How to charge premium rates
If you haven’t already done so, go back and read about basic pricing before diving in here. This is some next-level stuff…
Okay, so you want to charge more than $100 an hour for your time? Good, you probably should. Here’s why:
WHY YOU SHOULD CHARGE PREMIUM RATES
- Your professional and life experiences are priceless! You’ve likely spent years gathering expertise in a particular niche or industry. That knowledge was hard fought and valuable. In my case, many clients are drawn to my first-hand knowledge of how major corporations make branding decisions, or how to succeed as a content creator online. My background experience is unique. It’s valuable.
- A higher price makes you feel more valuable to customers. Notice I said, “feel.” People don’t buy things rationally. They buy with emotion. The perceived value of what you’re offering is much greater when it costs more. In a sea of competitors, if you’re charging more, it sends a signal to the buyer that you’re somehow better.
- Premium price = premium clients. Note: This is not true across the board. I work with many clients pro-bono or at a discounted rate and they are amazing, amazing to work with. But by and large, if you are the cheapest option around, you’re going to attract the bargain shoppers who don’t see your full value and won’t likely be your ideal customer anyway. A lot of businesses who tried using Groupon to attract new customers swear they’ll never do another deal because these bargain shoppers have no brand loyalty, and many are, well, a pain in the ass.
- High paying clients are more likely to succeed. When they have made a significant investment to work with you, they’re more likely to push themselves, find success, and rave about you later. This is exactly why people sign up for expensive gym memberships, right? 😜
HOW TO CHARGE PREMIUM RATES
Just to reiterate: You should be charging premium rates. The only reason you’re not is because you’re afraid and you haven’t convinced yourself that you’re worth it. Here’s a little exercise you can do on your own to get over it.
I want you to list the benefits people will get from working with you. These benefits can be physical, professional, mental, or social.
Graphic Designer: my clients appear more professional, get better leads, attract more email subscribers, grow their social networks, increase their revenue, feel a sense of pride handing their business cards out at networking events, are confident while presenting a slideshow to an investor, and they will make more money.
After listing out these benefits, you’ll start to see what a client is actually buying.
Another way of doing this is to think about the negative — what would it cost my client NOT to hire me? They’d spend another year at a job they hate, have less time with their children, dip into their retirement, and miss out on high paying clients of their own…
To put this into practice, think of a service that you currently provide, or would like to provide. Again, list out the specific benefits someone will get if they buy this from you. This is exactly how you should market your service on your website! Alongside your offer of a 60-minute coaching call, write a detailed description of how your clients will feel afterward, what this session might solve for them, and answer any lingering questions they may have. You can see how I’ve done this for myself, here.
Again, there is not an exact science to this, and you need to understand that at the end of the day, the market will determine your rate. If no one is buying from you, you haven't effectively conveyed your value— and the market is telling you your price is too high.
If you’re curious about my premium rates, go ahead, take a peek. I’m not shy! You may notice that I offer a lot more than hourly sessions and there’s a good reason why. After an initial session, I try to move on-going clients to differentiated packages. Why?
- Hourly rates make you a commodity
- Hourly rates feel more expensive than a package deal
- Trading dollars per hour will limit your earning potential significantly (i.e., keep you poor)
Want to talk about how to price your specific offering or the weird science behind creating packages? Shoot me an email (it’s free, I promise 😉).
Until next time.