Making the whole Pricing Resonance thing work for you.
Remember the art and science of pricing?
Where we talked about the fabulousness that is pricing resonance and also about Mark’s excellent resonant pricing exercise?
So I’ve been doing this stuff with my clients and my Kitchen Table people (and of course with myself) for a while now.
And I really want to talk about some of the crazy-important stuff you want to make sure you keep in mind when you’re trying to figure out what your prices are.
Whether you’re using this concept of pricing resonance or not.*
*You should, though. It rocks.
Things to take into consideration when you come up with your prices.
Thing #1: The invisible time.
When you meet with a client, it’s not just the number of minutes that make up a session.
It’s the prep time. And not just the “reading over your notes” prep time, but the emotional prep time and the energy prep time. And the recovery time.
It’s setting the space, in every way possible.
When you teach a workshop or a course, it’s not just the hours teaching.
It’s curriculum writing and planning and strategizing.
When you create a product (whether it’s an ebook or a business system or an actual tangible thing, there is the big, huge creation process which no one pays you for. You want to build some of that in too.
Plus when you do in-person work, it’s the getting there. Not to mention the returning and the emotional recovery.
A lot of invisible time in there. But there’s actually more invisible time.
Thing #2: The really invisible time.
Otherwise known as Administrative Crap.
(Unless you’re my beloved Cairene who has sweeter, more love-centric words for this process.)
But either way, there is a lot of it. And more than you can necessarily prepare for.
Types of admin stuff that takes time (and money):
- figuring out what the product/service entails, plus all the details of how people will get it
- endless email questions
- credit card processing
- shopping cart costs
- customer support craziness
- returns and cancellations
Someone is going to be doing this stuff, whether it’s you or an assistant. Assume that someone is going to need to get paid for this, even if it’s just you.
Also, keep in mind that over-estimating is not a bad thing.
You might remember that with the three-day workshop I taught in North Carolina last month, for example, I’d estimated admin costs to be 5-7% and allowed for that.
They ended up being a startling 17% of the total intake. Uh huh.
Since I hadn’t built that into my mental assessment of what I would be paying to make this workshop happen, it wasn’t part of my headspace when I went into pricing resonance.*
* Obviously, I couldn’t have known that this particular project would be so complicated, but it gives me information for next time.
Thing #3: The invisible past time.
That hour of service you’re giving isn’t just that hour.
It’s everything that has come together in your life to make you the person you are.
It’s all of your acquired wisdom. All of your experience. All of your insight. All of the abilities and qualities you’ve been developing in a lifetime of being you.
That’s your schooling. Your education.
And just as doctors (in the United States, at least) charge what they do in part because they’re paying off ten years of student loans … you want to at least symbolically acknowledge the complicated, time-consuming path of learning and growing you took to get to where you are.
Because you invested in yourself in big ways to get here.
And you’re still investing in that biggification process with everything you do.
Thing #4: The invisible expenses stuff.
When I did the pricing resonance exercise for my workshops this year, I didn’t have enough information about how much the whole thing would truly cost to set up.
Not the obvious “we need to pay for the space and a plane ticket” bits but other stuff.
So I got resonance on the price, but the number wasn’t enough to actually adequately cover expenses.
Again, you won’t always be able to make an accurate assessment of how much you’re investing to make a thing available to the world. And that’s okay.
Especially not the first time you do a thing.
Flashback to three years ago: Oh! Ebooks need covers! To be designed! By people who can design stuff! Otherwise known as designers. And let’s not mention the formatting. Ohmygod. The formatting.
Normal. But it might help to have in mind the concept of “yeah, we need to build in some extra cushioning here” when you get ready to play around with prices.
That way, before you go into the resonance exercise (you can get Mark’s PDF here if you haven’t already), you have information about what the true minimum is.
The really important bits!
- Know your resentment number (kiss to Mikelann Valterra for this excellent concept).
- Remember that systems are fluid. They change. All this stuff you’re learning is more information to help figure out how to make them work better.
- Ninjas! You need some. An assistant (even for just a couple hours a month) is a Very Useful Thing. Also, people who believe in you. Also, people to remind you to stop working. And who provide you with a safe, comfortable place to hide and cry whenever you need it.
And … the actual point of this whole thing.
Pricing doesn’t happen in a vacuum.
And neither does pricing resonance. It isn’t magic. It doesn’t come out of nowhere. It emerges from ingredients that are already in your head and heart.
So you want to be holding all this information about your project in your heart (administrative weirdnesses and all) when you tune in to find out what the right prices are. It’s a process.
That’s the good part and the challenging part, I guess. 🙂
Comment zen for today.
All this pricing stuff can be super trigger-ey, I know. So I apologize in advance if something I’ve said or the way I’ve said it has stepped on your stuff.
And I’ll add to that:
We’ve all got our stuff. We’re all working on our stuff. We try to respond to each other with as much kind-hearted understanding as we can stand. Mensch-like: it’s how we roll. Lou Reed lyrics are always welcome. That’s it. I’ll be quiet now. Comment away!
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Pricing, like most things in a business, is an expression of the relationship between you, your work, and the people who can benefit from what you offer. Resonant pricing honors all three.
It acknowledges your skill, knowledge and experience; values the quality of your work and everything that goes into bringing it to the world; and it offers your clients and customers the opportunity to give as well as to receive from you. There’s a symmetry and balance to it that brings these three elements into right relationship with each other.
Thanks so much for this thorough and thoughtful analysis.
Love, Hiro
.-= Hiro Boga´s last blog ..The Magical Monsoon: a love story in a minor key =-.
“Resentment number” – I love it. I’d got 90% of the way to this concept myself, but having someone else put it into words = magic.
All of this pricing stuff is definitely trigger-y, but the way you approach and explain it is actually way calming and totally opposite-of-trigger-happy. Can’t wait to check out the resentment number post, because whew, key consideration. And Molly Gordon’s ezine this week was full of pricing help, too ~ between all of your heart-centric approaches I am definitely getting some peace, so thank you for that.
.-= Briana´s last blog ..The Laughable Lizard of Oz =-.
I love that you called it Admin Crap because that’s exactly how I think of it. Cairene can help me do it more efficiently but at the end of the day it is the crap I have to do to make the stuff I love to do work better. (which, when you think about it, makes “crap” exactly the right metaphor)
This explanation of the different kinds of invisible time embodied in each and every product and service is really helpful. Because each one IS different. And we do need to have that stuff in our heads to impact on the whole resonance thing.
“resentment number” is also excellent.
.-= JoVE´s last blog ..You always have time for yoga, mama =-.
Thank you for posting such great advice. I am SO referring my students to your site so they can soak up your wisdom this semester when we tackle the whole crazy topic of pricing.
.-= Tea Silvestre´s last blog ..Online Dating for Your Business (Or how to ‘hook up’ with your ideal customer) =-.
Ah, this is perfect timing because I’m doing some resonant pricing exercises tomorrow. Thank you for reminding me about all the invisible stuff. I will be sure to factor that in.
@Hiro – as always, you get right to the *essence* of everything and sum it up so perfectly! You model so many things for me, I am always in awe.
@Briana – yay. I’m happy you’re finding all these resources when you need them. It totally *is* trigger-ful, for all of us (or at least for everyone I know). And the people I know who do best with this stuff have done a TON of work getting there, too.
Hugs all around.
Your post was triggery but in the best possible way; it made me view my work with more value. Like, hey, I don’t have to think of pricing from the point of view of what I think other people can afford or would choose to spend which is really just tied irrevocably to my own relationship with money. I.e., not a good way to go about pricing.
So, thanks!
.-= claire´s last blog ..Homemade Rock Star =-.
Love this, Havi.
I’ve been raising my rates a lot this year, sometimes to the point of discomfort, and it’s a good thing as I often tend to underestimate the invisible time and underestimate the invisible costs.
My historical inclination was to bend over backwards to make things affordable, but I have begun to question if that really serves. For one, I tend to get overworked, overbooked and cranky. For two, I do see that there are times that clients benefit from making a bigger investment in the process.
.-= Isabel Parlett´s last blog ..Our 7-Day Countdown Contest: Win a Copy of our Vibrant Language Expanded Home Study Program =-.
Oh, Lordy! This does get into triggery areas, dear friend. I notice that even after 25 years of self employment, I can get triggered when someone appears to resent my prices. I say “appears,” because I’ve come to see that it’s not me or my price that is resented, it’s the dear person’s own stuff.
And yet, it can bruise our hearts when people don’t seem to approve of our prices. Or when we second-guess ourselves, thinking, “If I’d charged more/less I’d be earning more/less and people would love me more/less.”
Ouch!
One wonderful thing about pricing resonance is that, even when I discover something cost me more than I’d expected, pricing from resonance has unarguable integrity. That feels good, like being home.
Love, love, love,
Molly
.-= Molly Gordon´s last blog ..Labor Day Tweet A Thon =-.
Super valuable wisdom here.
I hadn’t really thought about the fact that Resonant Pricing comes from all the information we bring into the exercise. And if we don’t have that info, our resonant price may not match up with the true cost of an offering.
It really highlights the importance of gathering as much information as possible before determining the resonant price.
Makes perfect sense, but I think subconsciously I was treating resonant pricing as insurance – as though it could make up for a lack of information, to some degree.
Thanks for sharing this with us!
.-= Victoria Brouhard´s last blog ..The No-Brainer Scenario =-.
Hmmm…I’m noticing that “what a going fair rate in the market” is not included in your 4 things. I find this problematic, as it has a tendency to lead to radically overpriced services–especially within coaching and consulting (ask any conventional businessperson what they think about consultants and their rates!). Also not included in your list is “what can my target market reasonably pay and be happy with?”
Business is a relationship between seller and buyer. Don’t you think taking into account the buyer is an important element of good business? Business also does not happen in a vacuum, but in a marketplace where others are selling similar products and services.
By charging as much as we can get away with, we set up a bubble economy that will eventually come crashing down. Those that refuse to adjust prices when this takes place will generally lose business and get bad PR…or at least that’s what I’ve seen play out in the market.
.-= Duff´s last blog ..How Do I Stay Motivated? The Heuristics of Solving Life’s Little Problems =-.
I read your pricing article a few days ago and it prompted me to redo my price structure. I know how much admin costs generally take in terms of time and money. I divide the costs of admin stuff across the year average to get monthly costs which I then translate in to a a “per item” base case to which I add my hourly rate for time.
Only problem was- I hadn’t upped my rate for time since pretty much the beginning. My costs were and are on the upper end of the spectrum for what I sell, but my product is also very much a niche product (using a very time intensive natural dye process that takes much more time and costs more for dyes and water than conventional chemical dyes), and people tend to underprice in the market because they are “hobbiests”.
So I raised my prices. I am still going “Oh my god that is a lot of money for yarn”. But really, it isn’t a lot for what you are getting for it, so I am trying not to feel guilty about it.
In response to Duff- I am not charging the most I could get for it, despite being at the upper end of the price spectrum. People DO sell for more but that is limiting after a certain price (the number of pieces you can list for sale is limited to, people don’t like it if you list 2 many for high prices it seems). I am not charging the price just because I can, but because I have that additional experience in my niche and the time it take for the products to be made etc.
Oy, pricing. Thanks so much for writing about this stuff so kindly and clearly. It’s so needed!
I’m developing a new product and have been back and forth on the price so many times. And the big problem, really, is that I *live* in the UK, but I *trade* on the internet – and we all know that ‘on the internet’ in large part means ‘in America’, simply because the US makes up such a huge proportion of the online English speaking world.
So, I have a price which is resonant for me and for my English customers (who have all said so far, ‘Wow, what a bargain!’). But most of my customers are in the US, and my feeling/worry is that this price may be too high for *them*.
So what to do? Lower the price so I can help my US right people as well? Or stick to my price and possibly have to restrict myself to the UK?
I guess I have to stick with my price, no? Because fundamentally I have to make a living. So I’ll just have to try not to get too upset about the people who can’t afford it.
Or, perhaps, create a two or three-part payment scheme.
Gah.
.-= Kate´s last blog ..Working with Change =-.
So, I’ve just been in the park doing the pricing resonance thing (if you’re going to do self-work, might as well do it in the sun, overlooking the sea, right?). I feel a lot better. The price really does feel right. So now I just get to practice accepting that you can’t please everyone!
.-= Kate´s last blog ..Working with Change =-.
I don’t understand how you can go to another continent and still figure out what’s in my head at any given time.
You’re a mind-stalker.
I totally needed this right now. I’m creating a workshop and lost sleep last night worrying over what to charge. Now I have something to work from.
Thanks for a little clarity this morning.
.-= Sparky Firepants´s last undefined ..If you register your site for free at =-.
Havi,
I have to admit that when I signed up for the NC retreat, I had mixed feelings as a buyer– I’m financially strapped, so it seemed “expensive” but I knew that regardless, it was an probably incredible deal that I could not pass up. (It was.)
If I could add any kind of intangible payment of thanks, by telling you how much I learned, and how grateful I am that you mis-priced your retreat, I extend a wheelbarrow full of thanks and appreciation. 🙂
Ingrid
Yeah! That resentment number is a good way of putting it. I’d realized that I was below that point with my unframed pieces and then with my multiple portrait pieces a little while back.
#3 is the hard one. At this point I figure that that cost comes back to me in the perception of me as an artist and what that does for my marketing. I’ve focussed more on what feels right, beyond factoring in supplies and time (all time specifically devoted to the commission before and after).
Great post!
Peace,
@vinylart
.-= Daniel Edlen´s last blog ..About Me =-.
Thanks for the kiss, Havi! And thanks for writing so clearly about this difficult subject. Setting prices can feel more like “art” than science”…. and of course it all feels so personal. I do think my “resentment number” concept helps us, because so often I meet women who resent the amount of money they make relative to how much time and energy they put in.
Yes, there are several ingredients that go into pricing. And of course we do want to take into account what the market will bear. But I find that women more than men err on still setting their prices too low. Often this is (I believe) because we feel we just aren’t perfect enough yet to merit charging more. So I say “good enough”! Are we good enough to charge more money? A lot of this is about convincing ourselves we deserve more….
.-= Mikelann´s last blog ..A Tale of Buying the Perfect Curtains—and the pain and pleasure of shopping =-.