lead to a low permeant wage. Look at the people presently approaching your business. Are these the clients you want to attract? If not, why do you feel your target audience is not reaching out?
The thing to remember about pricing: It’s never too high if a person is willing to pay.
How often have you admired a house or a fancy car but thought to yourself, that’s way too expensive! Yet if a willing clientele is ready to accept, that price becomes affordable. The trick to pricing is knowing what your desired client/customer is after. How much expense are they prepared to invest? How do you show them you’re the right person?
The more target audience research you do and the more you examine your ideal clients’ requirements, the more you’ll feel confident in pricing.
5. How to be confident in pricing: Trust your instincts
Subconsciously I believe we know exactly when we’re underselling ourselves. It’s an icky feeling in our stomachs telling us we’re being ripped off. When a client contacts me with a price, I let their proposed rate sit for a few hours. I break down the work involved, imagine myself creating the work and then reflect on the value.
At times, clients may request you lower your prices – some will say you’re too high. If you’ve done your market research and know your competitors’ rates, there’s no reason to adapt. Focus on your unique selling points – explain the results obtained from your prices.
What have you done to become more confident in pricing? Would you include any other points? Read next: How to Improve Executive Presence