Pricing Your Products and Services

One of the biggest challenges many expertise-based businesses face is figuring out how to price your products and services.

Get it wrong, and you risk leaving money on the table. Even worse, you could end up diminishing your brand or pricing yourself out of the market completely.

The bad news: there’s no definitive formula for finding the optimum price.

The good news: In our experiences of working with subject experts, training providers and consultancy businesses, there are common pitfalls and blindspots you can avoid to be more effective in your price-setting.

Classic Pricing Mistakes

1. Cost-Based Pricing

One of the most frequent mistakes we see is taking a cost-based pricing approach. This is particularly prevalent in training and education where you have different modalities of delivery (e.g. online or in-person).

We often find that many expertise-based business often undervalue their offerings simply because a digital delivery reduces direct costs when compared to the logistics and travel involved in face-to-face.

Instead we’d recommend taking a value-based approach instead. Don’t assume that lower costs deliver less value to your client.

(We’d argue that in many cases digital delivery provides far greater value on various key metrics than in-person training – but that’s a topic for another day).

One way to think about this is to consider how transformative the outcome is for your client?

Is it a modest improvement to their current state?

A significant (but not groundbreaking) advancement?

Or a complete game-changer?

Naturally the bigger the shift, the higher your price should be.

Avoid letting the mechanics of delivery cloud your judgement, focus instead on the transformation your solution provides.

2. Undercutting the Competition

Another common trap is setting your price below competitors to attract clients. While this may seem like a quick way to gain market share, it can backfire.

Pricing is a signal of value; if your services are too cheap, potential clients might question your expertise or the quality of your offering.

Rather than racing to the bottom, consider how you can differentiate your services and add value.

For example, consider ways to add more value through inexpensive inclusions like:

• 30-minute live drop-in clinics
• Tailored resources
• Customised templates or tools
• Follow-up review sessions

These small yet meaningful additions can create a clear value gap between you and your competitors, justifying a higher price point.

3. Pricing based on what you would pay for it

As a subject expert, it can be surprisingly difficult to view your expertise from the perspective of someone just starting out (the “blind-spot of expertise“).

You may underestimate the immense value your knowledge unlocks for beginners. For instance, what feels like common sense to you might be groundbreaking for your client.

This blind spot can lead to undervaluing your offerings and setting prices that don’t fully reflect their transformative potential.

A key point here is: you are not your client. Don’t forget this!

4. Assuming you have to price for your current market

If you’re setting your prices based on your current market, are you missing an opportunity?

Your choice of price helps potential clients identify if this product or service is aimed at them. Would your client engage with an agency that charges £1,500 for a new web site? £15,000? £150,000?

If you want to get into a new market, consider the pricing too. If your positioning is nailed, but your pricing doesn’t reflect this, you could be swimming against the tide.

Key Pricing Tactics

So, avoiding these common pitfalls is the first step. What else should you consider?

1. Anchoring and Comparative Pricing

Clients rarely assess pricing in isolation – they make decisions based on comparisons. By offering a high-priced premium option, you can influence how other options are perceived. This is known as anchor pricing.

For example, if your premium service includes personal coaching and tailored resources at £2,000, your core offering at £1,000 will feel more accessible, even though it might still be higher than competitors.

This strategy not only enhances perceived value but also provides a natural upsell opportunity for clients seeking the best.

2. Scarcity and Exclusivity

Scarcity and exclusivity can be powerful pricing levers, particularly if you deliver your services in cohort-based or limited-access formats.

For example, if you’re running a programme or masterclass with a capped number of participants, or only delivering it over a specific time period, you can use this to create urgency. You can also position your service as a premium offering.

Highlighting the exclusivity of your service taps into the psychological principle of scarcity, where people perceive limited opportunities as more valuable (think Glastonbury tickets). This justifies a higher price and helps you stand out in a crowded market.

3. Risk Reversal

Clients are often hesitant to invest in services if they perceive significant risks. You can counter this by incorporating risk-reversal strategies into your pricing.

Examples could include:

• Offering satisfaction guarantees (e.g. a money-back guarantee if milestones aren’t met).
• Structuring payments around results (e.g. pay-per-milestone or partial refunds if objectives aren’t achieved).

These approaches reduce perceived risk and make higher prices more palatable, as clients feel reassured that their investment is protected.

Key Pricing Tactics

What practical steps can you take today to find your optimum pricing?

1. Start with Your Ideal Client in Mind

Begin by identifying your ideal client and understanding what they value most.

What outcomes are they seeking?
What pain points are you solving?
What is the cost to them of not having your intervention?

(Pro tip: Jonathan Stark has some great insights into how to handle value-based conversations).

By focusing on the cost of inaction for your client, you can position your pricing as an investment rather than an expense. If your service helps clients avoid costly mistakes or accelerates their path to a desired result, aim to quantify this benefit in your discovery calls and use it to justify your pricing in your proposals.

2. Test Pricing Tiers

Introduce a tiered pricing model to appeal to different segments of your audience. For example:

• Basic Tier: A streamlined offering at a lower price point.
• Premium Tier: Includes additional features like personalised support.
• Enterprise Tier: Tailored solutions for organisations with bespoke pricing.

This approach allows you to capture a wider audience while providing natural upsell opportunities for those who want more comprehensive support. You can then analyse interest in each and adjust.

3. Use Pre-Sales to Gauge Willingness to Pay

Launch a pre-sale or beta version of your service at an introductory price, typically to your mailing list. This allows you to test the market’s willingness to pay before you setting final pricing.

If you have a primed audience, create a short survey outlining your proposed offer and ask them what they feel they would be prepared to pay for it?

Final Thoughts

Pricing is both an art and a science, and it’s difficult to get this right first time (or ever feel that your pricing is ‘spot-on’).

It’s about balancing perception of your offering, the value it provides, attracting the right kind of client and your own business goals. Keep experimenting – pricing isn’t static.

Remember that when done thoughtfully, pricing becomes more than a number. It becomes a reflection of the value you bring to your clients.

Andy Jack

Andy loves helping subject experts, authors, speakers, coaches and key persons of influence to monetise their expertise with online learning. When not on his laptop, he'll usually be found up a mountain!