Are you undercharging your clients? Working a lot of extra hours only to get nothing in return?

Price plays a huge part in marketing your products or services. If you charge too low, your clients will not take you too seriously but charge too high and fail to deliver results.. you are going to get some angry customers.

So what exactly is the best fit?

What I found over 2-3 years working in the online marketing industry is that the pricing model of your service is something you cannot neglect because it plays a huge part in how you are perceived in the marketplace.

Pricing at the end of the day is about investment, people do not value the things they have, but they value the things they have invested in. That’s what I have learnt from experience is that free work does not work because your clients won’t value it. It’s much better to charge someone a hefty fee because they will value your service than to undercharge – you are doing your clients a favor.

It’s a two way relationship. Say you are a digital marketing agency and you providing a service of social media marketing. You can create all the best posts in the world, having the most beautiful captions and extravagant design but if your client does not take the work and hit the publish button on their website, your work will not be seen.

In that sense, without your client’s approval (or investment) they will not value your work.

A good rule of thumb is to charge 20% higher than you currently feeling comfortable doing. You are doing this for your customer and not for yourself – because they are going to value your service much more than charging a cheap price.

This is not overcharging, but you are giving people a reasonable deal.

Benefits of Raising Prices

• Happy clients.
• Clients that respect you and your time.
• You get to do your best work.
• Less likely to deal with scope-creep.
• More time to spend with friends and family.
• You feel valued more.
• Pathway to a higher income.
• Frees up valuable time for you to develop other products.
• Gives you energy that you can spend doing the things you love.

What happens if you lower your price too much?

• More likely to encounter the client from hell.
• People don’t value you as they should.
• Your time is perceived by others as not valuable.
• The classic long hours with no pay worker.
• Lower profitability and revenue.
• Making less than you deserve.
• A lot of frustration in general which will lead to built up resentment and not having a good time in general.

Key Takeaways

Stand up for yourself. If you are a professional, you are doing a great job in what you do. Do not neglect the value and time you have as an individual. Turn down clients that do not agree with the value that you have.

One of my first clients, I got her in for $5 – I also worked with $3,000 clients and I can tell you from experience that it takes the same amount of effort to close a $5 client as it takes to close a $3000 client.

However, there’s also a time to lower your price – perhaps during a recession. You have got to find the right balance to not undercharge but also not overcharge. But this is a rare case and more than likely, you are undercharging.

The bottom line with pricing is how you price your products is a reflection of how you view yourself in terms of your service. It has everything to do with your self-confidence and self-esteem. When you are pricing lower than what you are worth, you are having low self-esteem.

It’s okay. We’ve all been there and made this mistake with pricing. However, since that you are reading this article, do not make the same mistake again with pricing. Raise your self-confidence and self-esteem and charge a higher price.

Watch what Dan Pena talks about self-esteem: