Fair pricing refers to a pricing strategy that is transparent, ethical, and takes into consideration the value that a product or service provides to your clients. It is based on building trust with your clients and cultivating long-term relationships, rather than just maximizing profits in the short term. It’s fair to you, and fair to them.
In this article, let’s look at some of the key elements to have in place in order to apply a fair pricing strategy.
Only work with ideal clients
Fair pricing is much easier if you only sell to the right people at the right time.To find your ideal clients, you need to start with what matters most to you. Self-discovery is critical in setting higher standards for yourself and your clients. Start by finding your authentic self as an entrepreneur.
Once you know who you are and bring more of you to your marketing, you will resonate with only your ideal clients. Now, let’s move to the next step.
If we’re to use business as a lever for good, we also need to apply ethical behavior in our marketing.
Improve your Discovery Call Process
Usually, heart-centered entrepreneurs offer some type of free discovery call, coffee chat or whatever you call yours. The problem I often see with these calls is that there’s no clarity about the intention of the call. Are they just a ‘pick my brain for 30 minutes’ call or are they a ‘how can we work together’ call? Since you are the business owner, you need to bring clarity.
The best way to do this is by improving your free consultations intake form in order to ensure a good fit between your offering and the potential client. This involves asking better questions and giving you information on where they’re at on their journey before scheduling a meeting. Having these important details before allowing them to book a time with you helps you determine whether or not they are a good fit for your business and find out whether they share your worldview and values.
Examples of questions to ask in your intake form:
- How many years have you been in business?
- What’s your current monthly revenue from your business?
- What’s your average client value?
- Describe why you want to talk to me? Why me?
- Have you listened to my podcast? Read my blog? Read my book? Etc
- If we both decide it would be beneficial to work together, are you ready to invest xyz amount?
By improving your discovery call process, you prepare the terrain to only engage in Fair Pricing Conversations. You empower your clients to show up responsibly.
Fair Pricing Conversations are…
- Not one-directional; they are real conversations between two humans.
- They are gentle because there is no manipulation or convincing.
- They are based on curiosity, empathy and perspective-taking.
In a Fair Pricing Conversation, we’re purely exploring the questions:
- Is this product or service the right solution?
- Does it come at the right time for our client?
- Is the price fair and a good fit for our client?
There’s one more thing we need to get out of the way before we can go into the strategy piece for fair pricing.
What Imposter Syndrome has to do with Fair Pricing
Imposter syndrome can be a significant barrier for heart-centered entrepreneurs looking to set fair prices for their services or products. In order to overcome the nagging voice in your head you need to shift your mindset towards recognizing your value and expertise, and embracing the unique qualities that make you and your business special.
Your worth is not dependent on the number of zeros in your revenue!
Your worth is not dependent on whether you fill your next course or not!
Your worth does not decrease if you don’t make your goal this month!
And your value doesn’t decrease based on someone’s inability to see your worth.
In plain English: you’re not a failure if people don’t buy your stuff!
Your worth is innate.You’re good enough.
(excerpt from the Selling Like We’re Human book)
Listen to this episode on the Humane Marketing podcast about What Imposter Syndrome does to your Prices.
Strategies for implementing Fair Pricing
Ok, let’s get into the strategy stuff.
In order to apply Fair Pricing you need to know your Costs
When setting prices, it’s important to consider both the value your product or service provides to your clients, as well as your own costs and time investment.You need to figure out approximately how much it’s going to cost you to deliver what you’re doing for your clients.So let’s think about the different costs you incur when working on a client project. (excerpt from the Selling Like We’re Human book)
Of course, you’ll be spending time on your client. But it’s not just time that you spend working directly with the client. For example, if you’re giving a ninety-minute workshop, you will have to prepare for that workshop. You have to research the client’s industry and prepare the PowerPoint slides, worksheets, or handouts. All of this takes your time. It’s simple math: time used x your hourly rate. You need to run those numbers so that you know the total cost in terms of time used.
If you have an assistant or other employees, add their time x their hourly rate to the cost.
If you’re traveling to the client’s location, or another venue, you should also take into consideration the time that you’ve lost. To take our example of the ninety-minute workshop again, if you’re running it online, then it really only takes you ninety minutes, plus approximately twenty minutes for setting up the call. But if you have to travel to another city, you lose at least half a day, if not the full day. Because instead of working on another client, you’re spending the day in transit, maybe prepping for the workshop. This is a cost that you should include in your price.
As the owner of a small business, even if it’s a micro business, you have overhead costs. I’m thinking of your monthly rent, taxes, insurance, office supplies, and utilities (phone bill, electricity, etc).
Of course you can’t calculate these costs to the penny; that’s why we often just think of overhead costs as a flat fee. The important thing is that you see that you have these expenses. Because if you forget to work them into your prices, you’ll always end up with the short end of the stick.
Tools You Need to Run Your Business
As online business owners, we usually don’t have big rents and other infrastructure to take into consideration. However, there are quite a lot of costs involved in keeping the “lights on” online. Make your list.
Evaluate your intangible value
I like to divide it into three components:
When I first learned about value-based selling, I was told to base it all on numbers. The formula was: Value = % of growth and/ or % of savings (now and over time). So let’s say I create a LinkedIn profile for a client from A to Z. The tangible value is the new LinkedIn profile. The intangible value is the potential revenue growth they get from having this expert LinkedIn profile and getting new clients from LinkedIn. Depending on their average client value, that can be in the thousands of dollars. The same thing applies to my brand designer Nela. What she delivers is the new logo and the branding colors. But the intangible value is the potential revenue growth I get from this improved professional presence.
If you’re selling services, you’re very likely also selling personal growth. Let’s say you offer a five-week group course that teaches career coaches how to create their signature program. The tangible outcome from attending this course is having an outline of their program. But besides that, your participants have leveled up their business, they have gained confidence to sell more than their one-on-one time, they have had the chance to make connections with other career coaches and feel less alone, they have understood what their Unique Value Proposition is, and so much more. It’s intangible because it’s future oriented.
As the word growth indicated, intangible value is often future oriented, and that is always harder to measure, but it’s also part of the value you’re bringing with your offer.
In that think tank I mentioned earlier, this point was highlighted as well. Yes, with all the data and AI we have available, we’re really good at real time measurement, but we’re not paying attention to the long term since we don’t have data for that yet. Are you surprised we find ourselves in a climate crisis?! Data and tangible is great, but intangible measurement is just as important, if not more.
Other Intangible Value
The third component is even more feeling oriented. When using it to describe the value of your offer, it doesn’t just talk to your client’s right brain, it actually talks to their heart. On the sales page for my Humane Marketing Circle, the monthly call for Humane Marketers, I have the following section (at the bottom of the page, after talking about the more left-brain things like what they get and logistics) :
When you join the Circle you’ll feel
- supported in your mission to share your gifts with the world, but without the hustle
- inspired and uplifted by the conversations, by the focus on the positive, by the fact that
- you’re not alone, by the joy and ease
- empowered to market your business with authenticity
- heard and seen as you get the chance to share your own experiences, in plenum or in
- break-out rooms
- excited about the possibility to increase your impact and make a difference
- nourished by the kindness and empathy of everyone else in the group
- part of a truly global community who wants to be the change they want to see in the
Besides very pragmatic business information, we also hold space for the human connection, the doing and the being!
The intangible value is a big component of what I’m offering in this support group, so it’s key to highlight it.
But I think even when it comes to business offers, people no longer decide only with their head! They also use their heart!
Offer different and fair pricing options
I’m a big fan of offering different pricing options at different price levels and different uses of your 1:1 time.
For example, you could offer a group program at a lower price point, and your 1:1 coaching at a higher price point. Your clients all are in different financial situations and have different needs, so letting them choose whatever level fits their budget and requirements feels fair.
Offer payment plans
If you only work with the right clients, there’s an absolute trust and therefore payment plans are absolutely part of a fair pricing strategy. And not with a ‘let me make more money with the payment plan’ approach. I’m sure you’ve seen it: yes, you get offered a payment plan but then the price is like 20% higher if I chose that option. How is that fair? It’s not. It just shows me that you don’t trust me that I’ll actually make my payments. If that happened to you, then I hate to break it to you but you were working with the wrong clients. Your ideal clients are trustworthy.
A few questions to ask yourself in order to price fairly
- What are my pragmatic costs for providing my service, including my time, paid time, overhead costs and tools I use to run my business?
- What is the perceived value of my service or product to my ideal client (tangible and intangible value)?
- What is the minimum price I need to charge in order to cover my costs and achieve a reasonable profit?
- What are my long-term financial goals for my business, and how does my pricing strategy support those goals?
- What are the demographics of my ideal clients, and how might their income and spending habits influence my pricing decisions?
- What pricing models (e.g. hourly rates, flat fees, subscriptions) might be appropriate for my service or product, and why?
Fair means transparent
Transparency and clear communication are key factors in setting fair prices for your services or products. Your clients will appreciate your open and honest pricing strategy, and clear information about the value and benefits of your offerings. This helps to build trust and establish a reputation for integrity, which is essential for your long-term success. By clearly communicating your pricing strategy and being transparent about your costs and pricing decisions, you’re demonstrating your commitment to fair and ethical business practices.
[insert 7Ps mandala visual]
(Fair) Pricing is just one of the Ps of Humane Marketing
Pricing is the 5th P of the Humane Marketing Mandala. If this Humane Marketing framework got you curious about the other 6 Ps of the Humane Marketing Mandala then let me quickly share the other Ps with you:
- Passion: As a conscious entrepreneur, being of service and making a difference is your driving force. This means that your main objective with marketing is to be of service to others all while running a successful business & making money.
- Personal Power: Your uniqueness only fully comes to life (and business) once you learn about and have a deep understanding of your unique super powers.
- People: You don’t need to be liked by everyone; you just need to be loved by your tribe. So let’s work on finding out who’s in your tribe. How do they think? What do they wear? Which Youtube channel do they watch? Which books do they read? What language do they use? Do they have the same values as you?
- Product: This is where we build a product or service that is so good, so compelling, so unique that people simply will want to buy
- Pricing: We discuss money, as well as different ways of pricing your services & products that follow the guidelines of the Humane Business Paradigm, a win-win that is about serving your community while making money. I call that Financial Integrity.
- Promotion: If we are conscious of always marketing from the inside out by reminding ourselves of our Passion, Personal Power & People, the promotional activity becomes almost effortless. This is where ‘daring to be different’ and using vulnerability and authenticity is so essential.
- Partnership: Isolation creates anxiety! As Gentle Marketers we believe in collaboration and make relationship-building a priority in our business & marketing model.
Need help with fair Pricing?
Fair pricing is important because it creates a sense of integrity and authenticity that your clients appreciate and respond to. By being transparent about pricing decisions, you showcase your commitment to ethical and humane practices, which builds trust and credibility with your clients. Ultimately, fair pricing is not just good for your clients, it is good for business too, as it creates a more sustainable and mutually beneficial relationship between you and your clients.
If you need help with your fair pricing strategy I’ve created a really effective program that will help you implement everything in this article.
It’s a hybrid program with a video component and worksheets, as well as a 90-minute one-on-one with me to discuss your pricing strategy.
Check out the Fair Pricing Mini-Course – now with a 1:1 coaching component to be even more effective!
Other Resources You Might Enjoy
- Podcast episode: Authentic and Fair Pricing Strategies
- Podcast episode: How to price your services fairly
- Podcast episode: How to have a fair pricing conversation
- Podcast episode: Should I charge more to get more motivated clients?
- Podcast episode: What Imposter Syndrome does to your prices
- Podcast episode: Understanding how to price your offers
- Podcast episode: Pricing for Gentle Marketers
- Manifesto: The Humane Business Manifesto (no opt-in).
- Creed: The Humane Marketing Creed (no opt-in).
- The 1-Page Marketing Plan (email opt-in with 7 email prompts to help you think about the 7Ps of Humane Marketing in your business).
- The Humane Marketing Circle, our community of Humane Marketers.