4 Signs To Know When To Raise Prices

Welcome to the Empowered Edupreneur Podcast. My name is Michelle Smit, and I am an ex-teacher turned online business coach for Edupreneurs, the owner of Digiteach and a six-figure entrepreneur. I am in love with empowering educators just like you to create freedom filled online businesses and lives they love.

If you are looking to up-level your skills, your finances, your mindset, and change the trajectory of your life as an educator and business, then you are in the right place. Think of this podcast as your weekly dose of business and mindset development to help unlock the infinite potential within you. To play bigger with your life and go after your dreams.

We are going to have so much fun together. So thank you so much for pushing play today. Now let's dive in.

Hello, hello, and welcome back to my podcast. As always, I'm so, so happy that you are listening and I'm so stoked to be talking to you today. I am back in the Netherlands. I just came back from an awesome trip to England. I had two weeks in the Isle of White and about five days in London I went wedding dress shopping in London with no success.

But as soon as I got back to the Netherlands. Literally, as soon as I landed, I saw a dress that I loved. Took my bicycle, went to the shop, bought my dress, and I am very excited. So those of you who don't know, I will be getting married sometime next year. So that's a little bit on my side, some exciting news and yeah, I guess today what I felt called to share with you was something around pricing.

Pricing obviously comes up a lot because it's such a difficult one for all entrepreneurs, and I find that educators in business have a really tough time with pricing their products, but also just raising their prices. And so it's such an area of pain and struggle, and it's a place where people get really uncomfortable and it's really scary.

And I can really relate to that because I've walked that journey myself. I've had to overcome a lot of resistance in with regards to pricing my stuff. If you don't know me, I started my business a good couple of years ago and I was literally earning $20 an hour. 

And so my first product that I ever made was only $107. For a four-week course, it was only $107 and it was wildly under-priced. And I did this for a long time in my business where I undervalued myself, under-priced myself. And I've really had to go on a journey of overcoming resistance to pricing. And so I wanted to chat about this with you today in this episode.

And to be honest, it is so normal that educators in business have a tough time with pricing. Actually, anyone really in business, especially women I think in business as well. Just given the conditioning that we have gone through all our lives, that scarcity conditioning, that not enoughness and teachers especially just being undervalued by nature.

And that kind of just gets buried into you on like a subconscious level. And so without even you realizing it, often what happens is that you are leaning to the space where you are undercharging and overworking, and I see this pattern a lot. It's quite rare to see someone who starts their business and is in business and they immediately are.

They have an equal exchange between what they're offering and the price they're charging. Often you are undercharging and over-delivering and that dynamic is not really great. It could be good for a period of time, maybe in the beginning, just when you want to get like some confidence built. But it's not a sustainable way of running your business.

So if you are feeling burnt out, undervalued, overworked. And a little resentful in your business, or maybe you're setting your own prices in some capacity, whether you're just a one-on-one teacher and you set your own prices, you have a teaching business, or you've just started your business, then this is the episode for you.

All right, so I'm going to help you reframe pricing and make it feel a little bit more light and breezy, and it's not so heavy and so serious and definitely not a reason for you to get so scared that you stay at the same price for years and you undercharge for years because you are doing yourself a major disservice.

So in this episode, I'm going to talk about why you shouldn't stress so much about pricing. You should raise your price even if it feels scary. How to pick a price, and how to announce your new prices. 

So why should you not stress so much about pricing? Okay. Firstly, I think this is a really important one to just note, is that there is a customer for every price point. I'll say that again. There is a customer for every price point. Let me give you some examples. I taught English in Vietnam and I would normally make $20 an hour, and that was just, that was actually a very good rate in Vietnam, and that was pretty high in Vietnam, and it was good, right?

But then a very wealthy family in Vietnam hired me to teach their two children. There were about, I think one was about seven and the other one was about four. And they paid me about $60 an hour. I remember going to their house over Christmas, right. And their Christmas tree was made up of dollar bills, and I was just blown away at how wealthy this family were.

And they lived in a massive, like four story house in Vietnam. Their father was a famous pop singer. He had this whole epic room with all these awards and it was just like such an epic house. I knew that they were wealthy and they immediately offered me $60 an hour. I didn't even need to blink an eyelid, so they paid me three times the normal rate just because they like me.

I don't know, maybe they like my accent or just me in general. I have no idea. But they paid me three times the normal rate for me to teach their kids. They really wanted me to teach their kids English. And I literally could work just a few hours a week and I would have enough money to live in Vietnam and save.

So that is an example. I mean, I was offering really nothing different to other teachers in my experience. They just wanted me to teach their kids and they really wanted, and they wanted me and they wanted to pay a top dollar for me to do it. That is an example of like, there's a person who's willing to pay any price, even if it's the same service they are wanting to pay for what they want, right?

There's always someone who's going to pay more for what they want. Another example is you have pens that sell for like $1, maybe even 50 cents pens. Okay? And then you have Montblanc pens. That go for thousands of dollars. They literally do the same thing. They write, but you have people buying 50 cents pens and you have people buying thousand-dollar pens.

You have Primark clothes or target clothes that are super cheap, and then you have Louis Vuitton and Chanel clothes that are almost a hundred, a hundred times the price. Clothes, pens. All of these things have the same function. They do the same thing. You write with a pen, you wear clothes. So what is the differentiator?

It's their branding. It's their positioning, and it's who they choose to target in their marketing. And obviously material and all of that is different. Like a Louis Vuitton bag is going to be built and made with much, much better craftmanship and material then what a Primark bag would be made.

Of course, those are major differentiators and it feels luxurious to have a Chanel bag or Louis Vuitton clothes or whatever it is. It feels different, okay? So of course the material is different between the cheap and the expensive. But essentially they have the same functionality, okay. So this is what I really want you to keep in mind all the time.

There is a customer for every single price point. There really is, and it can be in all different niches. I even saw, I think it was a paperclip and I think it was Louis Vuitton, but they were selling a Louis Vuitton paperclip for like $2,000 or something like that. I remember thinking that's crazy, and that if they're selling it, there's someone who's buying it.

Normally that's the case. If you see it selling, then someone's buying it right. So just really keep that in mind. You can sell anything, it's just about your branding, your marketing, your positioning, and that you're aligning your branding, marketing, and positioning with the ideal client that you want to attract and work with.

So if that's important, so if you're wanting to set Louis Vuitton prices. You want to be communicating Louis Vuitton message to Louis Vuitton type of person, right? It's going to have to align. You can't set a Louis Vuitton price and then communicate a message that's like a prime mark or a target message to a prime mark and target type of person with those type of problems.

It's like a different ballgame. It's a different message. It's a different way of speaking. They have different problems. They have things that they value differently. Those avatars are kind of different, right? And so that's important. And what I find is that so many people stress so much about pricing.

I really see it all the time where they're like completely can't even choose a price. They cannot even choose a price because they're so worried about it. But it's not such a big deal. And the reality is you can change your prices at any point. It's your business and it's your rules. And when it comes to pricing, it really is a money mindset thing.

If you are finding yourself really struggling to increase your prices or to charge prices, you want to look at your money mindset. You want to look at how your capacity to receive your capacity, to value your time, and your expertise, and your ability to actually charge for it and receive cleanly. So without a guilt.

Without shame to just receive money in exchange for your services. It really is a money mindset game. That's how money mindset is so important in business because if you are going to be selling stuff charging your own products and prices, you absolutely need to get comfortable with doing that. It's part of your evolution as a business owner, right?

And you want to be pricing your products and services. In relation to the exchange of value and the transformation that you're offering, okay? And so often people think, ah, if I'm charging an premium price, I need to make this program six times longer with six times more material. But it's not about how long it is and how much material it is, it is actually about how you transform that person on the other side.

So how your student transforms your price really should represent the transformation. And if you can get someone a transformation in one week, then damn you can get them a transformation in one week. You don't need to add more fluff and more time and all that stuff to it, okay. If you think, I'm so good at what I do, I can have two sessions and totally transform their life.

You set your two sessions and you set a high price point for that because people are willing to pay for a faster transformation. And that is that premium kind of branding vibe is like that joyful, fast, seamless transformation. That's what people want to pay for. Especially the higher the price point, the faster that transformation and often the bigger and more life changing that transformation.

Now I work with teachers and I work with teaching business owners and I'm always seeing them on the side of undercharging. So they're always leaning to the undercharging side. It's quite rare that I find someone who immediately charges what they're worth or what their work is worth or even charges above that and really wants to go for the premium kind of option.

And so this is just something that I think every educator should. This episode is something that I think every teaching business owner or educator who wants to be in business. Or it's just out of their business needs to listen to, okay. 

So a question I want to ask you. Do you want to be the prime mark or the target of your industry? Do you want to be the Mango or the Zara of your industry, or do you want to be the Louis Vuitton and the Chanel of your industry? Because really you get to decide that. And if you are wanting to be the Target and the Prime Mark of your industry and you think that charging the lowest prices is going to help you get more and more clients, it doesn't always work out that way.

If you believe that setting a low price is the way to make your business work, It's not like that. Often when you set a very creepishly, low price, people question that and it can damage the brand to a certain extent. It shows a lack of confidence. It shows a lack of expertise. It shows that you're uncertain in what you're doing and it shows in your energy.

So pricing is a very energetic thing. An energetic alignment is important when it comes to pricing. If you are severely undercharging out of an energy of fear and scarcity and panic and lack of confidence, it comes through. But if you choose to charge a lower price, say you want a low-ticket offer, and you're choosing that price out of like an expansive energy, being like, okay.

This is a no-brainer investment. This offer is so good that it's going to sell like hot cakes, that there is no way that people will say no to this. And that's the energy you're coming from then that is a very different energy. So it really is important to check in with yourself energetically of why you are setting those prices.

Especially if you're setting low prices. Is it from an expansive energy where you're like, this is a no-brainer investment. Like, I'm going to impact thousands of people with this thing. Or is it from a scarcity energy of, ah, what I do is not good enough, no one wants it, so I'm going to just charge the lowest and just hope someone takes it because that will show right through. And it's important to check in with yourself on that. 

Alrighty, so let's look at four signs you should raise your price, okay. So now that we have come to the point that there's a customer for every price point and that it's not such a big deal to charge prices and that you can always change your prices. Let's look at when you should be raising your price, okay? There are typically four signs, I'll mention now that you should start to raise your price. 

Sign number one, you have very high maintenance clients. Now, having high maintenance clients is a sign that maybe you are undercharging and your clients require a lot of extra time and attention. And they're taking more energy than you probably would've anticipated. 

And if they are using a lot more time and energy and they're a lot more needy and they're a lot more like disempowered in their state. It's potentially a sign that you need to raise your prices because high maintenance clients, they come, but they typically are the ones that invest the lowest.

And I'm not going to make like a conclusion here or say something like that. But essentially what I've found is that the lower your prices, the more heavier the clients are in maintenance. Probably because they're just not very secure in their investments or they're not secure in what they are trying to do, and there's a lack of confidence and so they become quite high maintenance. And you have to put in a lot more energy to get them through.

Whereas what I found when I was charging high prices, I had a lot more empowered people that were very certain of what they wanted and what they wanted to do. And they were already a little bit in the game, and so they weren't so dependent on me as a coach. And so by raising your prices, you can help ensure that you're not taking on too many high maintenance clients that are going to take a huge amount of energy from you. 

Maybe not in a equal exchange for that price point. Even often, there's not an equal exchange and that you are overworking and overserving and over helping. Spending all these hours with these people and they've only paid a certain price. And so that's going to prevent you from growing your business.

And so what I noticed is back in the day when I had those cheap prices, I had some seriously high maintenance students or clients that needed a lot more handholding. A lot more babysitting, a lot more spoon-feeding. And at that point I was doing it because I thought that was normal. But I was just energetically enabling them to continue the spoon-feeding.

And it wasn't a healthy exchange of energy. I was over-delivering and undercharging. And when I raised my prices, I didn't have a drop in conversion. But what I noticed is that the people who were coming into my world were more empowered and by nature they needed less spoon-feeding, they needed less handholding, they were more accountable.

They were taking action, and that was the kind of client and student that I wanted to work with. And so that made a big difference. Raising my prices actually did help because when people pay a higher price point. They are much more in the game. They're much more serious. They're much more committed than if they were to just pay a very low price.

Especially if you're looking at a coaching dynamic of some sort. Where you are helping them through a transformation that they really need to show up to. And it's the same with teaching. I mean, they need to show up to the process to actually get that transformation. And when they pay, they pay attention, right? So that's sign number one. 

Sign number two is you are fully booked and at capacity with one-on-ones, and maybe you have a long wait list. So that's a sign that you are in demand and your services or your products are in demand. And this is a really good opportunity to reassess your pricing and just ensure that you're being fairly compensated for your time and that you're charging adequately.

And when you raise your price, it's going to help you balance your workload and it's going to help you prevent burnout. And you'll be able to take on fewer clients whilst still earning the same amount of money. So it really is ideal. And if you are fully booked with one-on-ones and all your ad capacity and you're in demand, then definitely that's a very good sign that you need to raise your price.

Sign number three is you have been hearing incredible feedback from your students. So things like, you have changed my life, or I got this amazing transformation in such a short time. All of that kind of feedback is a sign that you are delivering exceptional value and you're really impacting people.

And in this scenario, raising your prices can help position you as a premium provider and attract more clients who are willing to pay for that high quality service because remember, there's always a customer for every price point, right? So it's important to just remember that your time, your expertise, the impact that you have on people, the transformation that you're providing people, all of that is so important, so valuable, and it should be compensated accordingly.

Then sign number four. If your results are incredible, if you are getting really good results in the thing that you're teaching. If you're just really good at what you do and you know that you can help someone achieve a result in a faster, more efficient timeframe than any other way, that is a good time for you to raise your price, because that's what people pay for.

They pay for the faster transformation. The premium service, right? And if you have amazing results and you're charging really low. There's a lack of congruency there. There's misalignment there, and you're shooting yourself in the foot. All right, so those are four signs that you should raise your price.

And then for the fifth thing, I just want to mention. You can raise your price just if you want to raise your price. You don't need to listen to everyone else and what they think your price should be. If you are feeling an energetic misalignment with your current price and you know that there's something not right with it, and you are delivering more than you are receiving, then you get to raise your price just because you want to, because this is your business.

These are your rules, and you get to call the shots. And if people don't like it, then that's okay. They can go work with someone else. You will find the people who, want to work with you. They exist, remember, you can have the 50-cent pen, or you can have the thousand-dollar or couple of thousand-dollars pen.

You can have the Prime Mark, or you can have the Louis Vuitton. There's many people for everyone, right? And so you get to raise your price simply if you want to, and it feels right to you. That is just a little permission slip I wanted to throw in there. 

Now, how to pick your prices. Okay, you may be hoping for like a really life-changing pricing hackle method here, but really it's quite simple.

You pick your price based on these few things. Check out your market just to get a feel for things, but don't let this freak you out. If you see cheap stuff, it doesn't mean that you need to be cheap. Being cheapest is not the best. Okay? Being cheap means that you are creating a brand that is perceived as cheap, and the work that you do and the value that you provide is often perceived as cheap.

So that is something to keep in mind. But yeah, do a little bit of market research just to get a feel for what's happening in the markets. Number two, add in like 30% marketing budget into your price point. Honestly, if you want to be in business, you need to spend money on marketing at some point. So build it into your price point.

I would say 30%. Just build it into whatever price you're setting, whether it's for teaching packages, coaching packages, courses. Build in 30% marketing budget, and that's at most. You also want to create a slight stretch yourself price. So something that is going to stretch you.

I mean, obviously in the beginning, if you want just a no-brainer price, you can set a no-brainer price. Which is where you're like, this is so cheap, it's not going to be a huge issue for someone. But that is only in the very beginning when you're trying to build confidence and things like that. 

When you're really trying to build a business, you want to set yourself a stretch yourself price, something that you can stretch yourself into, acclimatized to. Something that's slightly out of your comfort zone. 

Something that you have to rise up to the challenge for. I really do recommend that. I've done that a lot in my business and it has been in great service of me. Because you actually rise up to the challenge when you do that. And then the fourth thing is you want to choose a price that you can energetically back yourself on.

So yes, you want to stretch yourself, but you don't want to be completely out of your comfort zone where you literally just are not confident in that price and you feel like complete fraud. I mean, look, imposter syndrome is real. It doesn't mean it's correct, and it's often in our head. So don't listen to it. If you're feeling like a fraud, it's normally just your brain tricking you.

But you want to ask yourself, can I confidently just get in front of people and pitch this offer and talk about my stuff with this price? How do I feel energetically? Is there confidence or am I completely out of my depth. Because it really does help to have the right energy. 

As I said, energy is really important in your pricing. If you have conviction and confidence in your price, it goes a massive long way, right? But if not, that doesn't mean you should just charge dirt-cheap prices that don't even make business sense.

And then that's what I see a lot with teaching business owners. They set these prices that literally don't make business sense. It like there will be no profit at the end of that after you've spent money on whatever it is that you spend money in your business. Maybe it's paying yourself a salary that you're not going to have cash to grow your business. 

And we need cash to grow the business. Cash is king, right? So you want to set a price that's going to give you at least a three times return on investment. Otherwise, you might as well not be in business, in my opinion. You need the cash flow and without it, your business will die.

So set prices that allow you to make profit. Business costs money sometimes. So even if it's just running your platform every month for, I don't know, $60 a month, whatever. Maybe you spend like a hundred dollars a month on tech to run your online business or $150 on tech. 

Make sure that you're making three times that a month and build prices that are building all of that in. Plus marketing budget to allow you that ability to run Facebook ads if you want to or to spend money on getting on podcasts or whatever it is that you want to do.

So, set a price that builds in business expenses and all of that marketing, tax, running costs, so that you have profit at the end of it so that it can actually fuel you because you started this business. So you could create freedom. If you charge dirt-cheap prices, you're going to trap yourself in the same rhythm and ritual that your job would trap you in, and you don't have to do that. You can pave the way. Your business, your rules. 

So how to pick a new price. There's a few things that I gave you to help you. But the best advice I can give you is just to pick a price. Don't get so hung up on it. Don't get paralyzed about it. Just choose a price and go with it, test it in the market. See what's happening. 

And it's okay for you to price yourself out of the range of people. It's okay for you to not be the cheapest. It's okay for you to charge a premium price for your premium service. If it feels aligned, do it. Always check in with yourself. Does this feel good to me? Does this feel right for me?

Is this a clean energetic exchange? And maybe in the beginning, you want to do a few free things just so you can get that confidence. That's okay, as long as it's feeling right to you. You don't want to get into a space where you're setting really dirt-cheap prices and you're in this resentment space where you're not feeling valued, and it's because you are not valuing yourself, right?

So just pick a price, check in with yourself and see how this feels with you. And then every six months, do you like a little pricing audit. Just to be like, okay, I'm touching base with my current prices. How is it feeling? Is there a misalignment? And maybe you need to raise your price and often you do need to raise your price.

And every year, you should be raising your price because hello inflation is a thing, and if you keep charging the same prices every year, you're going to struggle. So every year you want to be raising those prices. 

Okay, so how to announce your new prices. So it will make you feel scared when you do this, and that's totally fine. It's totally normal. Feel the fear and do it anyway. Just do it because your business requires it, your freedom requires it. So something that is always nice to do is if you plan on increasing your prices, you can do a little light launch around that and sort of tell people. 

In your content, wherever you are posting content, that you are increasing your prices on a certain date and that you can tell people that on this date, these prices are going up. My packages are going up, and that you have a couple of spots open at the current price.

You can make a thing of it. You can build real life urgency. Let people know about your price increase. Say this is what's happening. I'm giving you enough time. If you want to sign in, sign up with this current price, you've got the next two weeks to do it. Thereafter, the new prices will come into action.

 That's a fun thing to do. And it's like a little light launch, build up some urgency around it. Now for the clients who are currently working with you and if you want to increase prices with them too, say if they want to renew, you can wait till the end of your contract with them where they are wanting to renew.

And you can say: Hey, I don't currently have this package at this price anymore. I've changed it to this package and this price point, and I think this will be a really great step in your evolution or in your next step in this journey. And I am also offering a special bonus to you for renewing as well, so you'll get something really valuable, like maybe a one-on-one call or maybe something that's really valuable for them.

You can add in a little extra bonus just to sweeten the deal and make it seem really valuable for them. And that's how you do it. And you just have to be in your boundaries around it, right? Energetically you have to be like, this is my price point and I am not wavering on it. This is my standard and I'm not wavering on it.

And it's like a very strong boundary around it, that you are not wavering, that you aren't fumbling and sort of ah, they try like barter with you or haggle you and you kind of follow suit and then you drop your prices. It's totally fine if you create a new package for someone, but just make sure that the value exchange is in alignment with you.

If you're feeling that misalignment, it is awful. And if they are not willing to work with you at your new price, that is totally okay too. That is fine. Sometimes it's just not possible for people, and that is fine. That's their journey. That's right for them, that's in alignment for them. But you will find people at your new price points because there is a customer for every price point.

And if you aren't finding that, then you want to look at your marketing, your messaging, your branding, and your positioning, and see how you are communicating. Because the way that you communicate your message and who you speak to is really important. You are probably speaking to the wrong person and attracting the wrong person.

And if your language is very disempowered and you're speaking to pain points a lot, you're going to have disempowered people with a lot of pain points coming through. If you want to speak to the more empowered person who's doing well but wants to do better, you're going to find that the empowered person who's doing well and wants to do better will come through to you.

So if you're struggling to find people at your current price, look at your messaging. Who are you talking to and how are you communicating? Now, if you want to be the Prime Mark or the target of your industry and lead with low-ticket offers, do it. Do it all the way, but do it only if it energetically feels expansive to you and it's not from a place of scarcity and fear that people won't pay you more, because that isn't the right energy to be in in your business. It's not an empowered place.

If you want to be the Mango or the Zara of your industry and serve that sort of middle tier option, that middle demographic. Do it if it feels aligned to you, and energetically right for you right now. If you want to be the Louis Vuitton of your industry. Or the Chanell of your industry, do it. 

There are people who will pay a premium service for faster results, for more efficiency. Just to get into that energy of that person they often pay. Just to absorb that person's mindset and way of thinking they will pay. And just to have that experience people will pay, they will pay for that brand.

They will pay for that person who makes them feel seen, heard, understood, and gets them the results that they want. People pay that all the time. Business coaches are charging like $50,000 for packages, one-on-one packages, and people are paying $50,000 for one-on-one packages. That is what exists.

And there are people who'd pay a lot less, and then people pay a lot more. There's a customer for every price, right? So when it comes to pricing, just know that whatever price you choose can and will change. So don't get so hung up on it. Just, just choose a price. Just pick, pick a number, and always check in with yourself to see if there's that resentment, if there's that burnout, if there's that unequal exchange. 

And have the courage to value your work and time. First and foremost, if you value your work and your time and your transformation and what you do for other people, you truly, truly value it. So will other people, and that will come across energetically in your business, in the way that you show up and in your pricing. Okay, so your energy is important and having.

That alignment is going to be really important and always keeping, because that will change. So as your business changes, as things evolve, your prices are going to change and you're always wanting to just keep the tabs on it to check in with that. Am I feeling aligned? Are these prices right? And all of that jazz.

So I hope this has been a helpful A helpful episode to you. I hope this has inspired you just to pick a price and go forward and conquer and just know that there's a person who's going to buy at every price point. So you get to choose who you're trying to serve and who you're trying to help and what you want to do.

It's all up to you, right? I just hope that has inspired you for sure. And just a little permission slip that if you are feeling misaligned energetically with your current prices, that you are allowed to increase them and it is safe for you to increase your prices. It is safe for you to charge for your work.

It is safe for you to be the premium brand, be the Louis Vuitton, whatever it is that you want to be, it is safe for you to have what it is you want. Now, as always, if you want to get into my world and maybe you are new to me. One of the best ways you can is you can download my free niche discovery guide.

This is where I help you discover your niche in three simple steps, and it's a really great place for the beginner who wants to sell courses and grow their online education business and is a little bit uncertain about who they're trying to target, who their ideal student avatar is, what their niche is.

They're maybe not fully in clarity there. So this niche discovery guide is really going to help you take that first step in finding that niche and. Nailing it almost like really getting honing in on that niche that's like really specific, which is really important if you want to make money in your business, getting specific is going to be really important.

So you can grab that niche discovery guide for free underneath, in my show notes or underneath this podcast episode. Otherwise, I hope you have an amazing week and I will chat to you again next week. Much love. 

Thanks so much for listening to today's episode. If you are interested in building your online business, but you have no clue how to choose a niche, then I've just the thing for you. Grab my free niche discovery guide and it will walk you through discovering your niche for your business in three simple steps. This is your first big step to unlock in your business journey, so go ahead and grab that free guide to help you. 

I appreciate you so much, and I can't wait to connect with you in the next episode. In the meantime, go create a business and life you love.