Tag Archives forpricing methods and strategies

How to Adjust Your Pricing Structure During COVID-19 // Pricing Methods & Strategies

WATCH THE EPISODE

It would be unrealistic to believe that people are spending MORE money right now during the COVID-19 pandemic. Many people have been laid off or their partners have been laid off. Now with that being true for some people, it's not true for all people. In my new video I share 6 ways to pivot your pricing plus answer a few other COVID-19 business questions.

How do we adjust our pricing structure & our business during COIVD-19? Do we seriously discount our services or should we offer everything for free? (Quick answer – no, don’t offer everything for free.)

When shit hit the fan with COVID-19 I was really concerned too. I had a lot of questions, a lot of fears and I really didn't know what it meant for my business. In the past couple months since this whole thing started, I've actually managed to stay on track with my business. Phew! I have continued generating sales and I haven't seen a dip in my income. BUT I have made a few adjustments in my pricing structure & shifted my language.

How can you pivot your pricing right now?

There's nothing wrong with offering a little bit of a small discount. Here are 6 ways you could pivot your pricing & business structure during COVID-19. The first being adding a little bit of a discount but also adding some sort of urgency to it so it’s not always available.

Another pivot would be including a fast acting bonus. A fast acting bonus is basically an incentive for people to act quickly. If you’re in the period of launching something like a course or a program, then offering a really juicy fast acting bonus is not a bad thing.

The third thing you can offer is a payment plan. You may already have payment plans for your programs, but if you don't it might be a good time to offer one.

Say you're launching a membership, maybe it's monthly. What you can actually do is give people incentive to purchase multiple months in advance. So if your membership is usually $50/month, your incentive could be to buy six months upfront and you could give it to them for $400 instead of $600 to save them money in the long run and gives them an incentive to commit for a longer time period.

You could also offer a free trial. You could offer a month free to your membership program where they could take advantage of the content and interact with the community. The hope is that they're going to come into the program, realize how amazing the community is and the support they receive and hopefully they will choose to stay.

Finally, when it comes to adjusting your business to COVID-19, is if you have something like a group program, maybe you can break it up and sell it in two parts.

So go pivot your pricing if you feel like it might be a good move for you and make sure to let me know how it goes - you know I love those DM’s!

Different Pricing Methods for Your Coaching Program

WATCH THE EPISODE

Are you confused about the best pricing method for your coaching programs? In my new video I'm going to discuss the pros and the cons of different pricing methods and which I found best to work for me. There are three pricing methods in particular that are typically used for coaching programs: one-time payments, payments plans, and reoccurring monthly payments.

Let's start with one-time payments. This is by far the easiest way to price your program because it's simple from a bookkeeping perspective, it's easy to track. You’re literally just taking one payment and getting all the money up front. But the biggest con to one-time payments is that depending on how expensive your program is, people may not be able to afford it upfront.

So that’s where payment plans may be a better option. I highly recommend that you offer some sort of payment plan for most of your programs and services because it makes it a bit easier to accommodate for those who might not have as much money upfront. A really great pro for the payment plan is it actually solves the objection to some of the money objections that might come up during a sales call. You can offer more than one payment plan – whether it’s bi-weekly, monthly or quarter.

But the length of your payment plan should not exceed the length of your program. So if you’re doing a three month program, then you don't want to offer a four month payment plan or a six month or even an annual payment plan. You don't want people to still be paying after the program has completed.

Another pro to the payment plan is that it allows for money to trickle in over time. Now a con for the payment plan is that sometimes people do default on their payments, meaning their credit card doesn't go through. But for the most part people are going to be pretty good about updating their credit card information and making sure that payment happens.

It’s important to make sure that you're getting some payment upfront. This may mean your client is paying a higher price point for the first payment and then pay less for the payments that happen after that.  The first payment should cover the work you do up front and any expenses to make sure you're not waiting till month two or month three to actually be turning a profit on that client.

An important thing to mention about payment plans is that you need to make sure you are using a system that sets up your payment automatically. What I mean by that is that you don't want to have to be invoicing your client every time a payment is due. System like Stripe or Practice Better can do this automatically.

The final pricing method is a recurring monthly payment model, which is similar to a payment plan, but instead of even offering them an upfront payment, you just tell them it is a recurring payment, so they pay a certain amount each month. And if you do this, I do highly recommend that you charge on the first of the month and then the work happens afterwards. Similar to a payment plan, it’s continuous money coming in and It's very affordable for your client. Now in some cases, retention can be an issue. And what that means is maybe once your program is done, you start charging them a lesser recurring amount just so they have access to support. All monthly memberships have retention as an issue, so you really have to try to make it worth their while and provide enough value that they actually stay.

Of these 3 payment methods, I prefer the monthly recurring option because although it’s really nice to get all the money upfront, I do like the recurring revenue because it meant that I didn't spend it all up front. But it's up to you which model makes the most sense for you, your business and your clients.

Pricing Methods & Strategies for Your Signature Health Coaching Program

WATCH THE EPISODE

The most common question that I get from health coaches is how to price their programs and services. Luckily I have a simple formula for pricing your programs that is going to help you make money and prevent you from going broke. Watch my video to learn more or continue reading!

I totally understand the struggle and the pain that goes into trying to price your programs and services. I was a health coach for five years and this was by far the biggest struggle that I had. I went over it and over it again in my head....what is my value? Am I charging too much? Not enough?

Money is a pretty tough subject for most health coaches because a lot of us got into this industry because we wanted to help people, not necessarily because we wanted to become rich. The thought of charging higher prices to help people who are desperate and suffering might feel a little bit icky, or maybe even a little bit gross. But what you may not realize is that by undercharging your services or even offering them for free, you are actually preventing those people who are suffering from getting the results that they desperately need.

The exchange of money with your client is a massive part of their connection to actually doing the work and getting a result. As you know, you can't actually do the work for your client. They need to do it for themselves, and they need to really want it for themselves. So, in order for them to succeed and get that results, they need to be committed. And that exchange of money is actually a massive part of that commitment that they make to their health. Your client needs to find enough value in what you are offering that they actually want to give something away of value in exchange for what you are offering. And if they don't, it's pretty unlikely that they are going to be committed to your program and even complete it.

Have you ever offered a discount on your services, or maybe even offered to give your services away for free? And what was the result of that client? Did they actually stick with it? Did they actually get a result? I would say like 9.5 times out of 10, they didn't actually complete it, stay the course, or get the result that they initially wanted to get. And you also might have experienced this personally. Think of something that you were given for free. How likely was it that you actually committed to it?

If people aren't committed to your programs, then it's actually a huge waste of your time, but it's actually a huge waste of their time as well. If you're going to spend the energy working with a client, you actually want them to get a result. You want them to be happy and give you a testimonial after working with you. So their investment should be enough that they stay fully present and fully committed to the process that they are signing up for you with​.

When it comes to a pricing formula, the first thing you want to do is you want to determine your hourly rate. Your hourly rate is for your reference only - you should never disclose this with your client. And if you have no idea what to charge for an hourly rate, think of the last job you just had, maybe the highest-paying job you've had up until this date. Take that number and double it, and there's your hourly rate. So, let's say your last job was working as a personal trainer for $50 an hour, so I would start at $100 an hour for your health coaching services.

The next thing you want to determine is, how much time are you going to be spending in session with your client in that specific program? So, your program might include a one-and-a-half-hour intake session followed by a one-hour test results session, and then maybe you do four 30-minute follow-up sessions at the end of the program, so that is a total of 4.5 hours.

Now, we can't stop here. We actually need to determine the time that is spent behind the scenes with each client. And this is a big mistake that I see a lot of health coaches making, is that they charge for the in-session time, but they forget about the time that they actually spend behind the scenes with each client. So, let's say that you need 10 minutes prior to a session to prepare, and maybe you need 10 minutes after a session to log notes and maybe send resources to client. And then let's say you're running labs with your clients; you're probably going to need at least an hour to review those lab results and develop a protocol. So, if we consider all that, that's actually going to equal an additional two hours of your time.

The next thing you want to do is determine how much time you're spending supporting each individual client. So, maybe you offer unlimited email support. How much time on average are you spending answering emails with each client? And if you don't know this, that's okay, just come up with kind of a generic average. And then you want to track this over time with each individual client so in the future, you know exactly what this number should be. Let's pretend that it's one hour per client. The next thing you want to do is add in any extras that you might pay for with each client. So, for example, do you offer a welcome gift? Make sure to include that. Do you pay for your clients' lab tests? You want to include that in the price as well. So, let's pretend that in this example, that total is $300.

Finally, let's do the math. So, you want to total up your hours spent in session, out of session time, and the time to support your clients, so in this example, that's going to be seven and a half hours. Now you want to multiply that 7.5 hours by your hourly rate, which in this example is $100, and that equals $750. Now you want to add your extras to the total, so that's going to be $750 plus $300 of extras. So, the price for this specific package is going to be $1,050. Now, this price shouldn't actually be set in stone. This is not going to be the price you charge for an eternity.

As a new health coach, I actually don't recommend listing your prices on your website, and I actually recommend increasing your prices with every few testimonials that you get. And so, as you get more testimonials and raise your hourly rate, you're just going to complete this formula again. There it is. It's that simple.

Okay, so now that you know how to price your signature program, you might be wondering about scaling it and actually turning it into a group program. So, if you want to know how to do that, make sure to grab my free Launch Your Group Program checklist!