unrestricted the book by tammy guest

Welcome to part three of this Money Mindset series. In part one, we talked about making sure you are legally set up to make money, and in part two, we covered the really important issue of how to bust money blocks that are holding you back. Now that both of those foundations are in place, we can get into a topic many people struggle with – pricing.

I saved the pricing segment for last because if you want to play full out, it’s critical to move through each of the stories in your head, forgive yourself, and let go of them. Doing that shift first will make pricing so much easier. 

So, let’s dive in, shall we?

3 Ways To Set Your Pricing As A Practitioner

There are different ways to set your pricing – conventionally or unconventionally – but they all have to do with your head, your heart, and your gut.

I want you to start by thinking of pricing like this:

Setting your prices and taking money is how money flows through your business like a river or a stream. You enable the river and the stream of clients to come your way.

Where the clients cross the money path is where you are able to make a profit and grow your business so you can create that flight plan life I’ve mentioned before.

Method 1: Set Prices With Your Head

Setting prices with your head starts with facts.

How much does it actually cost to stay open?

Now, this is a relatively simple formula but until somebody told me about it, I didn’t have the aha moment. This might be the same for you so the formula goes a little something like this.

Step 1: Write down all monthly costs

First, I want you to write down all of the costs you pay for each month.

What are your monthly outgoings? How much does it actually cost you to stay open for a month?

There are differences between where your money goes in an online model vs. an offline model. But either way, there are certain costs you pay each month to run your business.

It’s very easy with our frames and the way that we look at things to think the money going out for our online is kind of just play money. Because it just disappears online.

But in actuality, you’re paying on a monthly basis for things like:

  • booking systems
  • client management systems
  • advertising and marketing
  • website hosting or platform subscription
  • graphic design work
  • accounting systems
  • social media
  • team members (such as a virtual assistant)

All of those things add up.

And don’t forget the hard costs of actually having a home-based business, such as things like electricity and internet services.

No matter which model you have (online or offline), you also need to consider your insurances, associations, and any other fees you pay to make sure you are legally allowed to operate.

Step 2: Figure out how many hours you work each month

Once you have the dollars worked out, figure out how many hours you actually work each month. That includes ALL the hours you put towards:

  • face to face with clients
  • working on courses or membership
  • running events
  • networking and marketing

And any other time you spend working on your business. You need to include everything you do for your business – not just client work.

Step 3: Divide outgoing costs by number of hours you work

Once you have those numbers written down, it’s as simple as dividing the outgoings by the number of hours you actually work.

That gives you the amount per hour it costs you to stay open.

Now, the first time I explored this, I was shocked to discover how much my brick and mortar business cost to stay open per hour.  To actually, physically open the doors and let people in – whether they were there or not – to actually open the doors cost me well over a hundred dollars per hour.

And I was NOT making that same amount of money.

So the goal here is to make sure you take into account what it actually costs for you to stay open and remove the story out of it. Just stick with the facts.

Once you have that hard data in front of you, you can make a fact-based decision on what your price needs to be to cover all your expenses and still earn you a profit.

Alternate Method to Set Prices With Your Head

Another way to set your prices with your head is the old-school method of comparison. Go and compare prices from all the practitioners based in your local area and then pick a number.

Now, again – I want to stress the reason we talked about money stories before talking about pricing, is because anytime someone sets a price, there is going to be a money story behind it. 

So the risk of the comparison method is that you are taking on someone else’s money story.

It’s not a bad idea to have that comparison information, but always remember that there are 3 ways to think about pricing, not just one.

So, stick with the facts, to begin with, but remember there’s a bit more to it.

Run Experiments to Check Pricing Based On Logic

Setting prices with your head also includes logic. Logic doesn’t come with the emotion attached to it – it’s just how much value are you creating in a certain time frame vs how much value you will receive. It’s just value to value.

That can get a little funny when you talk about things like helping someone finally have the family they’ve always craved. Being in a situation where you have created enough health in that body that it becomes pregnant is value that can’t possibly be measured.

And that makes the logic a little fuzzy when you’re trying to set a price with your head. So if setting up a price solely using your head resonated with you, you need to first run an experiment.

When I first started out in practice and wanted to create an eCourse because I noticed that I could make money while I wasn’t even there. So, I ran an experiment.

Here’s what I did. I:

  • saw how much it cost me to host an eCourse
  • figured out how much it would cost to create it
  • compared it with similar other practitioners running eCourses online
  • thought about how much value someone would get from my course
  • did some work on my money blocks
  • set my price

And I sold three eCourses.

Now, three eCourse sales at the time might sound great. But I had put ten thousand dollars into creating that eCourse, so it didn’t quite have the result I was hoping for. I had to go back and look at my money blocks, stories, and a whole bunch of other things again.

Then, having a background as a scientist and continuing to use my head, I ran the experiment again.

The second time, I only changed two parameters – I changed the price and the copy (the wording on the sales page), and I ran the experiment again.  Then I checked the results, pivoted and shifted, and did the same thing again.

So, if you want to set your pricing using your head, my suggestion is to run an experiment. Have a hypothesis, see what happens, and then pivot afterwards.

Method 2: Set Prices With Your Heart

A lot of us practitioners have very high empathy in our strengths. With empathy, we have a way of sensing ourselves and others through feeling. That is what setting prices with your heart is about.

When I set up pricing for my first, initial consultations, I used my heart.

I knew I needed to raise my prices up because I was getting busier, and my rent went up, as well. So I started to feel into what my price should be.

But my science head kicked in, so instead, I thought about the amount of money I needed and set a price using my head. I ran an experiment and nothing happened. Nobody booked.

That made me think, hmm – there’s something missing there. Apart from the money block stuff, there’s heart missing.

I know, this doesn’t sound very scientific. But it is a feeling way of setting your prices.

Let’s go back to my eCourse experiment. So my logical eCourse pricing experiment didn’t work very well, so I tried looking at it from a heart-centred viewpoint. It went something like this:

“Well, my eCourse didn’t sell for the $297 that I priced it at. I sold three of them.”  I didn’t feel confident asking for that amount of money, I felt a little bit of a niggle. That price made me feel a bit cold. Setting my price that way felt quite clinical and the $297 came from trying to understand marketing (and a bunch of other things).

It didn’t come from a feeling about the value I would create for my client through the course.

Step 1: Pick a Number and Feel It

If setting your prices this way sounds interesting to you, give a little experiment feel into it and pick a number. 

So, if I was to pick a number, I could say – $500.  What you want to do is pick a number that is relatively high or relatively low. Then you feel that number. And you might think that’s a bit high or way too low.

Then you pick a number that is much lower or higher (whichever one you’re feeling). What if it $150? Feel it – does it feel contractive or expansive?  Then go higher (or lower) again. What about $297?

When I did this for my eCourse, I got to $297 again and I thought, “No, that’s not quite it either.” But then there was a shift in the feeling and I started to realise that if I set it at the $200 mark, it was much easier.

$200 felt like a no-brainer, like flow for me. I didn’t feel like I was ripping anyone off. There was a sense of feeling in there.

Once I felt that I was like, “Okay, we’ll go with $199. That’s it.” I committed to that price and I sold two and a half times a many on that round.

Head or Heart?

So, when you’re considering what to set your prices at – it could be your head, it could be your heart, and it can definitely be a combination of both. Because this feeling aspect also goes along with the neural pathways that I’ve talked about.

It’s important to go with the flow of your feelings and do the work on those stories so that you can confidently ask for what you’re actually worth.

Method 3: Set Prices With Your Gut

This is the method that I recommend for most practitioners. Using your gut to set prices is a perfect merge of your head and your heart together.

Use a combination of all the steps described above, taking into considering how you feel plus what’s logically going to recoup your costs. This method meets not only your needs but also your clients’ needs.

For this method, it’s really important to tap into your ideal client while ignoring any assumptions you might want to make about them not being able to afford it or that they won’t pay for it (as discussed in money blocks).

You must let those stories go and follow the fact that you don’t know what they will or won’t pay.

Focus on your ideal client’s world – what will they consider valuable?

And then, you have to ask confidently, once you have balanced your head and your heart.

FAQs About Pricing

Here are my answers to a couple of questions I’ve received many times around pricing for practitioners.

Q. Should I lower my prices when I take my practice online?

A. If you are thinking this, my first response is that you absolutely need to do some work on your money stories. Because the inherent value you provide to your clients doesn’t change at all when you change how you deliver them. You still have the same value, the same knowledge, the same abundance of information that can change your clients’ lives in incalculable ways.

Do some work around your inherent value. Discover what stories come up around that for you and work through them. What does it feel like for you when you ask for those prices?  And are you logically taking into account all of the costs it took for you to set up online?

Q. How do I address clients who have paid a higher price for my services if I choose to reduce them?

A. The key here is to focus on the facts and let go of any stories you might have around this.

Stick to the facts they need to know. As an example, perhaps you changed your prices due to:

  • the current health crisis
  • decreasing costs associated with your practice
  • some other reason

For whatever reason, you’ve been able to give your clients the benefit of something at a reduced price.

But again – I’d love to stress that it cost you a certain amount of time, energy, and money just to actually acquire the knowledge you have. And that knowledge you have is valuable for them. That hasn’t changed a bit. And the value that comes from you sharing that knowledge hasn’t changed for them either.

So explore your decision to lower your prices. Are you putting your own money stories about value or cost on your clients? Check in with whether what you deliver to them is still as valuable as what you delivered before. Maybe it’s even more valuable now, because there may be benefits that weren’t there before (timeliness, availability, etc.).

Take Action

If you are struggling with pricing your services, eCourses, or other offerings, work through these steps. Go with whichever method feels right for you, whether it’s using your head, your heart, or (for most) both!

And watch for places you may be letting your own money stories influence you. When you realise one has cropped up – write it down and work through it. The more work you do on this, the better you will get at pricing in a way that is right for you and your business.