14. Pricing strategies that actually work

If setting prices for your creative work makes you feel unsure, anxious, or like you're constantly second-guessing yourself — you're not alone. And if you've ever found yourself bouncing between prices, feeling resentful of clients, or apologizing for your rates... this episode is for you.

Listen to hear more about:

• Why "charge what you're worth" is flawed advice (and what to consider instead)
• The pricing sweet spot: finding the balance between your "drama number" and your "resentment number"
• Why no price point is inherently "cheap" or "expensive"
• How to commit to your pricing decisions with confidence 

You'll walk away with a whole new relationship to pricing — not as a reflection of your worth, but as a strategic decision that allows both you and your clients to thrive.

Transcript

Hey friends. Welcome to Liberatory Business. I'm your host, Simone Seol. Thank you so much for listening today. Let's talk about pricing. Something that can kind of fuck you up if you don't have principles and practices for setting a price that feels good to you and actually works for your business.

So let's talk about that. I want this episode to be a sort of foundational lesson on prices because there's actually so much nuance that can go into determining pricing decisions. There's more aspects of this that I want to speak to today and speak to in the future. 

But today's episode is going to be targeted to those who are maybe in earlier stages of their business where every pricing decision feels like a big dilemma and it feels really loaded and you don't know how to get it right, or if you did settle on a price, you don't quite yet have the confidence to sell it confidently. If that sounds like you, this is for you as well. And even some seasoned entrepreneurs can get into a wonky space when it comes to thinking about price 'cause it involves money.

So let's get right into it. Here's what I'm going to cover:

1. I'm going to deconstruct the idea of the thing that is repeated so often, which is "charge what you're worth." I don't believe in that and I'm gonna tell you why.
2. I'm going to teach you my own process that I teach my clients for determining what the price should be.
3. I'm gonna share about a really important mindset piece that you need to consider when you think about your price and communicate its value.
4. And lastly, I'm gonna tell you how to deal with situations where you keep losing confidence in your pricing and you feel tempted to go back and forth. You raise it sometimes, you drop it sometimes, and it's all over the place. And like, what do you do? How to deal with that.

Principle 1: "Charge What You're Worth" Deconstructed

Let's get started. The first principle, the thing that everybody says, "just charge what you're worth." Let's talk about what value means relative to the price.

The whole "charge what you're worth" thing has an important grain of truth in it, which is that many people do undercharge and it's important to see what you're doing as valuable, and it's important to see your time or skills or resources or whatever went into creating your offer and delivering it as valuable and your price does need to reflect that.

But here's the problem with this whole "charge what you're worth" frame: I believe that the value of all creative work, any and all creative work is actually infinite. Think about it. Let's say you are a logo designer. You then design a logo for a company and it was just like some hours of your time and expertise going into that logo, but that design might become the visual identity for a company that ends up growing into something really big.

The website that you help someone build, 'cause you're a website designer, might be where someone discovers information that changes the entire trajectory of their lives. You might be a photographer and one photo that you take might become a family treasure for generations. What is the value of that? How do you calculate the value of things like that?

There are creators I follow on social media who deliver all their content for free, like on YouTube, Instagram, whatever. And there are people whose work has legitimately changed my life. And they gave it all away for free, or at least free to me. Actually, I hear this all the time from people too. People tell me all the time that my podcast episodes, my social media, has been worth more than all the paid courses they've paid for in the past over the years.

And so this is just proof that price is actually not a reflection of value because all value of all creative work is infinity. Now, of course, that doesn't mean you shouldn't pay for creative work. And that doesn't mean you shouldn't be paid for creative work. I love being paid for my creative work and I love paying creators. However, it's the difference between thinking that your price is your value versus thinking that your price is a strategic decision you make to make your business work, but the value of what you provide is actually infinite. That is a big difference, and I want you to be grounded in the knowledge that everything you do has infinite value in all the ways that you can't even know.

Principle 2: Finding Your Pricing Sweet Spot

Now let's move on to the second principle I wanna share with you about how to find your pricing sweet spot. So here's the operating principle. It's actually really simple: charge lower than what gives your brain drama and higher than your resentment number.

I am gonna say that again in a different way. Charge the amount that you can present that's low enough that you can present it without always fighting internal resistance and doubt, which is still above the number where if you were to dip below that you'd start to feel resentful.

Here's why it's important to charge an amount that is lower than what's going to give your brain a ton of drama: there's nothing more difficult than trying to believe in the value of your offer, trying to convince yourself that your offer is worth the price and trying to believe that people can pay it and still be selling at that price at the same time. That's a recipe for a lot of pain and inefficiency.

The only way you can be successful in selling something consistently at a certain price point is if you have fundamental confidence about the price. Look, we all have moments of doubt, right? That's completely normal. But there's a huge difference between occasionally wondering, "oh, man, is this good enough? I don't know. I'm having some comparisonitis" - the occasional bout of insecurities is totally normal - and it's different from a deep persistent insecurity about the value of what you're offering.

Think about it this way. When potential clients or customers come to you, they of course have doubts. That's why they haven't bought yet. But both of you can't be fundamentally insecure about the value of your work at the same time. One of you needs to be the anchor of confidence, and that person has to be you. You can't be wrestling with core doubts about whether your price is justified. You have to have a price where it feels relatively easy for you to say it out loud and to charge it, and you don't have to constantly be going to therapy to be able to own your price.

Here's where it gets interesting though. Sometimes you do need to stretch yourself a little bit. Your comfort zone with pricing isn't necessarily a fixed thing. Sometimes setting a price that feels slightly uncomfortable, not like panic inducing, but just a gentle stretch can actually pull up your confidence to match it and it can make your system up level to match that new energetic frequency. It's kind of like you can price for the business owner that you're becoming, not the one you've been. That often works really beautifully, especially if you've been undercharging, especially if you're used to undervaluing yourself and overgiving.

But the key is this, whether you're pricing at your current comfort level or deciding to stretch a little bit, you have to be able to stand behind that price without constantly doubting and questioning yourself, because the mental bandwidth that you save from not constantly having to validate your worth to yourself - you're gonna free up so much mental bandwidth, and guess what? You can redirect it to actually delivering amazing work.

You've gotta pick a number where when you say it to yourself, it's not like, "okay, I'm trying to believe that I'm worthy of this price. I'm trying to believe that this is okay." It has got to be a number where you're like, "oh, for this number, for what my customers get out of it - the value is so in their favor. It's an easy decision. I can state this price with total confidence." That's how you wanna be.

And then at the same time, the number can't be so low where you're like, "wow, it would actually make me feel taken advantage of if I charge lower than this. My time and my expertise, my creativity, whatever is actually worth more than that." What is that number where if it dips below that you would actually start to feel resentful? So that's your resentment number.

And here's the thing, when I was just starting my practice, starting my business, you know what my no drama number was? My no drama number was $0. $0 is where I felt the most comfortable helping people because I had no experience, no testimonials, and no real evidence that my work could help others except for what was inside my mind. But zero, while it was my no drama number, wasn't my resentment number because anytime someone trusted me with their time to help them, I was honored. I was thrilled.

Remember, this was the very beginning of me starting this work, and I was like, "wow, someone wants me to help them feel better. They trust me with that. They trust that my skills might help. That's amazing. Of course, I'll help you." Right? So I worked for free for a long while, but here's the thing, I still felt like I got paid. What I got paid with wasn't money. It was the opportunity to build my skills and my confidence and sometimes testimonials, and so my right price at that time was $0. And that did not create resentment.

You might be in a similar stage and I want you to know that's totally okay. It doesn't mean you're undervaluing yourself by not charging or charging something low, if you are in the stage of building your own skills and confidence. And if getting someone's trust so that you can demonstrate your skills and gain confidence feels like a fair exchange, then it's a fair exchange. It's a great place to start and know that at some point your no drama number, your resentment number is going to change. It absolutely has changed for me many times over the years.

So I recommend to all creative entrepreneurs who are building their businesses for the first time, if you're in the earlier stages, to work with people at accessible rates until your resentment number rises. At some point you're gonna get to a place where, "dude, I know my work is good. I have so much experience. I know my time is valuable and charging less than a certain amount is gonna make me feel like I'm being exploited." Don't try to artificially charge high numbers before you have that confidence.

So my resentment number, let's say I'm just making this up as an example, is now $500 for a design project. And I can't go below that because I'm gonna feel bad. So I'm charging 500 and that number feels really solid to me. And if anyone were to question your price, you don't second guess yourself, right? You're not gonna be like, "oh yeah, maybe they're right. Maybe I should charge 300." Instead, you just say to yourself, "you know what? I know what my work is worth. I know my expertise. I know what you get from working with me. It's worth it. And if you don't see that, that's okay. Maybe I'm not for you."

And once again, you wanna aspire to that confidence before you aspire to charge a higher number just because it feels like what other people are doing. People are telling me, "charge what you're worth," da da da. But no, it works so much better when it's backed up by confidence that's based on your actual experience and the value that you know you've already demonstrated to clients. There's nothing wrong if your confidence level translates to a lower price for now. It's not always gonna be that way. The key is to be honest with yourself and not be in a hurry to charge more.

Now, here's the counterpart to that where I'm about to say something that feels like the opposite of what I just said, which is that sometimes working with too many low paying clients can actually slow your growth. Especially if you are doing that because you feel insecure or you feel like you need to prove yourself, or if it comes from a reason that feels something other than empowering and you don't wanna just be going through the motions because you don't believe that you deserve more.

So that's some nuance to the general principle, which I still believe in. It's: lower than your drama number and higher than your resentment number. That's the sweet spot where you can start with integrity because you're coming from genuine, substantive confidence in what you're delivering. And you also know that you're being compensated fairly. And let this be, again, a flexible thing where as your confidence grows, as your skills grow, you can incrementally raise your prices. That I feel like that's the most ethical and efficient way to do it.

Principle 3: Mindset Around Pricing

Alright, let's get into the third principle, which is about the mindset of thinking about money and pricing. I wanna warn you against thinking of offerings as either "cheap" or "expensive" in relation to the price. I want you to know there's no number that is inherently expensive or inherently cheap. There's only expensive relative to perceived value or cheap relative to perceived value.

If I told you a number, let's say $50,000, okay? Without any context, you might be like "$50,000 sounds like a lot of money." But what if I told you that the $50,000 was for a beachfront house in Hawaii, you'd be like, "what? What the fuck? Why is that so cheap?" Right? Suddenly, your perception of the number went from expensive to cheap, from high to low, because of the context of what that money means.

So don't make the mistake of thinking that your offer is cheap just because it is a small dollar amount. And many creators do this, and it pains me every time I see it. They say, "man, like my rates are so low. Why is nobody hiring me? I just released this course and it's so cheap. Why is nobody jumping in?" And the answer is because there's no such thing as inherently cheap. Something could be $5, and nobody will pay it if people aren't convinced that what they're getting in return is worth the $5.

Let's say you offer to give me a design template for $5, I probably won't buy it because it's $5 for a stupid generic, no thought design template. If I use it, it's gonna make my branding look bad. So why would I do that? $5 for a bad template is expensive because the value of $5 is greater than the value of having that crappy template.

Conversely, don't make the mistake of thinking of your offer as quote unquote "expensive" just because it's a high dollar amount. Remember my example about $50,000 for a beachfront house in Hawaii that is beyond a bargain. Like what? I don't even know how that would ever happen. Why? Because my perception of the value of a beachfront house in Hawaii far exceeds the price of $50,000. It makes you think, what is the catch? Like that seems way too good to be true. So for a beachfront house in Hawaii, $50,000, super cheap because once again, price is significantly less than the perceived value.

Never think of your work as expensive or cheap because of the price. Always catch yourself when your brain does it like, "oh, my thing is expensive," or "yeah, my thing is really cheap" because I think people weaponize it both ways. When people think that their offer is expensive, then they get shy about selling it and apologetic, and when they think that their offer is cheap, they get angry when people aren't buying enough of it. When it's so cheap, like they feel like they're somehow entitled to sales because it's cheap. So people hurt themselves calling their offers both cheap and expensive. It gets wonky really fast.

So when that happens, you gotta redirect your brain. Here's how to redirect your brain: "Am I thinking of my offer as high value for the price or low value for the price?" That's where you wanna troubleshoot - not with vague language like "expensive" or "cheap," because there is no context. Right? So there's no "expensive," there's "high value for the price." There's no "cheap," there's "low value for the price." And no matter how low the dollar amount is, low value for the price will never sell.

And remember, when I talk about value, I don't mean actual value. Remember how I talked about value? The idea of value is very subjective. It's very abstract in a way, but we all perceive value differently. So if people are perceiving that what they get for buying your offer greatly exceeds the money they're paying, that is going to be a perception of high value.

Principle 4: Dealing with Pricing Uncertainty

Okay, so let's address the last thing, which is when you keep going back and forth on your pricing. This happens a lot with earlier stage entrepreneurs. They're very vulnerable to outside opinions or inner doubts about whether their price is what it should be.

What I wanna say first is that you are totally free to play with pricing however you want. I think there's this idea that you have to find one perfect price and stick to it forever and ever. But actually, who says? There's no rule that came down from God where God told Moses to write it on a tablet about pricing. There's no rules. You can do whatever you want. You can charge a different price for everyone who comes in the door.

But the thing is, if this back and forth is stressing you out and you sense that it's coming from a place of fear, it's probably worth addressing. And here's what I want you to know: There's no price that comes with built-in ease and full belief and ease of selling. There's no such thing as a price that's gonna magically eliminate all ambiguity and doubts as you go on your journey of selling. There is a critical skill to be built here, and that is the skill of building belief in the price that you have already decided on.

I am gonna tell you a metaphor that's hopefully gonna make this very clear. Let's say you married someone and some time goes by and you both change and evolve through life, good things happen, bad things happen, and sometimes you feel like you're looking at someone who's a totally different person than the person you married, let's say 12 years ago. This is not necessarily a bad thing. Right? It's just what happens inevitably in a long-term relationship where both people are changing and growing as they should.

So then when you feel like the person in front of you is someone different from who you married, the work becomes loving that person on purpose. Not because that person makes it easy for you to feel butterflies and warm and fuzzy feelings all the time, but because you made a commitment to that person, like "I choose to love this person because I decided they're my person."

Now look, of course, there are times when what was once a match genuinely does become a mismatch and it's unhappy and unsustainable for both people, and then you separate, you get divorced. That happens all the time too, and that's okay. However, if you're the kind of person who wants to do long-term relationships, it's probably gonna be pretty hard for you to do that with anyone unless you teach yourself the skill of loving the other person on purpose again and again. 'Cause otherwise, you are just gonna keep hopping from person to person the first minute you feel things get a little crunchy and no longer feels like the honeymoon period, the first doubt that comes up, you're gonna be out the door looking for the next person.

It's the exact same thing with pricing. If you think good reasons went into the decision to settle on a particular number in the first place, then you have to learn how to believe in that decision and build confidence around that decision on purpose, again and again.

Think of it like hiring an internal lawyer for your price. Anytime someone challenges you on it, or you feel inner doubt creeping in, like, "oh, you know, most people can't afford this," or "It's too low, or it's too high," or whatever - your inner lawyer has to make a case defending it. And trust me, you're gonna need this lawyer because challenges to your conviction about your price is gonna come all the time from all the different directions.

There's people who are gonna say, "oh, it's too expensive." Or people who wanna say, "if you really love your work, you should do it for free, or it should be cheaper. Why are you charging so much?" Or other people in the industry who you look at them and you're like, "wait, they're not even - their work isn't even as good as mine and they're charging three times as much. What the fuck is that about?" Right? "Maybe I should raise my price. Maybe I should drop my price." Challenges will come from all directions all the time.

That's why you need this internal lawyer. You need your internal lawyer ready with all the evidence: the value that you provide, the transformation that your clients experience, the value that your customers get, your expertise, the time and care you put into your work, your skillset. And your lawyer also knows the decision making process that went into the pricing in the first place, and it reminds you why you wanna stand by that.

Your internal lawyer also knows that you deserve to have a price that allows you to not just survive, but to thrive. And that the amount that you charge for the work also has to pay, not just for your working hours, but also for you to have time off and to go on sick leaves and to prepare you for emergencies. I mean, if you have an employer who is not evil and takes care of their employees, they will - the salary they pay should also give you time off and sick leave and family leave and stuff like that. So that's what your pricing has to be for you as well.

Even when you forget these things or you have fears that are talking you into believing that these don't matter or that you are not deserving, your inner lawyer is going to remind you. The lawyer doesn't get emotional or defensive, and they just calmly, confidently present the case, the facts about why your price is fair and justified and efficient for where you are right now and your needs.

And when you doubt your pricing, you feel tempted to lower it or raise it at the first sign of resistance or a slow period, ask yourself, "did I set this price with intention? Was it above my resentment number, and was it something that I was proud to stand behind when I decided on it?" If the answer is yes, then your job is not to change the price. It's to recommit to it and strengthen your conviction around it. Like in the marriage metaphor, learn to love your price and stand behind it on purpose.

Once again, this doesn't mean you never adjust your prices. Of course you can raise them as your skills improve, and occasionally you might offer special rates or promotions. And you know, recently I've been lowering my prices quite a bit because I feel like in this economic situation, people need accessibility more than ever. But the commonality between these things is that these are strategic decisions, not reactions to fear or temporary discomfort when you're in the selling process.

Building that confidence muscle can take practice. It means catching yourself when you start thinking, "oh, maybe my price is too high," or "maybe my price is too low." So instead of going down that rabbit hole of self-doubt, ask yourself, "how can I believe in this price even more deeply? How can I love this price? How can I better communicate the value that I'm providing at this price? What are the principles that went into this pricing?" And then let your inner lawyer get to work defending it. Like, "no, you know, I stand behind this."

Just like in human relationships, the greatest growth can sometimes come in these moments of doubt when you choose to double down on your commitments.

So there you have it. Four principles for setting prices:

1. Never think that your price is a reflection of your value. The value of all creative work is infinite.
2. Find your pricing sweet spot: the number that doesn't give you drama to charge, but is still above your resentment number.
3. Never label your offerings as expensive or cheap, even to yourself. Focus instead on communicating the value relative to the price.
4. Commit to your pricing decisions and build the skill of believing in your price and advocating for your price on purpose rather than constantly flip flopping. Because I promise you, the amount of energy you save from not always going back and forth and debating about this and that in your mind is gonna be so much better channeled when you use it to do better work and to cultivate deeper relationships with the people that you serve.

Alright, that's it for today. Oh, and hey, I keep forgetting to do this in episodes, but if you enjoy this podcast, would you consider going into your podcast platform and leaving me a five star review? It is going to encourage me a lot and it's also going to help other people who are aligned with my work find the podcast. So thank you once again for listening, and I'll talk to you next time. Bye.