How to figure out what to charge, a cautionary tale

I told the following story to a new coach recently. And then I thought I would share it with you. I considered turning it into 5 steps to pricing effectively or something else equally boring and instructional.  Instead I decided to just tell you a story.

Pricing is so weird.

It freaks almost everyone out. I’ve been in business for 15 years, mostly providing services. There was some Multi-Level stuff tossed in there too. When I did massage and yoga I just charged what almost everyone else charged and raised my rates every few years. When I did business and marketing writing, I guessed every single time. That was a ridiculous business anyway because I was completely out of my element. I had no entrepreneurial skills and little to no business writing skills. I could write dysfunctional short stories, but no one was buying those.

Then when I became a coach I priced according to hope, prayer and some magic. Which didn’t really work. And so I cruised around, charging between 0 and $225/hour. Here’s the sordid tale of how it all went down, full of embarrassing mistakes and all.

Once upon a time…

I spent a weekend with 100 or so coaches in training and Martha Beck, our magical and brilliant leader. This was about halfway through my 8 month coach training. Martha and her master coaches levitated people on the stage, bent spoons and saw into the future using the power of Love and arm strength.

“The arm thing” is a way to muscle test different ideas. You hold your arm out in front of you and have someone else test your ability to hold it up. When you land on something True, your arm strength is very solid. If it’s too low or too high, you’ll be weaker. My good friend and I took a walk, coached each other, planned our future and did “the arm thing,” to determine our price points. My arm said that I should charge $225/session.

Our hopeful heroine put her magical plan into action

So I went home and rolled that price out to my massage and yoga email list. Those people had been paying me $65/hour and I offered a $65/hour coaching session through the end of the year (about 5 weeks after the email went out), at which time I would raise my rates to $225. I prayed and poured so much Love into that letter.

And everyone said WTF! And Good luck!!

I hadn’t done anything to prepare my list or educate them about what they’d be getting for $225/hour. I was unprepared and so were they. Not 1 person bought. I received lots of well wishes, some puzzled “what is life coaching, exactly?” and several congratulations on a very well written letter.

Back to life. Back to reality…

Meanwhile, I charged $20 to a few people who couldn’t afford more. That amount felt like enough to sting a little bit but not be prohibitive. I also continued to charge $65 to people I knew or who had been referred by people I knew. I told them that I charged $225 for strangers but that because we knew each other, I was giving them the $65 rate. $65 was easy for me to charge because I’d been very comfortably charging that for massage and private yoga sessions.

I couldn’t get behind the $225 rate. I felt incredibly uncomfortable whenever I talked about it. I didn’t understand it either, since my arm had so eagerly landed on $225. I still don’t understand what that was about, but maybe I’ll find myself at $225 at some point and that will be a magical price–when I’m ready. When my clients are ready. When the stars all align and so forth.

This is where your crystal laden hoo-ha comes in

I dropped my rate to $100, which felt easy. I didn’t go down until I felt very confident. It was very important to me not to jump around too much, so I stayed there until I was fully ready to change. Because I’ve been in flakey industries for so long, I make a very conscious effort to do what I say I’ll do and not blow sunshine up anyone’s crystal laden hoo-ha. Although I am in favor of crystals and if your hoo-ha is laden with them, even better.

Then that felt too low and not professional enough so I raised it to $175, but not until I felt like I could talk about it proudly without any weird energy at all. When I raised it I got more clients and I did a better job as a coach.

Pricing 101: charge less than you’re worth.

Make sure you’re worth a lot more than you’re charging and then the decision to work with you is ridiculously easy. I don’t mean charge only a little because you’re freaked out. I just mean way overdeliver. And make sure you’re well worth what you’re asking for.

When my clients tell me they don’t feel like they’re worth what they’re charging, I believe them. I don’t tiptoe around and try to help them feel better about what they’re charging. I ask them why they’re worth it and tell them they better be worth it or else they’ll feel gross asking for it. Then we look at what they’re doing to earn their fee. This is good stuff, people.

This brings up 8,257 issues of worth.

And what is worth, anyway. And who decides. Childhood. Legacies. Old, old, old stories. Have I mentioned I freaking love entrepreneurship because it will take you straight to your Stuff?

Charge whatever feels very fair.

Don’t beat yourself up for charging $40. Or $5. Or $300. Don’t. Most people aren’t coaching very much at all, for $40 or $10 or anything. They’re not. I talk to a lot of coaches and most aren’t making money.

Do not base the state of your business on what other people are doing. Or what they say they’re doing on their website.

Look at my above example. I am sure that when my classmates saw $225 on my website, it really freaked them out. They didn’t know that I was actually charging $20 and $65 and no one, to this day, has ever paid me $225 for a lone coaching session. I was just doing my best to find my way and I wasn’t being devious. I wasn’t trying to pretend that I was earning $225. I wanted someone to pay it, but it wasn’t happening. So, seriously. Don’t believe what you see on the internet.

This bears repeating: Don’t believe what you see on the internet.


Now you. What’s 1 thing you would have done differently regarding pricing in the early days of your business? I’d love to hear it in the comments.



11 Responses to How to figure out what to charge, a cautionary tale

  1. rebecca @ altared spaces August 12, 2012 at 1:48 pm #

    Thanks for telling this story. I’ve wondered about publishing my rate. Although the bulk of my clients do pay that rate, some do not. We work out trades or, I have a few clients who simply cannot “afford” the rate so I cut them a deal. I ask myself if this is a good thing or not. Your piece helps me to reaffirm that there are not certain answers. Your transparency is super helpful.

  2. Katana August 12, 2012 at 3:36 pm #

    Great post – I charge $25 an hour for websites and usually only get $15 – so about 600 for a website like mine. I want to get more into distance reiki and creativity coaching and mural painting- I do get what I am worth for murals but need more courage to let my market know I’m there. I would love to fly anywhere in the US to paint murals- that’s the dream. I would even do it at cost – 1000 for a trip with my husband and 500 for paint to paint on a huge surface?? Yes please!!

  3. Suzanna August 13, 2012 at 12:58 pm #

    Dammit, Sarah, is there a secret well that lies beneath some remote patch of prairie where you go to drink up writing brilliance?! Cuz I want the GPS coordinates!! lol. Once again, you have written brilliantly — which, to my definition, is at the intersection of beautiful + useful. My crystal-laden hoo-ha and I think this is a really, really, really good post. 🙂

  4. Mara August 13, 2012 at 2:27 pm #

    I freaking love this post so very, very much. As someone who mumbles my prices despite knowing that my work is worth far far more than what I charge – thank you. And, yes, entrepreneurship sure does take you DIRECTLY to everything that you’ve been avoiding, thought you’d resolved, or wish you never had to see again. It’s delicious. And terrifying. Grateful to have you in my orbit.

  5. Victoria August 13, 2012 at 5:08 pm #

    Good stuff as always Sarah. I was recently teaching for a high profile online wealth coach and I realized that the price I was charging for yoga sessions was not covering my mileage costs so I asked her if we could increase the price by £5 per session. And guess what? She has now stopped working with me. The reason I upped the price was because her online lectures state to charge what you’re worth and this wasn’t even anywhere near that! But I’d rather do without the money than the hassle of driving to teach someone who didn’t even appreciate me anyway!

  6. Terry DeMeo August 13, 2012 at 7:57 pm #

    Love the combination of your raw honesty and great sense of humor. “Don’t believe everything you see on the internet.” So true, so true!

  7. Kate O'Neill August 13, 2012 at 8:05 pm #

    Love this post, Sarah. Pricing has been on my mind and this was both timely and helpful. Thanks for bringing in another perspective!

  8. Pedro F. Báez August 13, 2012 at 8:28 pm #

    Sarah, you call it sh*t when you see it, and you shoot straight from the hip. That’s what I like about you. That’s what I admire about you. Been there; done that with the pricing yo-yo. Your post resonated very authentically close to my own reality until just a few months ago. Keep on calling sh*t for what it is when you see it. I’m eternally grateful for the boldness and freshness your honesty and frontal approach brings to coaching and living in general. I don’t get much in touch with you, but I do read many of your articles and find your resourcefulness, ballsiness and creativity very, very reassuring and inspiring.

  9. Laurie Foley August 13, 2012 at 10:38 pm #

    As a good friend of mine says, just because they say they’re charging it, it doesn’t mean they are getting it.

    I just talked to someone last week who had a very high rate posted. I commented on it and he said, and I quote, “Oh no, no one pays me that. That’s my ‘I don’t want anymore 1:1 clients’ rate.”

    You speak the truth: don’t believe what you see on the internet.

  10. Andrea Ballard August 17, 2012 at 9:35 pm #

    Sarah thanks for your honesty! We were just talking about pricing in my Mastermind group today. So funny…the things I love, I would do for free, the things I don’t love, I charge a lot for! So if you look at my site it may appear that I value more highly what I actually don’t want! Have to think on this…thanks for the food for thought.

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