I’ve noticed a ton of questions in the social media space lately around pricing strategy and how to reach six-figures in sales and/or profits.
If I’m speaking to you, you’re the entrepreneur who’s been in the game for a while. You’re not here to cruise, you’re ready to hit the ground running – and make more money.
…But you may not be sure how to price your products and services.
There are many pricing strategies out there, and most focus on the market and how you can price your services according to what the market dictates.
While these strategies are helpful, I find them too general and they don’t get to the heart of your business or your ideal lifestyle. They tend to box you in and most entrepreneurs prefer to work outside of the box.
Pricing Strategy For The First 100K
If you’re dreaming of hitting your first six or seven-figures, it can feel like a glass ceiling that you can’t breakthrough.
I’ve been there too.
So, in hopes of helping a fellow entrepreneur, I want to share how I strategized and executed my first 100K in sales – by reverse engineering my sales goals.
It’s quite simple, and you can do it too:
Strategy #1: Clarity – how do you want to serve clients?
When starting out, narrow down how you’ll serve your clients: one-on-one, one-to-many or zero-to-many (essentially: private, group coaching, or a product/program that doesn’t require you).
You need to decide what will serve you and your client the best way.
I deliberately chose to focus on one-on-one first because I knew I could charge the most for that service, add the most value and it would help me grow my business and make an impact the fastest.
Strategy #2: Simplify – choose one lane, and stay in it.
Too often, people try to chase too many things in their business at once, and they dilute their efforts and effectiveness.
Get super clear on what you’re selling and focus on one thing until you figure out how to make it work.
Don’t give in to the pressure to be a jack-or-jill of all trades – become a master in one.
What’s yours? For me, it was a year-long coaching and mastermind group.Too often, people try to chase too many things in their business at once, and they dilute their efforts and effectiveness. Click To Tweet
Strategy #3: Specify – break down the numbers
With that “one thing” in mind, you need a tangible, results-oriented goal you can aim for.
Not some random or idealistic number – making money doesn’t just happen. It requires work, (and marketing) and this is where you start.
You need to be strategic in order to hit that $100K goal by the end of the year.
How? Work backwards.
Let’s break down the numbers:
When I did the math, I realized I needed to work with 10 people for a year who were willing to pay me $10,000 or more. I took it a step further and broke that price down to $1000 or $1500 per month.
Starting from bottom up, here’s how you, too, can create your goal:
- 10 people at $1000 a month = $120,000 per year.
- 10 people at $1500 a month = $180,000 per year.
With this strategy, even if you only reach 60% of your goal, if half of your customers pay $1500 a month and the other half invest $1000 per month, you’ll hit that $100k.
The next part isn’t fancy. Do everything you can, perhaps creating a (very cringy) video like I did, to spread the word. It matters that you start somewhere and you do the work of marketing what you’re selling.Selling, profits and pricing strategies? We all start somewhere. Click To Tweet
Talk about it all the time. You may sound like a broken record: “I’m looking for ten people who want to work with me next year…”
But keep at it.
Within 60 days, I had 10 business owners who said yes.
…That year I did $165k in my business.
You can do this too.
Working Backwards to Price Your Services/Products
I want to reiterate that when you set a goal, you need to price your services in such a way that even if you don’t hit the total number of buyers you aimed for, you’ve overshot your goal and will still attain it.
How did I choose my prices?
Honestly… it was a bit of a wild guess.
But, here are two things you should think about with your pricing strategy:
- Take the total number of “hours” you think you would spend in a year and put a value on it that makes you happy. This is subjective!
- Pick numbers that feel easy to sell – $1000 or $1500 a month felt like a good place to start.
If you get crystal clear on your business model, you can work towards hitting your goal.
You don’t need complicated funnels, sales pages, video series and fancy email sequences to sell stuff…
Get clear, simplify and break down your numbers so you know the specifics to aim for.
Then – execute!
What pricing strategy did you use when you started out your business? Tell me below.
2 thoughts on “Pricing Strategy: Get Clear On Your Goal And Work Backwards”
What about a business that sells a specific low cost (5$ avg price ) product in a seasonal environment? We are dependent on weather and volume of tourists coming to a rural area of Nova Scotia that has a very historic draw (Annapolis Royal). We have streamlined our product offers this year (our second season) but the weather really has an impact on our sales. (We have an ice cream shop)
When I worked in retail “weather” was the biggest excuse my team used to give me until, we started tracking sales and the weather and saw that there really was no correlation between the two. Some days we had terrible weather and great sales, other days we had beautiful weather and awful sales. In your case, weather might impact buyers because who wants to walk around outside eating ice cream in the rain? Not many people thus you need to double, and triple down on your marketing efforts to maximize your sales opportunities with every single customer. I’d look at my total transactions for the season for year one and year two, and tally them up, Then I’d take the total sales I want to attain, and divide it by the number of transactions. Let’s say you want to do $100,000 in sales and you’ve only had 1000 transactions, that means each person needs to spend $100. That’s a lot of ice-cream. You can either get all 1000 to spend $100, or you can figure out how to get 2000 transactions, or 3000 transactions instead. I suspect you’re open 6 months of the year, or 182 days. If you take 100,000 and divide it by 182 days, you need $1219 per day. If you take that and divide it by your average sale, you can figure out exactly how many transactions you need per day. Once you know that, you can start to identify marketing strategies to reach that goal.