Why I Raised My Rates~The Value of Value-Based Pricing

Have you helped people make big changes?

Are you someone people go to for help and inspiration?

Do you make good money for your services?

I used to be someone who charged "by the hour", until I had a track record of big results.  It became really clear to me that I was under-charging, based on the results I helped people get.  Then I changed my pricing to reflect more of my work's true value, which is the RESULT.

I started small, which was good for a beginner.

14 years ago my coaching business started as something I did for anyone and everyone who would work with me.  I was grateful to get clients for $50-$75/session, and I worked long and hard for many years to walk with people and their goals.  I helped people of all walks of life grow their positive mindset, learn to be grateful & generous, and to set and achieve goals.  I helped small business owners grow their income streams, pay off debt, save and invest.  

This was perfectly natural for someone starting out.  I needed experience, and was willing to work.  My classes were very affordable for the average working person($50/month), and were a very small percentage of the results I got for them, 1%-3%, in fact. 

The average client in my classes paid off debt/saved $5000 in 3 months! And the average small business owner in my classes had a $10,000 result in 3 months!

Tracking these results helped me have more confidence, as I realized that FACTS don't lie.  People were becoming wealthy under my guidance.  And I was happy to help them succeed!

While this was good for a while, eventually I outgrew this model.  I personally use a "tithing" model in which I give back 10% of my results to the places that have helped and inspired me to get big results in my life.  Only 1 of these people whom I had helped build wealth gave back to me in any way.  And of course it would be unethical for me to demand that gift.  I was just shocked that none of them were grateful enough for their results to give back.

This "under-valuing" came to a head for me with the following:

*A couple who already had $100,000 in investments upped their net worth by $100,000 working with me and gave me $200.

*A woman wanted to get free coaching and was not willing to pay even a small fee, after she had just bought a brand new car!

*A client making $100,000 year paid off $10,000 in debt within 1 month of working with me, and wanted to pay me less than 0.3% of those results, $27 to be exact.

*An entrepreneur wanted free advice on a regular basis, but was not willing to pay for a class, even though they had invested thousands of dollars in another personal growth project.

What a wake-up call!

And I realized...none of this was anyone else's fault.  It was my own need to value myself and my results more highly!  The "proving myself" period of a decade of coaching & teaching was important for my growth, and for me to see how I could truly help others.  Now it was time for a new phase.

I began to seek out new mentors, people who charged rates based on results.  I calculated the "tithe" amount for the average result I got for people:  10 % of $5000-$10,000 more in the bank in 3 months would equal $500-$1000 in 3 months.  I began to see how I could shift my pricing to reflect more of my true value.

And new clients who valued RESULTS started showing up!  

I enrolled high-level clients in classes & private sessions.  Because I value my time so highly, I now reserve private client work for the highest paid clients.  My programs are chock-full of content and support, but in a group teaching context.

I lost a few people.  And that is fine!  The people who want everything for free, or who undervalue me, are not my ideal client anymore.

My current clients now really value my time and expertise.  They tend to also be more personally motivated, and to be working diligently on the materials I provide.  

I still do some "charity" work as part of my own giving practice.  I recently gave away 10 sessions to local people in need, and that felt great!  I give away plenty of free content in this blog, and in my Wealthypreneurs facebook group, with 100% free information, resources & "Money Monday" video channel.

But I don't give away everything.

If people really want to work with me, they are willing to pay for it.  And my fees are still under 10% of the results they get.  If folks can't afford to pay 10% of what they want to get, then they are not my ideal client.

What kind of results do YOU help people get?

Are your rates high enough?

What could you charge that would work for your clients AND help you feel more valued and respected?

Good luck with value-based pricing, and feel free to comment with any thoughts or questions below!

blessings,
Kathy Kali