Figuring out what to charge for a product or service can be a source of great stress, and sometimes fear, for entrepreneurs. In this episode, Dan Sullivan explains the mistakes most entrepreneurs make when determining a price and how they should be thinking about it instead.
Here's some of what you'll learn in this episode:
- Why prices are subjective, not objective.
- Why you should see prices through the eyes of your customers and clients.
- How fear of pricing only exists in your own brain and nervous system.
- A sign that you aren’t charging enough.
- The formula to determine what you should be charging.
Don’t mean well: If what you charge is determined by what the competition is doing, you’re taking reference from people who don’t mean you well.
Satisfactory value: To give people satisfactory value for your price, look at what value the client expects to get for the same price in areas outside of what you do.
Okay with no: In order to be confident about your pricing, you have to be okay with receiving a “no” from a potential customer.
Naturally scared: It’s natural to be scared whenever you ask for a price that’s higher than you’ve ever quoted before.
Willing to pay: The value of something is what people are willing to pay for it.