Pricing is one of those topics where you start off talking about pricing, next thing you know you find yourself swiftly progressing to service offers, client engagement and value propositions and….
Still, pricing is one of the most important things to get right.
It’s so important we have five whole modules and a whole section of the program dedicated to it.
I’d like to share what I believe to be one of the most important parts of the pricing paradigm and that is the five biggest pricing mistakes.
The five biggest pricing mistakes…
Revenue Focus. This is a very common mistake businesses make and can be dangerous. You’re looking primarily at income and paying less attention to costs. The first time you realise you may have a problem is when despite being busy as hell, the bank account is dry.
Market Focus. When there is a lack of understanding of what your market wants and is prepared to pay, you could be leaving opportunity on the table at not know it. It works the other way too. You could be trying to sell one service to an untapped market who want something slightly different. If you find yourself in this position, it might be time to re-engineer your processes to suit a price point.
Underestimating. Underestimating the scope of works is a very common issue. The end result is you designing a business to generate a 30% profit margin, yet wondering why the accountant reports it as 5% – 15%.
Talking price too soon. Now we’re talking the actual client discussion itself. Dropping your fees on the table well before your value proposition is often a reason for leads are abandoning early. If so, maybe it’s time to change your engagement process, aim to talk about value earlier.
Talking price too late. The evil twin sister results in doing a bunch of work and investing a bunch of hours, without actually getting confirmation that the client will foot the bill. Time you are simply never going to get back.
Pricing is a difficult topic. There really is a lot to it, but the good news is if you get it right, it’s a beautiful thing.
I mean, if you could replace that legacy revenue that will soon disappear in 9-12 months by fee uplift alone (like a program member did just last month), you’d be interested, right?
More revenue + more capacity = 🙂
Alas, like anything – ‘you don’t know what you don’t know’ but if you think you’re ready to do some work on pricing (which let me be honest, I don’t see how many firms won’t be this year post RC, I am offering an EOFY discount on our J2S Pricing Module on the program.
Simply enter PRICING in the coupon code and you’re set to go!
Alternatively, you can check out either Practice Foundations or the full coaching program if you’re a larger, more progressive business and want more.
In summary, pricing is one of my favourite things to put a business through. And the benefits of getting it right are significant.
But in many cases, it starts with understanding where you potentially have had issues or made mistakes. From there, you can move on and fix it once and for all.
I hope this has been useful.