When I started my women’s leadership platform in July 2012, my events were free.
My business today was a by-product of something else. I launched a documentary production company and the monthly meetups were a way to build the project pipeline. The first event was July 2012 at “The Bubble Lounge” in Tribeca and totally free.
Eight women showed up.
Then 40.
Then 300.
A major luxury store saw photos of my events on social media, saw beautiful, accomplished women, and offered to host my next 3 events. They cleared $12,000 dollars in two hours from all the purchases. This was the first that I cottoned on to the value I brought.
Photography cost money.
Marketing daily cost money.
More importantly, I was putting impactful panel discussions together. My TIME cost money.
That was ten years ago and I forgive myself. I was still collecting a regular paycheck from being a news anchor. I didn’t know squat about running a business.
I didn’t what I didn’t know.
Now I do and as I work with clients launching their own advisories or consultancies, I get the question: “How do I charge for services I used to give away for free?”
The first thing I will say is this: What I charge today is commensurate with the worthiness journey I have been on. Until I did the ‘inner work,’ I couldn’t align with (or demand) a higher fee. I can work with you on this.
The second piece of advice is: Have scripts tucked away in your back pocket to gracefully share “My prices are changing.” Most don’t have this language ready.
Think about Netflix. The movie e-tailer shares months in advance “prices are going up to x.” Nobody revolts. Nobody quits their service (Okay maybe some do).
As a small business, you have the ability do the same. Here are steps to take:
UNDERSTANDING YOUR VALUE
The best way to start asking for a fee for a service that you were giving away for free is to first consider the value that your service provides to your customers.
- Consider how much time and effort you put into providing the service.
- Consider the benefits it provides to your clients. My C-level clients could spend 3 YEARS spinning their wheels trying to build a personal brand OR they could do a one day intensive with me, and get the hacks.
- Consider how much you have invested in yourself. Did you get an advanced degree? Did you invest in training? I invest a large amount in continued learning and monthly coaching. It makes me a better advisor to my clients.
- Look at what your competition is charging for the same service, and use this to benchmark how you price your own. You might have to experiment a bit to find the perfect price for you.
Once you have a clear understanding of the value of your service, you can start to communicate this to your customers.
HOW TO COMMUNICATE
- Update your website or social media channels with information about your service and its benefits
- Reaching out to customers directly to explain the changes.
- SCRIPTS
- Say to the person that is receiving the free service:
- “I wanted to let you know that after today I will have to charge you for the service you are now enjoying for free. The price will be (x) per service.”
- When they ask why you have to start charging tell them:
- “My circumstances have changed and I have to cover my expenses.” Do not elaborate any more than this even if they try to start a conversation.
- OPTIONS
- Send a good notice of 30 days to all your users/customers about the new pricing of services.
- Stand up for the value of what you’re offering, but at the same time, pay attention to how the market responds.
- Be clear about what your service includes and what the costs are. This will help to avoid confusion from your clients.
- Schedule when it happens, let your existing customers know, possibly do a time limited promotion to get people on your mailing list, then change the price on the scheduled date.
- It’s also important to be understanding and flexible when it comes to customers who may not be able to afford the new fee. You can extend a discount for their first three months to ‘valued customers.’
- Your thought leadership is something you can offer for free on Youtube and Twitter. Direct folks to this. I give away a TON of content on social media for free. Consider a paid up leveling. Some create ‘paid newsletter subscriptions’ on Substack.
- SCRIPT “Thanks for being one of our earliest customers. I offer a paid newsletter subscription that you may be interested in. Upgrade now for only $9/month. If you decide to stay on the free plan, we only ask that you refer us to someone else or compete this short survey: (link to survey or referral program)”
- You want these users to be doing something for you, and chances are good they really like your service and are willing to do a little legwork to help you out and stay free, or maybe even pay for it if you can convince them that the upgrade is worth it. Don’t make it a sob story. It’s all about what the customer needs and how you’re solving their problems with the new pricing model. Show them.
- When communicating the changes to your customers, be honest about the reasons for the change and provide clear instructions on how they can continue to access the service and how they can pay for it. This is where most of my clients get tripped up. I work with them on clear packaging and pricing tiers.
- Expand on the service and charge only for the expanded offer. Offer something more than the usual free service. For example, if you’ve been offering free email support, then create a new premium package where you offer 24/7 Voxer support at $_____ a month. What does your customer value? Things that save them time, money, peace of mind
- Customers pay for value. Show them the value, and they will pay.
- Free trial. Place a time limit on the service and have users signed up placed onto the paid service scheme upon the end of the trial period. Human nature puts a much higher value on something they have than something they want. Cable companies do this all the time with 1-3 months of premium channels free. Why? Subscribers would not pay for the premium channels, but at the end of the free period, they feel entitled and will pay to keep them.
LOSING CLIENTS
- You should be prepared to lose some clients. Last year, I changed my business model and pricing. Guess what? I lost many members. But that’s okay because I was making a quantum leap in the level of client I planned to work with and how much I would charge. It would be an entirely different client persona.
- Some will cancel the service and then come back to you. Others will decide they didn’t need the service but just wanted something free.
- Some will look for another vendor.
- Some will stay with you. Be willing to listen to their concerns and do what you can to address them.
While customer satisfaction is key to the success of my business, I also was tired of being a “broke business woman” given the amount of work I was putting in. As my inner self worth went up, so did my prices.
FREE VS PAID
“If you are good at something never do it for free.” -The Joker
STEP 2 Take stock of your core values. Build a vision and strategy around it.
I interviewed Lisa Druxman, CEO of Fit4Mom. Each week, when she sits down to schedule her time, she takes stock of her values, creates a vision around it, creates a strategy around it—then schedules her week.
I’m creating my vision board for the rest of 2023, 2024. Want to create yours and share it? Join me July 29th.
STEP 3 Think critically about ‘who you need to become’
The worthy inquiry then becomes: “Who do you have to BE” or “Who do you have to become?” in order to be the person who books this block of time and follows through with it.
There needs to be a motivating factor.
Here is what I do to think daily about “The Who I Need to Become”
5 journal prompts
- Where are you right now?
- What are your wins for the last 90 days
- What are the wins you want for the next 90 days
- What do you want in the next year?
- What do you want in the next 3-5 years?
These are priming questions. The answers to them live in the front of my notebook. I review them before I start journaling. It helps to “prime” my brain, as Dr. Ben Hardy indicates. Then I start to journal from the perspective of this future self.
_____________
I also have a journal practice at night, because this is when I review my day. Sometimes I feel like I did nothing. I was unproductive. Its not until I sit down to write all the things I did, that I realize, “Wow I actually did a lot!” It also generates new ideas for the next day. It helps me plan and prioritize my next day. More on this in a later post.
