How I Doubled My Client’s Rates During a Global Pandemic
We live in a time where people are made to feel guilty for having or wanting money. The thing is, when you don’t have money it can consume you. You always feel the pressure to work harder, work more hours, not take time off. You’re aware that you can’t afford things. I’m not talking about striving to have 1% wealth, or be consumed by the quest to have more more more. There’s a middle ground, where we can strive to earn enough money to make a difference not only in our lives, but the lives of people around us. In this article, I’m going to talk about how that’s possible.
In the first half of 2020 I started working with a new client, on a consulting basis. I’ll spare the specific details for the client’s privacy other than to say they work as a therapist — and I’m giving that information only for the context that, when it comes to pricing, the industry doesn’t matter as much as everyone tells you it does.
What do I mean by that?
In every industry, people will tell you that you can’t charge more money because everybody else is cheaper. They’ll also use the same reason to explain why they can’t raise their own prices.
Often, it’s simple fear behind this. Fear that if they raise prices, they’ll lose all their clients. Or fear that if someone else charges more, that person will be successful and have higher revenue.
The thing is, every industry has multiple price points. You can get a bottle of Jack Daniel’s for about £25, but that doesn’t stop Louis XIII cognac being sold for £21,900.
And that brings me to an important but often overlooked point: “the market” needs higher and lower prices. It’s essential that those with less money have access to products and services that they need. It’s also essential that the other end of the market is adequately served.
If, indeed, your industry’s market has lots of other people charging similar rates, then you have an opportunity to charge more and serve a different part of that market. Operating at a different price point completely shifts who your competition is, regardless of what service you offer.
But putting your prices up is about more than just putting your prices up.
When my client and I started working together, the initial conversations were around growing the business with increased income being a part of that. At the time, my client was charging on the lower end — deliberately. “I want to be accessible for people with lesser means, too.”
And that’s fair enough.
We discussed a range of options for how we could increase income and still have a service on the cheaper end of the scale.
The unavoidable problem is this:
The less money you charge, the more involved you need to be.
For example, one option we discussed was introducing a subscription model. This could be priced very cheap, and be lucrative via volume. In other words, if 1,000 people paid £5 a month, that’s £50,000 a month in revenue.
On the surface this sounds amazing. £50,000 a month, and subscription services can be quite hands off.
But not really. In reality, my client would have had to create lots of content every week. The membership would need to offer value for money, so they would also need to be present regularly — either through live videos, group calls, or answering questions. Very quickly, the membership platform could be a full time job in its own right.
For a therapist who wants to work 1–1 with clients, it’s not a very appealing business model.
Higher prices start with you
At some point, we came to a simple conclusion: working 1–1 with people means that if you want to increase your earnings, you have two choices:
- Have more clients
- Charge more per hour
The first one is a balancing act. You need enough clients to have a business, but not so many that you burn out or can’t adequately handle them.
So the second one was more appealing. In theory, anyway.
Many therapists are almost apologetic about charging money. If you look at some of their sites you’ll probably see, right there on the homepage, a message like this: “I charge £70 per hour but if you can’t afford it I offer concessions.”
And my client was no exception. Any new patient was given the already low price, and told if it was too much it could be lowered.
When we discussed it, my client expressed nervousness about operating any differently. “Am I good enough for that?” “Will people pay it?” “Why would they pay that if they can go elsewhere?”
Charging more money starts with you, because you need to be good enough to justify it and know you’re worth it.
There are 3 golden rules to increasing your prices:
- Be confident in your service
- Know that you don’t have to compete on price
- Understand that you’ll never sign every prospect, whatever your price
Be confident in your service: if you don’t think you’re good enough, or don’t truly believe what you offer is a benefit to your clients or customers, you’ll always struggle with selling it.
Know that you don’t have to compete on price: price is only one method of competing. You can also compete on service, quality, experience, location, support, and so on.
Understand that you’ll never sign every prospect: you can charge the lowest price in the world and you still wouldn’t sign everyone. In fact, at a certain point, being cheapest becomes a disadvantage — people start to question the quality of what you offer. And remember, there are people who only become customers at a certain price point. The people who shop at designer stores, buy groceries from more expensive shops, or own Bentleys instead of Toyotas, are well aware that cheaper exists. They just don’t want it.
So the first step for us was working on confidence. As a therapist, this was quite easy — I just explained to my client that they were literally changing lives through their work, and that’s an amazing ability. Just find out what the benefit is of working with you, and your confidence will follow.
Your messaging is crucial
Ultimately, how you set your price is all about marketing.
To charge more money, you need to cultivate the sense that you’re worth it. And to do that, you need to dial your messaging in.
When you actively compete on price, and talk about price as a reason to work with you, you’re making life very difficult for yourself.
When you truly understand what problem you’re solving, and you talk about client outcomes and how their life will be different as a result of working with you, then you create options.
Let’s break it down a little.
Therapist A: “I’m a qualified therapist with 10 years’ experience and I help people with anxiety. Sessions are £70 an hour”
Therapist B: “Starting today, you can take the little steps to becoming the person you always imagined yourself to be. You can overcome the voice in your head holding you back, you can become confident and calm. I’ve helped hundreds of people do exactly this, and I’m here to help you, too.”
Which one of these is going to get more clients?
Therapist B. Not only are they going to get more clients, they’re going to be able to set their own price because they’ve positioned themselves so strongly that people will want to work with them over anyone else — because they’ve painted a picture of the Future Person.
This is why your messaging is so important. Look at any premium brand, and they absolutely nail this. From Apple to Bentley, they understand that the messaging is all about how you feel with their product, how it enhances your life. It’s the cheaper brands that focus on features and specifications.
You would pay more to work out with Dwayne Johnson than a Planet Fitness trainer
Offering a similar service doesn’t mean offering the same service.
You could spend an hour in the gym with a local personal trainer, or an hour in the gym with Dwayne Johnson — the prices won’t be the same, nor would the results.
The same is true in other areas too, though:
Let’s say you want a watch. Casio and Rolex are both watches, but they don’t serve the same market.
Hungry? McDonald’s sells food, so do Gordon Ramsey’s restaurants. You won’t get a 99p meal at the latter, though.
Need a car? You’ll quickly see that Ford isn’t serving the same market as Ferrari.
It doesn’t matter what you do. It matters how you communicate what you do.
Marketing is more than ads and tactics
When you get marketers together, it’s apparent that we love to talk about tactics and client acquisition. “Are Facebook ads still effective? Better than Google Ads? What’s your bounce rate? Do you split test lead magnets?”
That stuff is important, but it’s secondary to your messaging.
You could run the world’s best marketing campaign and send 10 million unique visitors to a landing page. But if that landing page is unclear and doesn’t give a sense of purpose, the conversion rate will be terrible.
That’s why marketing needs to begin with what you do, who you do it for, why you’re the best person to offer it, and how you communicate it.
I’ll refer back to my Therapist A and Therapist B examples above. Therapist A is in competition with, and at threat from, every other therapist who describes themselves with their qualifications and rates. Therapist B has elevated above it.
Why higher prices are important
I’ll start this section with a disclaimer: not everyone can or should charge more. The market needs to serve everyone, including those who can’t afford to pay more.
That said, what I’m referring to in this article is that the lower end is often already being served, with a lot of options and competition.
So this isn’t a piece to say everyone should be more expensive, but a piece to say that you don’t have to compete on price or be scared that the market is saturated.
The most remarkable aspect for me has been how increasing prices has changed my client’s life. Not in the sense that they’re now living a millionaire lifestyle (they’re not), but the personal changes.
Just 9 months ago, this client lacked confidence to state the price of the sessions. Today, those prices are higher and delivered confidently. And new patients don’t bat an eyelid — they know this is the therapist they want to work with, and they don’t haggle over price.
More importantly, though, is the impact it’s had elsewhere.
More money has meant more control over their day.
It’s probably every business owner’s dream to have control over their day. To choose their hours and spend more time with family.
As I said towards the start of this article, that’s very hard when you’re charging low rates, because you need lots of volume to generate sufficient revenue.
Now that my client charges more, they have achieved that ideal state. Now, instead of working all day every day, they take the afternoons off to be with family. They’ve saved more than 10 hours every week!
It allows them to be more present and to be a better partner and parent. They feel more involved with family matters. They are less stressed, more confident, and have the time to focus on delivering the very best service they can. With more time in the day and a clearer mind, they can spend time learning and implementing to be a better therapist and deliver better patient outcomes.
In every conceivable way, increasing prices has been positive for not only my client, but the people in their life. Everyone benefits in multiple ways.
And isn’t that what truly matters?