Price telegraphs to the world your status as a coach or consultant. It can raise your status, and it can hurt your status.
And just as price is an indicator of your status in the market, it’s also an indicator of your customers’ status. The price someone is willing to pay says something about them.
If you’re priced at a premium, you’ll attract people who are willing to pay a premium for what they want. Of course, the opposite is also true: if you’re priced very low, you won’t just attract the price buyers: you’ll actually repel the premium buyers.
So by setting a price—whether it’s high or low— you telegraph to the world who you choose NOT to do business with as much as who you choose to do business with.
A CEO friend once told me that you can choose to do business with “victors” or “victims,” and that his company made a conscious choice to work with the victors…and repel the victims. While price isn’t the only criteria in defining victors and victims, it’s one of the most important.
The Worst Customers in the World
The absolute worst customers to work with are those who choose to buy based solely on price. Price shoppers are the whiners. They want you to do stuff for them for free. And they have zero loyalty: price buyers continue to shop around even after starting work with you. They are also less likely to comply with your advice, and may even openly doubt you as an expert.
Yet in most markets, for 60% of the buyers, price isn’t even one of the top 10 criteria for making a buying decision. So if you have a choice, why not price yourself at a premium?
The Best Customers in the World
The absolute best customers–especially in the world of coaching–are those for whom your price is a stretch. Those are the people who will be more likely to comply with your teachings and more committed to achieving success. And that alone makes it more likely that they’ll get there.
We have customers who sell business consulting services on the back-end of some of their programs costing $20,000, $50,000, and even $100,000. And the success stories of people who go through those programs are stunning, helping people grow their businesses and covering the cost of their investment many times over.
Price as Part of Your Offer
Before this turns into one of those “guilt you into raising your prices” articles, there are practical limits to what people will pay, and generally accepted guidelines for what specific services should cost.
The super high-end programs just referenced are the result of diligent, consciously-structured sales funnels that move people up the chain from first purchase to higher and higher priced services. At each rung, there are correspondingly higher levels of commitment on the part of both the customer/client and the service provider. The metaphor of initial dating to marriage matches the process well.
Ironically, the first step towards a $20,000 or higher relationship is very often a free one, and in our world, that usually means a free teleseminar. But it’s very clear that what is offered is merely a “Free Preview” of a deeper, more intensive coaching mastermind group or multi-module program.
Figuring out what to offer at the end of that teleseminar and how to deliver the pitch is one of the most challenging marketing questions coaches face. I once heard Instant Teleseminar customer Lisa Sasevich say that “your offer equals your life.” In other words, what you offer at the end of your preview call will define your life for the next 60 to 90 days, or maybe even a year—because you have to deliver on whatever it is that you promise.
That’s why getting that offer and price right is crucial, and it’s not just the money, either. The money requirement is just a surface-level indicator of commitment. There’s also a price to be paid in terms of time, energy, and effort. Which is why it makes sense to hire your own coaches to help you get this right. Because we, too, can decide if we will be “victims” or “victors.”