Category: Coaching

In 2020 Day 28: Helping Healers determine what to charge for their offerings, I discussed how to determine what to charge for products and services. I presented a couple of equations:

Cost of Product/Service < Price of Product/Service < Price Customer Will Pay

Price Customer Will Pay < Customer’s Perceived Value

I also noted that it can be difficult to determine the customer’s perceived value of a healer’s offering. If measured by the benefit to the customer, the value could be unbounded in many cases. However, often customers use the price of similar offerings to create a perceived value without considering the actual value to the customer. For instance, if a customer can find multiple places offering $50 one-hour massages, then they may come to perceive the value of a one-hour massage at $50.

A different way to determine a customer’s perceived value is to give customers a coupon for any one of a group of products and/or services and see which one they pick. With enough coupons, this will give you relative values of your products and/or services.

A third way is to just ask your customers how much they value your offerings. Understand the non-monetary value in as much detail as possible. From this you may be able to find competing offerings that would give the customer the same non-monetary values.

If your offering requires your customer to commit a certain amount of their time, then you need to factor in how much your customer values their time. Imagine a customer who makes $100/hr after taxes. Then they are already spending $100 of their time for a one-hour massage.  Whether they consider this consciously or not, these customers will normally be less price sensitive than someone who values their time at only $25/hr after taxes. This is not just a factor of the amount of disposable income each person has. It is related to how much they value their time.

The perceived scarcity of your offering will greatly affect its perceived value. If your offering is seen as a commodity, then it will have a value similar to that commodity. If your offering is seen as one-of-a-kind, then its value is determined by your offering price and the demand from customers who can afford your price.

This is post number 4 of a series of posts going through 2020 Day 21: Surfing Universes – Life Coach – 60 Needs that Healers Have. I’m focusing this series on individual healers serving other individuals.

In 2020 Day 26: Helping Healers identify products and services to offer I offered some questions that you can ask yourself in order to brainstorm and narrow down the products and services you wish to offer to your desired target market. In this post, I’d like to discuss how to determine a price to charge for your products and services.

For a sustainable business, the price you charge for a product or services needs to be greater than the cost to the business and less than the amount that the customer is willing to pay. The amount the customer is willing to pay is different than the value to the customer. The customer may not even be aware of the actually value of the product or service. In fact, it may have no value or infinite value, and both the healer and client may be unaware of the true value. What does matter somewhat is the customer’s perceived value of the product or service in the moment that they commit to purchase the product or service.

Cost of Product/Service < Price of Product/Service < Price Customer Will Pay

Price Customer Will Pay < Customer’s Perceived Value

While it is difficult to determine the value of a product or service to a customer, especially for those in a healing profession, it is not difficult to determine the customer’s perceived value. This can be done easily by setting different prices for a product or service and seeing how many people pay that price. If you want to geek-out on this, you can calculate and graph the price elasticity of demand for each of your products and services. I would encourage you to have an intuitive feel for how changes in price affect the demand for your offerings. This will give you information either about your customer’s perceived value of your products/services or their ability to pay.

Price Customer Will Pay < Customer’s Ability to Pay

It’s good to know which of these, your customer’s perceived value or their ability to pay, is more of a factor in limiting the price your customer will pay. You can gain information on this by offering a sliding scale along with trying different top prices. You can also gain information on this through adopting a “gift” price determined by the customer.

For the minimum price to charge, you must know the full cost of your product/service. If it’s a product, it will have a Cost-Of-Goods-Sold (COGS) amount which includes the total per-item cost of the product. You will also have the overhead for you business which includes all of the fixed costs that don’t directly depend on the amount of products/services you sell. Advertising is best considered as a separate cost. Ideally, you would have focused advertising and track your advertising costs for each product/service.  Then you can more easily calculate your Advertising Cost of Sales (ACoS) for each product/service. For services, the COGS should include the total costs of the employees, including yourself, who are providing the services. Your per item Profit will then be your Price charged minus the COGS and ACoS.

Profit = Sales of Product/Service – COGS – ACoS

This is post number 3 of a series of posts going through 2020 Day 21: Surfing Universes – Life Coach – 60 Needs that Healers Have. I’m focusing this series on individual healers serving other individuals.

Determining the products and services you offer is an important step in developing a successful healing practice. This step should be done immediately after determining your desired target market. You may revisit your desired target market after completing this step.

Below are some questions to help you brainstorm and narrow down your potential products and services. Writing (or typing) the answers down will help you gain clarity.

1. What are the needs of my desired target market? What challenges do they have? What products or services are they currently paying for? What products or services would address their needs or challenges?
2. What are my unique strengths? What do my friends say are my unique strengths (ask them)? What would my friends pay me for (ask them)? What products or services have I purchased for myself or others that I could offer to others?
3. What products or services have I made or offered in the past? What products or services am I qualified to make or offer currently? What products or services would I like to be qualified to make or offer in the future?
4. What products or services do I wish that someone offered to me earlier in my life? What impact would this have had on my life?
5. What products or services would, by providing these to my desired target market, make the world a better place? How would this occur?
6. What products or services would, by offering them, give me a sense of meaning, purpose, and connection? Why?
7. What products or services can I see myself most easily providing? What products or services do I feel would be a challenge for me to provide? Why?
8. If I provided just one product or service, what would it be? Why?
9. Which products or services would I be willing to offer for free to my friends and family? Which would I be willing to offer for free to anyone on a limited basis? Which would I be willing to offer at half-price to anyone? Which would I only offer if I were paid full price? Why?
10. Which products or services do I feel I would be most successful in offering? Why?