Have you been told that you aren’t charging enough for your services?
And even though you like the idea of earning more money, do you find it really, really hard to raise your prices?
This article is part of a series about setting your prices. It will help you understand when it’s OK to discount, and when it’s time to bite the bullet and charge what you’re worth.
Discounting No-No #1: To Get The Sale
It’s the end of your sales conversation. You’ve talked to the prospective client about their problems, you’ve discussed how you can help them, and you’ve made your offer.
And then they devastate you by saying no.
In a desperate attempt to stop them from just walking away, you quickly offer to discount your price, or even give away your services for free.
I’m here to tell you, this is the worst reason to discount your prices.
For starters, the price might not even be the reason they said no! (Which means that lowering it won’t get them to say yes).
And secondly, you’re really not helping the client as much as you may think you are, by making it so easy for them to get the help they say they want.
But you passionately want your clients to receive the benefit of your work. So much so, that it pains you greatly for them to say “no thanks” and walk away, when you know how much you could help them. So…. you undercharge.
I call this the Passionate But Penniless Anti-Selling Wound™ archetype.
Marilynn was a classic example of this archetype, until she took my Heal Your Sales Wounds™ class and her eyes were opened as to what a disservice she was doing – not only to herself, but also to her clients.
You can read her story here – including how she cured herself of her Passionate but Penniless Anti-Selling Wound™.
Discounting No-No #2: To Avoid the Upsell
Maybe your reason for discounting your services is more strategic.
You, being the expert that you are, understand that the project your client has hired you to complete is complex. And while your client might think they can save money by only paying you to do the bare minimum, you know that won’t work out in the end.
What you should do is patiently explain to them why the project is more complex than it seemed at first, and why they really need to hire you to do more than what the original scope of work called for.
But you hesitate to do that. You hate asking for more money – so much so, that it almost feels like less work to just do the extra parts of the project for free, rather than go through the anxiety of trying to upsell your client.
So you go ahead and “throw in” the extra steps for free or at a steep discount, telling yourself that in the long run it will make your job easier and the client happier, even though you aren’t getting paid for the extra work.
I call this the Strategically Underpaid Anti-Selling Wound™ archetype; and you can read more about it here.
One Good Reason to Offer a Discount
While these Anti-Selling Wound™ archetypes are negative reasons to discount your work, it doesn’t mean that you should never ever offer a discount, or that every impulse to offer a discount is an example of an Anti-Selling Wound™.
One great reason to offer a discount is when you’re brand new in business, or when you’re established but you’re offering a new product or service.
Read “Discounting as Part of Your Learning Curve” if you’re brand new in business.
Evie’s Story
Evie is a mindset coach who was getting ready to launch a new program a couple years ago, and was considering offering it at a really steep discount, just to get some people to enroll in it.
After all, this was a brand new program for Evie. She wasn’t completely confident teaching it, she didn’t have any strong testimonials yet, and there were definitely some kinks to work out in the delivery of the program.
Her coach at the time overlooked these practical considerations and just gave her the pat advice, “You’re under-charging. Raise the price.” So she did what her coach asked and promoted the program at a high price, even though she felt really uncomfortable doing so.
What do you suppose happened?
You guessed it – she didn’t enroll a single person into the program.
One reason for this was that she was just too scared about the price point her coach had urged her to set for the program, so every time she talked about it she lacked enthusiasm and certainty.
But another reason was that because it was a new program for her, she didn’t have any success stories to tell, or any specific ways of describing the benefits of the program. This meant that her sales copy just wasn’t that strong. She didn’t have the necessary data to make it persuasive.
After Evie took my Heal Your Sales Wounds™ course she enrolled in private coaching with me, and we worked on re-launching that same group program.
- Pricing. We settled on a price point that did feel like a stretch to her, but which didn’t terrify her.
- Sales copy. She didn’t have any success stories, so instead we also came up with language that was authentic, and thus quite compelling. She stated plainly that this was a new program so there were no proven results, and that’s why it was being offered so inexpensively. But then she also said that other similar programs she’s done have created tremendous results – so she expected that this one would do the same.
- Confidence. Between a price point that felt doable to her and the really authentic sales copy that talked about how great the results had been in her other programs, Evie felt really confident and enthusiastic as she began promoting the program.
And what do you suppose happened this second time she launched her program?
You guessed it, this time Evie sold out the program!
Even though the money she earned was nothing to write home about, thanks to the fairly low price point, she still felt great about her success.
She now has the opportunity to work with a large number of women and get those testimonials she needs – not just for her sales copy, but also for her self confidence. So that down the road she could launch the program yet again, but for an ever higher price.
Read another case study here about an entrepreneur who went from under-charging for her services to getting paid what she’s worth.