Who Picked Your Number?
By Chellie Campbell
If they want what you have, they’ll pay anything to get it. If they don’t want what you have, free isn’t cheap enough.
It’s always very interesting when the topic of pricing arises with the participants in my Financial Stress Reduction® Workshops. People have many issues surrounding charging money for their products and services. The most usual one is that they don’t charge what they really want to charge – they’re afraid to price themselves too high and lose a sale. Especially now during the “Great Recession!” Don’t we have to slash our prices, have a big sale, help our clients with payment plans?
The answer is “sometimes”. But if you slash your prices so much that you lose money on every sale, how is that going to help you?
Joe was a very polished, profession attorney who specialized in financial fraud issues (he must be really busy right now!) and worked on a contingency basis. He was struggling with his budgeting because he would work on a case for as long as two years before the case was decided and he got paid.
“Do you get a retainer up front to help with costs?” I asked.
“Yes, he said, “but it’s only $1,000 and that doesn’t last very long.”
“So, why don’t you ask for $5,000?” I replied.
He started to answer and then stopped himself. He smiled and said, “Well, I guess I’ve been afraid that if I ask for too much, they’ll leave and go somewhere else.”
“If they can’t pay you what you need to live, they should go,” I answered. “You need to at least ask for what you want – you can always negotiate a bit if you need to. Why not try it?”
“You’re right,” he said, “I have three prospective client meetings this week and I’ll try asking them for $5,000 and see what happens.
He left with that idea in mind, and I looked forward to seeing him at the next class session.
The following week, he was the first one to report his progress: “You remember I had three meetings with prospective clients last week? I asked each one of them for a $5,000 retainer. And you know what? Each one of them wrote out a check for that amount with no questions asked! And now I have $15,000 in the bank!”
Another class, a young woman had an 8-week workshop business helping people with relationships. She was unhappy with her income and wanted more money.
“How much are you charging?” I quizzed her.
“$400,” she replied.
“How much would you like to charge?” I asked.
“Well…$800”, she said hesitantly.
“So this week ask for $800 and see what happens,” I suggested.
She did, they paid – and another happy client’s financial stress was reduced. I love when that happens!
Soon after that, another workshop leader told me she was unhappy with my class because she still wasn’t making enough money even though she had successfully enrolled ten people in her latest 6- week workshop.
“How much are you charging?” I asked. (Is this sounding familiar?)
“$125,” she answered.
“Is that enough money for you to live on?” I asked.
“No,” she replied, “That’s the problem!”
“Well, who picked that number?” I said.
She looked at me for a long moment, then said, “I guess I did.”
“Then pick a better number and your problems will be solved!” I said.
Every business owner needs to pick two important numbers in their business:
How many people do you want to serve each month?
How much money do you plan to charge them?
Multiply these two numbers and see if it gives you enough money to pay your bills comfortably, save for the future, pay off your debts, buy a house, go on vacation, and live the life you desire.
If not, pick another number!
Chellie Campbell is the creator of the Financial Stress Reduction® Workshops, and author of The Wealthy Spirit and Zero to Zillionaire. She has been prominently quoted as a financial expert in the Los Angeles Times, Good Housekeeping, Lifetime, Essence, Woman’s World and more than 50 popular books. She can be reached at
Chellie@chellie.com
