Why You Shouldn't Charge What You're Worth (And What to Do Instead)
As a female entrepreneur in coaching, therapy, or consulting, you've likely heard this piece of advice more times than you can count: "charge what you're worth." It's a popular mantra in the business world, often shared with the best intentions. (I find it as annoying as a mosquito on a summer evening…). I know, I know, it’s meant to empower you, I know.
But what if I told you that this well-meaning advice might actually be holding you back?
Let's take a moment to consider what "charge what you're worth" really implies. It suggests that we can—and should—put a monetary value on our inherent worth as human beings. But here's the thing: your worth as a person is infinite and immeasurable.
You're not a product on a shelf, and your value isn't determined by a price tag.
Imagine trying to put a price on your unique combination of skills, experiences, and the transformative impact you have on your clients' lives. Consider the value of not just what you do, but who you are—your presence, intuition, empathy, and the safe space you create for your clients, just to name a few things in the professional arena. It's like trying to quantify the depth of the ocean or the expanse of the sky—simply impossible.
So, if we're not charging what we're "worth," what should we do instead? This is where value-based pricing comes into play. It's an approach that shifts the focus from your perceived self-worth to the tangible value you provide to your clients.
Here’s what we’re going to explore next:
- Why the "charge what you're worth" mindset can be problematic
- How to separate your self-worth from your pricing strategy
- The benefits of adopting a value-based pricing approach
- Practical steps to implement value-based pricing in your business
The Pricing Paradox: Why "Charge What You're Worth" Falls Short
Your worth as a person is infinite and unchanging. Your pricing should reflect the value you provide, not your value as a human being.
The problem with the "charge what you're worth" mentality is that it ties your intrinsic value as a human being to a "dollar amount". It's like trying to quantify the unquantifiable. When we link our self-worth to our pricing, we're setting ourselves up for a never-ending game of "prove your value."
This mindset can lead to several issues:
1. Undervaluing your services: If you're struggling with self-doubt or imposter syndrome, you might set your prices too low.
2. Overpricing and guilt: Conversely, you might set high prices because you know "you’re worth a lot" but feel guilty or anxious about whether you're "worth it."
3. Emotional rollercoaster: Your self-esteem becomes tied to your income, leading to ups and downs based on your financial success.
4. Neglecting market factors: You might ignore important factors like your niche, or the actual value you provide to clients.
The Socialized Mind vs. The Self-Authoring Mind in Pricing
Let's talk about two different mindsets that can influence how we approach pricing: the "Socialized Mind" and the "Self-Authoring Mind." Don't worry, we're not going to get too academic here – think of these as two different ways of seeing yourself in the world.
First up, we have the Socialized Mind. This is like being in high school all over again (I know, bear with me). Remember how much you cared about fitting in? That's the Socialized Mind in action. When we're in this mindset:
- We're like social chameleons, always trying to match our colors to the environment around us.
- We care a lot (maybe too much) about what others think of us.
- Our self-worth? It's like a scorecard based on how well we're meeting everyone else's expectations.
Now, here's where it gets interesting. The whole "charge what you're worth" idea? It's got Socialized Mind written all over it. Here's why:
- It's like saying, "Hey, let's slap a price tag on you as a person!" (Yikes)
- It suggests that your value is determined by what others are willing to pay. Talk about external validation!
- It mixes up two very different things: who you are as a person (priceless) and the market value of your services (important, but not the same thing).
But the good news is that there is another way of thinking called the Self-Authoring Mind.
This is like graduating from that high school mindset and really coming into your own. When you're rocking the Self-Authoring Mind:
- You've developed your own internal GPS for navigating life and work.
- You can look at society's rules and say, "Thanks, but I'll decide which of these work for me."
- You're able to look at societal norms and expectations and go, "Hmm, let's think critically about this for a second."
This is where value-based pricing comes in. It's like the pricing strategy equivalent of the Self-Authoring Mind. Here's how:
- It recognizes that you, as a person, are separate from the services you provide. Both are valuable, but in different ways.
- It requires you to really understand your skills, your niche or market, and what your clients need. It's like being the curator of your own professional gallery, carefully selecting and presenting your best work.
- It involves a lot of self-reflection and making your own decisions. You're the author of your pricing strategy, not just following a script someone else wrote.
Now, moving from "charge what you're worth" to value-based pricing isn't like flipping a switch. It's more like a journey – think of it as leveling up in the game of entrepreneurship.
Value-Based Pricing: The Empowering Alternative
Focus on the value of your results and your clients' perceived benefits.
Value-based pricing shifts the focus from your perceived worth to the value you create for your clients. Here's how to approach it:
1. Identify the tangible outcomes of your work
2. Understand your clients' perceived value of these outcomes
3. Consider the transformation your clients experience
4. Factor in your unique approach and methodology
This approach allows you to price your services based on the results you deliver, not on some arbitrary assessment of your personal worth.
Embracing Your Entrepreneurial Power with Value-Based Pricing
When you shift to value-based pricing, you open up a whole new world of possibilities. You can fully appreciate and leverage your unique gifts, expertise, and the way you help your clients. This approach allows you to:
1. Celebrate your unique strengths and experiences (which is a great way to build your confidence and self-esteem!)
2. Continually improve your skills to provide even more value
3. Contribute to a better world without tying your self-worth to your bank balance
The Journey to Value-Based Pricing: Finding Your True Worth in Business
Separating your sense of self-worth from your pricing isn't always easy. It's a process of untangling beliefs and patterns that may have been with you for a long time. Here are some steps to help:
1. Recognize the difference between your intrinsic worth and the value of your services
2. Challenge negative self-talk about your worth or abilities
3. Focus on the tangible results and transformations you provide for clients
4. Seek support from mentors or coaches to work through any deep-seated beliefs about your worth
Your Priceless Future: Embracing Value-Based Pricing as a Female Entrepreneur
Oh honey, I'm priceless. But let me tell you about the value I can create for you...
This is important: you are not a commodity to be priced. You're a unique, valuable human being with gifts to share with the world. Your worth is intrinsic and unchanging.
Your pricing, on the other hand, should reflect the awesome value you bring to your clients' lives and businesses. It's not about you - it's about them and the transformations they experience. (I know a lot of you/us don’t want to be the center of attention, so here, I gave you a very good reason to not focus on you!)
By embracing value-based pricing, you're not only setting yourself up for greater financial success, but you're also honoring your true worth as a person. You're saying, "I know I'm invaluable, and here's the specific value I can bring to your life or business."
So the next time someone tells you to "charge what you're worth," you have here’s a permission slip to smile knowingly and say, "Thanks, but not thanks. I prefer to charge based on the value I provide. Want to hear about the amazing results my clients experience?"
Now go forth, price based on value, and change the world!
See you soon,
Maria x