If you haven’t read my articles on why you shouldn’t list your consulting prices on your website or how to make $125 per hour as a church music consultant please take a look and tell me what you think.
Coming up with a number for your professional services often is hard (and to be honest when you first start doing it, it feels like you are prostituting yourself), but consider this, with every “job” you have ever worked, the price that you agreed to work for was what you were admitting to your employer you were worth. Now doesn’t that sting a little? By the way job is an acronym for Just Over Broke. If you want to free yourself from the j.o.b. mindset and truly get paid what you are worth you are going to have to first figure out what you are worth. Okay, so how do you price yourself? Here are five things to consider when coming up with that number.
1. Market forces
Whenever you are pricing a service you have to keep in mind what the market will bear, what you need, and what your priorities are. For example, when I first started my studio, I was charging $15 for a half hour lesson and $30 for an hour lesson. I have a degree and have been playing for over 20 years but that’s what I felt the market could bear at the time due to recession and the rural area in which I live.
In retrospect, if I had known the market a little better I may have charged more. The prices in Providence are considerably higher than what I charged though I am about twenty miles outside of the city. However, $30 an hour was much better than barista wages so I was more than happy to work for that starting out.
2. Price out the competition? Should you do it?
For the record: I don’t do this and I don’t advise doing this because it comes from a scarcity mindset. You and I don’t have the same skillsets, we don’t have the same expertise, we don’t serve the same area, and we don’t necessarily have the same ideal client. Why should we compare prices? And why should I call up competition, lie and pretend to be an interested student, and get them to discuss prices over the phone so I can undercut them. There are actually business professors who tell you to do this.
First of all, if you read my article on not putting your prices on your website, you, also, know that I don’t approve of this method. There is an objection to use which I talk about in that article, so if you have competitors calling and asking your rates you might want to check out that article and find out what it is.
Teachers occasionally call me up and try to find out my rates. Usually, it happens about once a year around New Years when they decide they are going to raise their prices. Notice, I say teachers and not consultants. The difference is in our focus. Music teachers often complain that there aren't enough students to go around. They're right. There aren't enough people that want to sit still for an hour and play the same boring song fifty thousand times again and again. This is 2018 not 1918. If you don't adapt then you will have problems. If your focus is on you and not on how to engage and provide value of course you will struggle to find clients. If you don't specialize you will be chasing down every prospect, undercutting and nickel and diming for the rest of your career. Sound fun? Not to me, but there are people who live this way.
But right now we aren’t talking about them. We’re talking about you. Believe in your best self. Believe in abundance. Don’t get sucked into a scarcity mindset that there aren’t enough clients to go around. I believe that there are more than enough clients for everyone if everyone opens themselves up to abundance. All music teachers should be music consultants (though most are not), but not all music consultants have to be teachers.
3. Identify your goals
This has big impact on who you should target and how much do you want to charge. Do you have a teacher mindset where you would love to teach lots of students? Maybe you are really good with young students or group settings. Maybe you like to deal with clients preparing for a particular goal. The narrower and more focused that you can make your specialty the more money you can charge. However, the broader and less focused you make your practice the less you can charge.
I prefer to teach fewer clients at a higher price (I’m just trying to be as honest as possible). That’s why I generally refer to myself as a music consultant not a music teacher. It’s not that I’m extremely lazy, I just put a high value on free time. Free time allows me to focus on perfecting what I love to do so that I can provide even more value to the clients that I serve. It, also, prevents you from burning yourself out too quickly.
I don’t travel to my clients homes because I don’t like to waste time driving. Other people don’t care because they deduct it or pass it on to the client. By the way, the new tax plan is most likely going to make mileage harder to deduct for small business owners and consultants. I would recommend that you host your client meetings or find a way to pass on the cost to them for driving. Making house calls can be lucrative though.
There's this one guy that I went to college with that used to teach in the suburbs of Chicago and charged $100 per 45 minutes. However, he would drive to the clients and he taught everyone in the same neighborhood on the same day because it was three hours in traffic to get from his house to that neighborhood. Working two days a week he was able to make quite a nice income and paid down his loans quickly. Identify where you want to go before you start and you’ll have a good idea of who to serve and how to price your services.
Do you like to travel? Maybe you can consult through Skype while you see the world. I know a teacher teaching through Skype and she makes $30 an hour while living in Thailand (where musicians on average make far less). Don't focus on what you don't want. Focus on what you want and point in that direction.
4. Better under than over
While I would rather be lower than higher on my price at first (until I have some clients that I can use as referrals or case studies), some consultants worry about pricing themself too low. They worry that if the come in low then they will never be able to raise the prices. Instead of jumping in, they sit and think about it and then get stuck in a cycle of "paralysis by analysis." Don't sweat it.
The good news is that even if you underprice yourself accidentally, you can raise your rates later on. That’s another article for another day though. You may want to underprice yourself intentionally to get clients. Getting "client zero" sometimes is the best thing for your confidence level and allows you to tell people "yes, you have clients" or "a client" if you want to sound exclusive.
Remember this piece of advice though before you are tempted to give away your services to the first person who walks in the door, the clients that are attracted by the low prices are not usually the best clients. It’s better to price higher (at what you feel you are worth) and offer “discounts” if you like the prospective client than to undercut yourself out of the gate.
I had one client who was bringing her three daughters for hymn playing lessons. Her husband was complaining that she was spending money, driving all that way, and coming home late for dinner. He wanted her to pull the students out of lessons. Instead, I suggested that she take lessons too and that instead of $15 each, I would teach all four for $50 a week. This sounds ridiculous at first, but it shows that you must be able to think creatively. Because I was teaching in a big auditorium, I conducted it more like a masterclass. I had the two younger students that I taught first and much of their instruction was done in tandem because it actually benefited them to be in competition with each other. I had the mom and the older daughter sitting in the chair and we would get comments from them periodically (like a masterclass). When it was the two older students turns to learn, their lessons were separate which allowed one of them to be sitting with the two younger students at any given time. They benefited because they were developing their ear and learning to give constructive comments. I was able to work with all four in this manner in about the same amount of time as I would have been able to doing traditional consultations, they got more value because they were being able to engage in many ways during everyone's time, and the wife was able to tell her husband she got a "discount"...and I got five dollars more a week for the same amount of time. Everyone wins.
5. Offer discounts to retain good clients
For example, my first student in Rhode Island (also, the student that has now been with me for the longest) almost left me because her dad lost his job during the recession. The student was a good student and I didn’t want to lose the client so I taught that student for free until the dad got another job. In the mean time, though, the family referred me five other students and my first student has been my most loyal customer ever since. Sometimes doing something nice for someone promotes reciprocity—actually, most of the time people reciprocate when you do something for them.
It’s much easier to set your prices and if a prospect can’t afford it, offer a discount if they do something for you. "I’ll give you ______ if you give me five starts and a review on Google usually is a really good one" (you wouldn’t believe how many people buy from a company because they have five stars and a review).
You can offer a referral coupon, as well. I used to offer a free lesson for a referral. If you convinced your friend to take lessons from me it was a free lesson. If you brought me three students you got four free lessons…you can build a studio very quickly if you have a program like that and you’ve built up some good will with your clients.
If you don’t like the idea of long term discounts but you are potentially going to lose a client because of finances you can offer a temporarily discount your price for prospects if something comes up and they may be cancelling lessons or your consulting services. One of student’s had a family member who was diagnosed with cancer. The family couldn’t afford lessons because they had to pay for cancer treatments. I didn’t want to lose the student because of the progress that we had made so I taught the student for free for eight months until the family member was cancer free. That “temporary discount” has paid off massively. I have done thousands of dollars worth of business with that family since.
Maybe you’re skeptical or you don’t like the idea of discounting your services on an as needed basis. That’s fine. I’ve just found in my experience that it’s often more advantageous to retain a good customer for slightly less money than it is to attract another customer. Plus, I believe in reciprocity and I know, that if you do nice things for customers, they WILL reciprocate. Even if they don’t though, some things aren’t about the dollars and cents. It’s about having a sense of your place in the world and tapping into the abundance so that you can do what you love to do and be fulfilled.
Anyway, I really hope that these five tips help you to get your ideal clients as much as they have helped me over the years. I really appreciate all of you taking the time to read my articles. Please comment if you have questions or suggestions for new articles and if you like the content smash the upvote button. I’d love to get some engagement on my posts. Please stay tuned for my next post: How to Increase Your Prices by 33% and Keep All of Your Clients.