Deep breath. Ready? Let’s talk premium pricing and how you’re likely making a huge mistake if you’re charging what you’re worth but have been in business for a year or less.
Please don’t misunderstand, I think you have the ability to change lives and you can’t put a price on that. If you’re a smart business owner, you’ve most likely spent precious time and valuable money to become trained in your craft. It stands to reason that you should be able to charge premium prices even when you’re new.
But with all due respect, you’re wrong. Are there examples of brand new businesses charging and making six figures? Yes, but they are the exception and the odds are against you if you chose to build a business that way.
Why You Shouldn’t Charge Premium Prices
The fastest way to grow any business is to start with a small offer that is most likely priced much lower than you desire. Jenny Shih calls this a “Bite Size Offer”and Marie Forleo calls it a “Beta Test Offer”. You can call it whatever you want, but this is something you need to pay attention to because it will allow you to sky rocket to the top of your industry and charge premium prices much faster.
What’s The Big Deal?
No matter how good you are at your craft, you need to get experience delivering your product or offer. It allows you to see where there are opportunities to make your offer stronger and still create raving fans.
When I first started out, I was charging $2000 a month for coaching. And I struggled. My wonderful friend Jenny Shih gave it to me straight:
In your first year, you’re getting paid in both money and experience. At that stage, the best advertising you can have is word of mouth.
Creating a Bite Size Offer allows you to:
- Sell to more clients who might not know who you are yet
- Complete your time with them sooner so they’re free to tell everyone about your amazing skills
- Eliminate fear over what results to promise (and what to do if something goes wrong!)
- Go above and beyond to ensure your clients get the royal treatment
When Jenny Shih told me to create a smaller offer that was only a month long and charge $197 for it, I was skeptical but I did it anyway. Looking back, it was one of the best things I could have ever done for my business.
It’s also one of the reasons my clients get the best results in business. I teach them what Jenny Shih asked me to do that day in January 2012: Start small, start cheap, and gain experience and testimonials. And then watch your business become the next big thing with customers happy to pay you any price for your amazing product or service. [TWEET THAT]
Your Authentic Selling Challenge for this week is to ask yourself: Are you trying to grow too quickly and charging too much before people really know who you are? If you answered “yes”, it’s ok, just adjust course and take control of your business.
What’s your experience with Bite Sized Offers? Did they help your business grow quickly? Tell us your opinion in the comments below.