How Should You Price Your Services?

In this video, Matt reviews a video that comes down to a lesson in pricing. If you have a service-based business and feel overbooked you might not be pricing high enough. Watch to learn why you should price higher.

There are tons of people out on social media giving business advice. Some of it is good advice, but most of it isn’t good. In this series watch CapForge’s owner react to different advice videos. He’s an expert in all things business and has 20+ years of experience under his belt. Some of the things he reacts to might even surprise you!

Video Transcript: 

Business Advice Video:

I can hire you for $4,999 for one hour of coaching. Why are you worth that? And how did you come to that number? Only the buyer determines that worth. I came to that number because I was booked too much at $1,500 an hour. When you get booked too much, you need to raise your rates. I also believe the person who pays a ton of money is so vested in hearing what you have to say. They’re so ready to do it that you’re not going to get the normal resistance.

Matt’s Review: 

OK, so this is kind of a lesson on pricing. And it makes sense. At first blush, it sounds crazy to pay somebody $5000 for an hour of coaching. But if you believe that at the end of that hour, you’ll be empowered to now make $10,000 or $100,000, then now all of a sudden, that’s a worthwhile trade-off. And if you’re somebody who charges $1500 an hour, but you are completely booked up for months in advance, then that means your time is really worth more than that. That the market is telling you you’re underpricing for your service. And although I don’t think the person who can spend 5000 is necessarily more vested or more willing or more ready to do the lesson or whatever it is you’re teaching somebody who would have paid or only could afford $100 or $500. I do think if those two people are otherwise equivalent, but one’s willing to pay you 10 times more. As a business person, you’d be foolish not to go with the person paying 10 times more. That’s just economics. So I think the lesson here is understand what you’re selling and the value you’re delivering. And make sure that you’re pricing it accordingly.