050 Overcoming Pricing Anxiety: How to Set Prices Confidently and Beat the Fear of Rejection
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Unleash your pricing power and conquer the fear of rejection as I guide you through the journey of confident entrepreneurship.
Your worth is inherent, and it is not tied to what you do or provide to other people. You are inherently worthy whether or not you do things or give things to other people. - Regan Bashara
Do you want to gain the inner confidence to set prices without fear of rejection? Are you tired of second-guessing your pricing decisions and allowing the fear of rejection to hold you back? I have the solution that will empower you to achieve the outcome you desire: increased self-assurance in pricing and overcoming the fear of rejection. By implementing this solution, you will be able to set prices confidently and fearlessly, ultimately boosting your business success.
Does this sound familiar? You've been told to lower your prices in order to attract more customers, but instead, you find yourself feeling undervalued and constantly questioning your worth. The pain of not getting the desired results despite compromising your prices can be demoralizing, leaving you stuck in a cycle of fear and uncertainty. It's time to break free from this ineffective action and reclaim your confidence in setting prices that accurately reflect the value you provide.
In this episode, you will be able to:
· Learn how to overcome the fear of rejection and confidently set prices for your products or services.
· Discover strategies to overcome self-worth issues that lead to undercharging and undervaluing your offerings.
· Gain insights into the mental challenges and pricing dramas that entrepreneurs often face, and learn how to navigate them successfully.
· Understand the importance of pricing decisions and how they impact your business's profitability and bottom line.
· Develop a better understanding of your own self-worth and how it influences your pricing decisions.
· Learn practical techniques for determining the direct costs of your products or services and setting prices that ensure profitability.
· Gain confidence in your pricing decisions, allowing you to assertively communicate the value you provide to your customers.
· Discover real-world examples and case studies of entrepreneurs who have overcome their fear of rejection and successfully priced their offerings.
· Unlock the secrets to pricing with confidence, so you can grow your business without feeling like you're leaving money on the table.
· Learn how to effectively communicate your prices to potential customers, overcoming objections and establishing the value of your offerings.
Don't underprice your offers out of fear of rejection. Believe in the value you provide and trust that the right customers will appreciate and invest in it. - Regan Bashara
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00:00:00
Okay, you guys, welcome to another episode of Money Through Ease. I'm your host, Regan Bashara. I'm so excited to be bringing you this topic today. I came up with this idea yesterday. I was on a call with some folks that I am in community with.
00:00:17
They are other entrepreneurs, and it's not even just people in the United States. We have folks coming in every week from the UK and New Zealand, zealand and Australia. And I think that's it, like the states. UK, Australia, New Zealand. Like, the timing that we meet for this call every week just happens to be the perfect time for all three of those time zones.
00:00:40
So we usually have folks from all over the world just kind of chiming in. We work on money mindset, just business owner mindset in general. And I had this thought on our call, and I was like, oh my gosh, write that down. Write that down, like, immediately. And I knew I just had to record a podcast episode about it.
00:01:01
So this is a fresh idea in my mind. I quickly jotted down some notes that I want to share with you and talk about pricing drama. I know so many folks that are entrepreneurs and business owners have so much mental drama about what to charge for their products and services. So we're going to talk about it today. And if this is something you've been avoiding thinking about, well, then that just means this podcast episode is serendipitous for you.
00:01:30
And then at the end, I'm going to tell you about something special and amazing that has to do with what you choose for the price of your offers. So make sure you listen. I was about to say watch. This is not a video podcast. Make sure you listen through the end of the episode.
00:01:52
Like, not the tag at the end, but the end of just me talking. Because I'm going to tell you about a way that I can help you choose the right price for your offers and also choose the right price for your offers that is going to help you meet your business goals faster. So let's dive right in. Pricing drama is what I think of as being unsure, uncertain, not confident about what you are asking people to pay you as a business owner for the products or services that you are selling. So you set a price for a product, you set a price for the service that you provide.
00:02:40
Maybe you actually don't have control over the price. Maybe you work in healthcare. And so a lot of the price for healthcare services is dictated by our insurance companies, which is a whole other topic that we could get into on another day. That's not the purpose of this episode. I'm specifically speaking to the business owners and the entrepreneurs that do have the ability and the agency to determine their own price.
00:03:08
And you can totally choose whatever number you want for whatever it is that you're offering to your clients and customers. You can set the price to $100,000 if you want. You can set the price at $0 if you want. It is completely within your control if it is within your control to set the price at whatever number you pick. And numbers are just neutral, right?
00:03:37
Numbers comes from the system of counting things. So when we talk about the price in the United States specifically, we're talking about how many US dollars or percentages of US. Dollars we're asking somebody to give us in exchange for a product that we made or a service that we're offering, or maybe access to some sort of community or education or teaching or content that we're putting out. So we're just asking for a number. And it doesn't mean anything about whether or not we are overinflating our prices or undercharging or what somebody else can afford, or what's within most people's budgets.
00:04:21
All of those considerations, all of those thoughts are just that. They're thoughts, which means that they're not facts. The fact is, you set a price, you just picked a number. Could be $20, could be $500, could be $3,000. Whatever it is, you picked a number and said, if you would like to have the thing that I'm offering, this is what I will take in exchange for the thing.
00:04:49
We've talked a lot about currency and money and the kind of history of currency and actual dollar bills on this podcast before. So when we're choosing a price, we are just picking a number. However, it often comes with a lot of our background thoughts and beliefs and money mindset that can inform which number we pick, right? Like, you're not just pulling a random number out of your ass. You are picking a number based on what you believe about the value of whatever it is that you're offering.
00:05:27
Whatever you believe about yourself as a capable practitioner or experienced professional or someone who is an expert at making a certain product and all of these things and even beyond that. But all of those things inform what we ask other people to pay us for whatever it is that we have that we're giving away. So let's talk about the reasons why someone would undercharge on their business's offers. And when I say undercharge, I'm not talking about things having an inherent value. There are accountants out there who charge multiple thousands of dollars per month to do the exact same work that I do, that I do not charge multiple thousands of dollars per month to do.
00:06:21
It doesn't mean that my services are less valuable. There is no rule that is universal truth about what my value is for the services that I offer to my clients. But if people are choosing to set a price that they believe is undercharging, this is what I think. The three reasons are that people do this. So they say, I know that this thing is really valuable, but I'm actually going to choose a number that's lower than the value that I think this offer has that would be undercharging.
00:07:03
And here's the three reasons why somebody would undercharge for their offers for their business. Number one is self worth and confidence issues. You doubt your competence. You don't think that you're competent, capable, experienced enough to provide that value, even though you have a number in your head, like, this is worth this amount of value. Whatever it is that I'm offering you, set a price that's lower than that because you're like, I feel like this should be this valuable, but I don't actually believe that.
00:07:41
And so you are doubting your competency or your skills or expertise. You also believe that you're unworthy of being paid more. Now, worth is, once again, not like a universal fact or truth that has a number attached to it. I believe human beings are worthy just because they exist, or they did exist, or they will exist. Every human life is worthy.
00:08:13
So believing that you're unworthy of being paid a certain amount of money is just a thought. It's not a fact that you are unworthy of some amount of money. But showing up to decide on a price for your offer, believing that you're unworthy of that price, could cause you to scooch that price down lower so that it's more in line with whatever worth you think you have to offer to people. But I want you to know that your worth is inherent, and it is not tied to what you do or provide to other people. So let's go ahead and divorce those two concepts.
00:08:55
You are inherently worthy whether or not you do things or give things to other people, period. Another thing with self worth and confidence is this socialization that all of us have received about money and socialization comes in the form usually from media and from the lessons and the messages that we receive through storytelling in media. We have shitty money mindsets, like, overall, as a culture and society that we have received from messages in media, we believe as a whole, not you individually, but most people, I would say, believe that having too much money is problematic. It could mean that you have been manipulating other people. It could mean that you are exploiting somebody else, whether that's a client or a customer or even an employee or a family member having too much money, a lot of people believe that's an indicator that something is wrong, that something is a problem with whatever that person is doing.
00:09:59
That's the socialization and messaging that we've received. If you look at people like Elon Musk and Jeff Bezos, I'm like, what the fuck is that guy's name? They have too much money. According to probably 99% of people, most of us would agree that they have too much money. And why do they have so much money?
00:10:20
It's because they have exploited and underpaid their workers and they have driven up prices and not compensated their people who are creating value in their companies accordingly. So people that have too much money, problematic. But once again, the other socialization and message that we often receive from media about money is that having not enough money means that you're actually just bad at money. You're bad at managing money. And when you believe that you're bad at managing money and the evidence for that belief is that you just don't have enough.
00:10:55
You're living paycheck to paycheck, you're in a lot of debt, whatever it is you make that mean that you're not good with money, you're not good at managing money. And those beliefs actually bleed into how much you ask when you're determining the price for an offer, a product or a service. Your beliefs about how much money you don't have coming in, how whatever money you have coming in is not enough. Those beliefs bleed into the decisions that you make about what to ask for when you are determining the pricing for your offers. So this socialization we've all received on the whole as a society about money and the shitty money mindset that we all have has led to these self worth and confidence issues that cause some folks to decide to just undercharge on their pricing and their offers.
00:11:48
Number two reason why somebody would undercharge is fear of rejection. Do you worry that you are going to be driving potential customers away if you raise your prices? Do you shy away from that number in your mind that you know you would really rather be making, but you're worried that somebody's going to see that and be like, oh, I can't afford that. I'm not going to work with you. I'm not going to give you any money if that's how much money you're asking for, raise your hand.
00:12:14
I've got one hand raised. Do you fear that you're going to have to deal with people pushing back about your prices? Do you fear that people are going to want to negotiate with you? So in order to avoid that negotiation and that pushback and having to argue with somebody about how much you are worth there's, that worth, again, how much value you're providing in a project, a product, not a project, or in your services, do you fear that people are going to argue with you about that and you want to avoid that confrontation? So you just lower your prices, hoping that nobody will bring it up, that people will just agree and accept that they're not going to try to swindle you out of that number.
00:13:02
We don't want to be rejected. Just period, point blank, end of story. Nobody wants to be rejected. It doesn't fucking feel good. So we underprice our offers in our businesses to avoid that feeling, that shitty feeling that somebody is going to reject you because of whatever number you're asking for.
00:13:24
We end up, of course, then rejecting ourselves ahead of time by saying, I'm going to undercharge, and I reject that, I even think to ask for however much money I would like to be asking for. And that's just so that I can avoid rejection, I can avoid arguments and people trying to negotiate my prices, and I don't want to drive people away. So this fear of rejection is the second reason why somebody might be undercharging. And the third reason that I believe people are undercharging is because they compare themselves to others too much. Are you doing too much market research?
00:14:03
This may not be a good thing. While I do believe that you should do some amount of research about what are the people in your industry are doing, how are they pricing their offers, how are they structuring their business, what are they providing in terms of value in whatever services or products they are offering? But if you're doing too much research, it could be because you're comparing yourself to other people. I'm all about having more data, and I've always told you all that, like, when it comes to bookkeeping and financial record keeping, the more data we have, the better. I'd rather have too much data than not enough.
00:14:38
Right. But when it comes to determining a price for your offer, it might not be a good idea to have too much data. What point are you looking to just undercut all of your competition? I think that no matter what price you pick, there will always be somebody charging more and there will always be somebody charging less than what you charge for your thing. Unless you're charging $0, there might be other people doing that for free.
00:15:10
There's probably not people that are paying other people to buy their product. So unless you're charging $0, there's probably somebody charging less than you. There's always going to be somebody charging more than you. So why do you have to be the cheapest option? So I talked about being on this kind of community call with other entrepreneurs.
00:15:35
I have it every Sunday with a group of folks. And this came up on a call many months ago. I was speaking to somebody who's a lawyer, and every week we meet and we pretty much always talk about money when it comes to business stuff. And they told me in a conversation, they were just kind of like explaining a story, blah, blah, blah. And they said, well, you know, because I have to be the cheapest option.
00:16:01
And I was like, Whoa, whoa, whoa, whoa, whoa. What? Are you serious right now? Those words just came out of your mouth. You have to be the cheapest option.
00:16:10
And they were like, what? Did I say that? I'm like yes. You literally just said, I have to be the cheapest option. I have to undercut everybody else in order to get any clients.
00:16:22
And I was like, Holy shit, this is blowing my mind right now.
00:16:28
If you believe that you have to be the cheapest option, why is that? If you believe if you're thinking to yourself right now, well, if I'm not the cheapest option, then there's going to be people that are looking for the cheaper option, and so they're going to pass me by. So this goes back to that issue, that reason of self worth and confidence and rejection and impostor syndrome. Like believing that somehow you've tricked people into thinking that you're somehow an expert that's providing value when you're really not. You don't know what you're doing, blah, blah, blah.
00:17:02
And then that socialization about having too much money or not having enough money and being bad with money. If you believe I have to be the cheapest option or people are going to pass me over, that could be the reason that you're comparing yourself to other people and therefore undercharging and using other people as the reason to undercharge. And nobody wants that responsibility. That's your decision to make. It's not anybody else telling you that you have to do it.
00:17:32
You're the one seeking out other data. You're the one seeking out what other people are doing to try to undercut them. And that's on you. Believing that someone else is more successful than you. That's why they're allowed to charge more and you can't charge as much as them.
00:17:52
This is another reason that we shouldn't be comparing ourselves to other people too much, because when we believe, oh, well, it's okay for them to charge more than me because they're actually just more successful. They're actually just more educated. They have a lot more experience than me. They're a man and I'm a woman. And so people naturally gravitate towards men in the financial field because we all believe that men are just somehow naturally better at money than women are.
00:18:18
All that bullshit, right? You're using that as an excuse to charge less when picking a price is literally just picking a number. And this is what I mean when I say that all of this comes back to all of the things that you believe about yourself and all the money mindset that you have coming in to inform the decision that you make about what to charge for your offer. So those are the three reasons why I think people undercharge on their business offers. Number one is self worth and confidence issues.
00:18:50
Number two is that fear of rejection. And number three is comparing yourself to other people doing too much market research. You don't need that much data. You really just need to pick a number that's as simple as it is. So here are the three truths that I believe about pricing.
00:19:07
Once again, I'm not like an all omnipotent, all knowing being. These aren't like universal truths, but this is what I believe about pricing. Number one, truth that I believe about pricing is value means something different for everybody. When we're talking about worth. I believe that everybody is inherently worthy, pretty much of life, health care, food, housing, clothing, peace, relaxation, whatever.
00:19:38
I believe that everybody is worthy of respect and dignity. Value is different though. Value means something different for everybody. It's subjective. You may think that something that you're throwing away in the trash has no value, but I want to tell you, I've recently started Junk Journaling.
00:19:56
And literally things I used to throw away and that other people right now are throwing away have value because I use it for one of my creative hobbies. Value is subjective. It is based on your individual experiences, needs, desires, and of course, budget, right? If you have this much money coming in, you can either spend that much money or spend more of it on credit and then you end up owing, blah, blah, blah. Whatever.
00:20:26
Value is based on your individual needs, experiences, desires, budget. Even if somebody believes that what you're offering is valuable, they may still decide that they can't afford it within their current budget. And let's go back to episode 41 of Money Through Ease where I talked about the concept of you can either make it work or you can make more money. So refer back to that episode for that concept. But if somebody's like, well, I can't afford your thing right now, it's not within my budget, they have a choice.
00:20:57
They can decide just not to spend the money and not to buy the thing that you're offering. They can either figure out a way to make it work by changing their budget up, or they can just decide to go make more money so that they can have the money to spend on your thing that you're offering. And that's totally up to them, right? They have that agency to go make that decision for themselves. They can just decide they don't want to spend that money with you.
00:21:23
Even if they agree with you that that thing has value, that your offer is valuable, they can say, yeah, totally, I think you've got this priced correctly. I see the value. I recognize that this value and offer are both aligned. I agree with that. But I still don't want to pay money for it right now, and that is okay.
00:21:42
Value is subjective, meaning that your offer, your product, your service for your business is not valuable based on whether someone believes it is. So let me repeat that. Value is subjective, meaning that your offer isn't valuable whether or not someone believes it is. So you get to decide what the value of your offer is and price accordingly. You can overprice it.
00:22:12
You can think it only has so much value and still decide to jack up the price. You have that power. We live in a capitalist society. Anybody can pretty much do anything they want. When it comes to pricing, for the most part, there are some industry regulations.
00:22:24
But whatever value is subjective, nobody else can tell you your offer is not valuable. And then that's just the truth, right? Y'all, the ruba was about to terrorize me again. All right, number two, truth about pricing. If you're going to be mean to yourself, no matter the price, you might as well make more fucking money.
00:22:46
Okay? This idea came to me when I was in that community call yesterday with other entrepreneurs. We were talking about pricing, and somebody was talking about how they have a lot of drama about how much to charge for their services. They teach, like, music lessons to kids. They thought that people, these parents, would not hire them if they were, quote unquote, overcharging again.
00:23:08
That's subjective. So they were mad that they had made the decision to cut their prices in order to appeal to more people. Let me repeat that. They were mad at themselves because they decided to undercut their prices. To undercharge in order to appeal to more people.
00:23:32
Do you see how cuckoo this sounds like? They were being mean to themselves and offering a lower price for their services because they were afraid that if they overcharged, they were being mean to themselves. So let's say that their prices for music lessons were $100 a week, and they decided to only charge $80 a week because they were like, well, some people don't want to pay $100, so I have to charge 80 so that I can appeal to those people. But now I'm mad at myself that I am undercutting and undercharging for my services. But they were going to be mean to themselves also if they raised their prices to $120 a week.
00:24:21
Either way, you're being mean to yourself about what you decided to do. No one is like forcing you to set a certain price for your offer. No one is threatening violence, hopefully, about you choosing a price, just choosing a number. But if you're going to lower your prices to appeal to people who don't want to pay $100 for your services, and then you're going to be like, man, I really wish that I hadn't lowered my prices just to appeal to these people who don't want to pay my prices. But then you're also going to be mean to yourself if you decide to raise your price to $120 a week.
00:25:03
And you're going to be like, nobody's going to want to pay that. No one sees the value in that. No one thinks that $120 a week is worth music lessons for their kid. So you're being mean to yourself either way, but you decided that undercharging was the better option for some reason. And to this I say, if you're going to be mean to yourself no matter what your fucking prices are, then go with the option where you make more money.
00:25:29
Like, if you're going to shit on yourself for lowering your price to appease people, but you're doing that because you don't want to be mean to yourself about raising your prices and being like, there's no way I can raise my prices. Nobody's going to pay that. That my services aren't worth that much. There's not that much value in my services. You're being mean to yourself.
00:25:50
Whether or not you over, undercharge, quote, unquote, also subjective. Why would you not pick the option where you'd make more money? This just, like, totally blew my mind when we were on this call having this conversation, and I was like, OOH, write that down. Write that down. I need to make a podcast episode about this because this is brilliant.
00:26:10
Why, if you're worried about being mean to yourself, would you choose the lower price? If you're going to be mean to yourself anyways, pick the fucking higher price. Make some more goddamn money. Okay, I'm going to get off my soapbox. That was the second truth about pricing.
00:26:27
If you're going to be mean to yourself, over or undercharging, pick the option where you make more fucking money. Number three. The truth about pricing. Number three is profitability does matter. Knowing whether or not you have direct costs related to your offer is important.
00:26:43
If you make a product that you sell, you need to consider the price of the supplies and materials needed to create that product. That is the direct cost of selling that product. If you have to pay for subscriptions or software that you use directly in the service that you provide to your clients, you need to consider that when it comes to what price you're picking, what number you're picking to offer. And then I see people saying, to do this, take the total cost of your overhead and divide it by the number of clients and then work that into the price of your offer. No.
00:27:21
Your offer price can be decided based on the value that you're offering with whatever your overhead costs are. But why would you divide it by the current number of clients? And then if you get more clients, does that lower the price for everybody? No. So it doesn't make sense to just divide your overhead into your number of clients.
00:27:45
That literally does not make mathematical sense. But anyways, profitability does matter when it comes to pricing. That is a truth. Because I don't know about you, but I'm in a business to make a profit. I am a for profit business.
00:28:00
If you're not, that's cool. But I'm here to make some money. I have bills to pay, like living costs money. I'm going to try to make some money. So we need to consider if you have an offer that you're wondering what the heck to price it at, you need to consider the direct costs, any overhead that you have.
00:28:20
But it doesn't mean that you should just take all of your overhead. And by that I mean, like, utilities, rent, advertising costs, phone bill, internet bill, et cetera, et cetera. We don't need to take that number. And just divide it by the number of clients you have. That's stupid, because when you get more clients, that number would go down because you've increased how many clients you have, which decreases the number or the division of your overhead anyways.
00:28:47
Okay, so that's number three. Profitability does matter. So listen to me. This is the part where I wanted you to listen to the end. If you are considering changing your pricing or introducing something new in your business and you're not sure what price point is appropriate, I want you to get on my email list, visit the show notes for this episode or any episode, and go to my website.
00:29:11
Download chaos to calm. That is your reward for signing up for my email list. It's my free receipt. Organization guide. Get your shit together for 2023 using chaos to calm I want you to get on my email list because I am developing an Entrepreneurial Bookkeeping course that will be released in 2024, and that will include content about how to choose a price for a current offer.
00:29:36
Maybe you want to change the price of a current offer or choosing the price for a new offer that you want to come up with. So in Mind The Gap, which is my Entrepreneurial Bookkeeping Course, there will be a community aspect to this work. So just like I've talked about in this episode, being in community with other entrepreneurs is amazing. I recommend it. You should not be doing this alone.
00:30:01
I'm creating that community for you. So come be a part of mind the gap. And the reason that I'm telling you about this early, it is not being released to the public until 2024. But I'm telling you about this now early because I want you to come in and test drive this course for me. I want your feedback.
00:30:23
I'm making something for you. I'd love to know your thoughts. You get the opportunity to request content specific to what you struggle with in your business. However, beta testing so test driving behind The Gap. Beta testing is only being made available to my current clients.
00:30:42
That means that you need to invest in being my bookkeeping client, booking a training on QuickBooks Online with me, signing up for a fourth quarter fling, which you can do through Christmas of 2023. I'm taking the last week off, y'all. Or you can hire me to do your catch up accounting work. If you got a big accounting project that needs to be caught up, you can hire me for that. Each one of these offers comes at a different price point.
00:31:07
Speaking of pricing, there is something that is accessible to you and your business, I promise. And the benefit is you get to beta test Mind The Gap at over 60% off that price, that discount will never be offered again for Mind The Gap, just FYI. And that ends at the end of 2023. So right now, visit the show notes. Click the link to get on a consultation with me.
00:31:32
Let's talk about which of these services that I just mentioned are right for your business. And then you can receive your exclusive invitation. You'll get to see Mind the Gap first. You'll get to be on the ground floor of that community that I'm building. I can't wait to show you what I've been working on.
00:31:53
Thanks so much for listening. Make sure to leave a rating or review and share this podcast with someone who desperately needs to raise their prices. I'll talk to you next week.