The 3-Tier Pricing Model™ (for money-anxious entrepreneurs…)
This article is for anyone who has ever felt anxious setting prices for their services.
As someone who spent the first years of business having a small (read: big) meltdown every time I had to talk about pricing, I know how it feels to not know where to start with asking for money. Below are some mantras, techniques and advice to go through — and hopefully some reassurance that you don’t have to get it all right first time.
You may disagree with some of this advice, and actually it’s good if you do — because it’s important always that you do what feels right for your business and financial situation. Don’t hesitate to speak to a financial adviser if you are unsure about making any big decisions about the financial side of your business.
Finally — good luck! Once you can start feeling in flow and pricing intuitively it will take away a lot of stress and bring a lot of freedom.
1. Don’t worry too much about the price you start off with.
I heard Deborah Francis-White say that in the first year of acting you shouldn’t be aiming to get jobs from auditions, but to get data about what’s working and what’s not.
How would it feel with pricing to see your first few sales as feeling out the market — see what people are willing to pay, what feels good for you, and what doesn’t?
Play around with it.
At the start I put so much pressure on myself to find the right price for my services.
I thought if it was too low I was missing out on key revenue.
If it was too high I was going to sound greedy and they would say no.
I put off having conversations on the phone. I couldn’t quote. I didn’t reply to emails about pricing. I had absolutely no idea where to start.
The key belief under all of this was: ‘I am going to get it wrong and I am going to lose out of money and not be able to pay my rent and that means I am a failure.’
Talk about pressure.
2. It is less about the number you ask for, and more about how you FEEL about that number.
When we tell someone a price we are not only saying a number, but are also communicating something energetically about how much we feel we should be paid.
Let’s remember, there are coaches that charge £10,000 for a 1hr session and people don’t bat an eyelid because they feel that is totally reasonable for where they’re at in their career.
There are other coaches who would struggle to ask for £40 — and we would feel it was too much money because of it.
The client will always feel it if you feel it’s too expensive.
3. THE 3 — TIER PRICING MODEL™
Through much trial, error and many an anxious phone call I created this system that helped me FEEL INTUITIVELY how much I should be charging.
Every price in every exchange provoked an emotional and visceral reaction that would tell me how close to a Fair Exchange I was.
The 3 prices I now write down before every phone call about pricing are:
THE RESENTMENT PRICE — the price at which point you’d feel resentful doing the work. You can feel this in your body. It’s like a low, dragging down energy from the bottom of our torsos.
There are two ways to find your resentment price: 1) Start at zero and count up until the resentment goes away. 2) Start at a random number and count down until the resentment kicks in.
Write it down, you’re going to need to know at which point you can walk away.
THE FEEL GOOD PRICE — This is the number at which point your eyes start lighting up, your chest expands and you think ‘that would feel really good.’ It’s not so ridiculous that you panic about what you then have to deliver, but it’s a number that kicks you into your A-game and makes you prioritise the client. This will feel energetically high vibration, grounded. It will feel like a FAIR EXCHANGE.
THE PISS TAKE PRICE — This is the price at which point you feel weird about asking for the money because it is actually not equal to the services you are offering. You can feel this in your body, it disappears from your heart and goes into your head. You’ll feel it’s too much and they will feel it’s too much. And if they did agree to it, it’s going to cause you so much stress to deliver the work that it’s not worth it!
4. Meet yourself where you are.
Please note — naming a piss take price is not about having low expectations for yourself or not believing you’re worth being paid well.
Your current piss take price will not always feel like a piss take price. My initial piss take price for my ukulele workshops is now the absolute minimum I work for.
Over time the challenge will be to gradually increase all of these prices. But today be compassionate with where you’re at and what feels right. If it feels honest and fair to you, they will feel it’s honest too.
5. Using the model to find a price.
- Find your resentment, feel good and piss take prices. Write them down.
- Set a number just below the piss take price, at the upper end of the feel good price. This is because we tend to underprice things, and it’s good to stretch. It also means that you’ve got lots of room to manouevure if they say no.
- Ask for that price.
- If it’s on the phone, PAUSE. If it’s via email — forget about it and give the client space to come back to you. We often assume silence means a NO, but it can mean so many other things. Keep the faith.
6. You can use these phrases to show value but also be open.
‘I usually charge similar clients x amount.’
‘This price is a guideline, not a dealbreaker.’
‘There is some flexibility, come back to me with what you feel is a fair exchange for you.’
7. ‘But isn’t some money better than none?’
It is tempting to take a job at a resentment price because we need the money, but here’s a warning of what can happen if we choose to do that:
- You won’t prioritise the work and will be underprepared/lacking energy — this is not good for you or the client — you will do a shitty job, they won’t recommend you and you won’t get the results you wanted.
- You will prioritise the work and give far too much to it than you’ve been paid for and then feel totally exhausted.
- You might even deliberately bring your A-Game to prove to the client that you’re worth more, which brings a weird dynamic into a business relationship.
- Or, you will bring the resentment energy into the session — you’ll already feel annoyed with the company before you start — once again, you won’t do your best work and they will feel you don’t really want to be there.
- And here’s a sneaky one… because you’re not getting paid in money energy, you will want to be paid in their appreciation and will need even more feedback and love from the group. This will make you come across as needy and under-confident.
8. Why we shouldn’t take a Piss Take price
- Similarly, I’ve found if I’m paid too much, I’ll want to offset this perceived imbalance by over-delivering and being needy about checking they got the value they wanted.
- Or I won’t be present in the delivery of the service, because I feel I’m being scrutinised for whether the work is worth what they’ve paid.
- Essentially, I’m not relaxed and that means I’m not delivering good quality work.
When you are setting your price, check in with how you would feel doing the work the next day at that price. What is your body telling you?
9. Aiming for a Fair Exchange
Remember: The price has to be high enough for you to feel valued, but not so high that you feel stressed.
It has to be low enough for you to feel comfortable quoting it, but not so low that you resent doing the work.
The aim is for it to feel like a FAIR EXCHANGE for both parties.
You want to turn up for your clients feeling like you are being paid really well for what you’re doing.
Then you’ll prepare, kick ass, bring your A game.
They will recommend you and you’ll get more business.
You’ll feel really happy to be there and they’ll feel it.
And crucially, because you’ve already been fairly compensated, you will not need anything more from them, will have a healthy detachment and therefore have much better results.
Feedback will be a nice-to-have rather an alternative currency.
Positive results will be celebrated, but won’t be defining your self-worth.
Equally bad feedback or negative results will be hard but not devastating. You can be curious rather than resentful or guilty, which may happen when the price has been off.
It always comes back to how it feels. You intuitively know what feels good for you.
10. Some examples of a fair exchange that isn’t money.
Sometimes when the client cannot pay what you want, there might be something else you can ask for.
Professional photos or video footage.
The ability to use their logo on all your brochures/website or a testimonial that will offset a marketing cost.
Introductions to the rest of the company or their wider network — or for example if you make sure that key people in the company will be at the workshop.
The chance to try out a new product/service and get really valuable feedback.
But remember, keep coming back to — does this feel fair?
Just last month a university asked me to be a Guest Lecturer on their Entrepreneurship programme. I gave them my fee and they said that everyone usually did it Pro Bono. I went away and decided that it would still feel good for me to do the workshop, because it was a new topic so it was also a chance to create new content. I negotiated a nominal fee (10% of what I’d originally asked, which they managed to find), the chance to record the workshop and for some significant people to attend the workshop. It was all agreed to and it felt like a really fair, and nourishing exchange.
11. Some stories of getting the price wrong
1. I accepted £100 for a team-day workshop because they were a really cool company and I wanted to get in with them. I felt really annoyed having to do it for so little and therefore didn’t give my best and felt overly reliant on their positive feedback at the end. No further work came from it.
2. I offered to do a workshop for free for a HUGE company in exchange for a testimonial. They then U-turning on me being allowed to say I’d worked with them, the day before the workshop.
3. I once took a small fee because it seemed like a fun worksop but then had so many meetings beforehand that it ended up being MUCH more work than just the workshop.
12. It doesn’t have to be the end of the conversation!
I once quoted a client an insane PISS TAKE PRICE. As I pressed send I knew it was too much. Fundamentally I didn’t believe they’d say yes. They came back immediately saying ‘there is no way we can pay this.’ I felt initially terrible, but I didn’t lose the client, we just agreed on a lower amount.
This taught me two things:
1) if the client wants to work with you, the price won’t be a deal-breaker, they’ll just ask for it to be cheaper
2) trust your gut around piss take prices! And remember you’re always communicating more than the number…
Interested in exploring this more? I’m running a money workshop on Wednesday 17th March 1–2pm GMT. Book here
Or book a 1:1 money coaching session with me at firstname.lastname@example.org