7 Unpleasant Side Effects Of Undercharging For Your ServicesMar 28, 2022
Undercharging for your services will lead to more than just a measly bank balance...
In this week's episode of the Heads Together podcast, I share with you the truth about what happens to you, your clients, and your business when you consistently undercharge for what you do.
Remember, the language of entrepreneurship is real talk... a good dollop of it on its way to you in this episode.
When you under charge for what you do, you will without any question of a doubt attract the wrong kind of clients. That is a fact I have seen time and time again. When you charge too little for your service. You attract the wrong clients. You attract clients who simply don't commit to what they're paying for. You attract clients who don't show up and do the work. They don't get the results that they've hired you to help them with. If you're a coach, if you're a consultant, if you're a branding, strategist, a graphic designer, whatever it is, if you are undercharging for the service you provide your clients are not going to get the results that you've promised them because they won't show up and do the work.
What happens when clients don't get what they were hoping for? You don't get that glowing testimonial. You don't get that referral to more perfect clients that you want to work with. So it's really important to charge appropriately for the service, you offer to make sure you're attracting the right clients who are going to get the results that they want. Because you've got to remember that people aren't paying you for your product or service, they're paying you for the result they want. And if they don't get that, they will be unhappy, despite the fact that in your mind, you are doing them such a great service by offering it to them at a lower cost. Clients who invest, show up, do the work, get the results, it's as simple as that.
The second side effect of undercharging Is that you adversely affect the perception of the value of what you offer. You do a complete and utter disservice to your skills, all those years of experience, you completely annihilate them. Because if you undercharge, the perception will be that what you're offering is of low value. And that is going to put off your ideal clients. Because like I just said, they're not paying for the offer, or the service or the product, they're paying to solve the problem they have. So if they feel like your price is low, they will make an assumption that it's not going to solve their problem, that it's not going to meet their needs.
Okay. Now, the third one, this is a really important one, actually, if you think about it if you undercharge for what you do, you're sending a message to your potential clients, that you underestimate the severity of their problem. They want to pay for the solution to their problem. And if it's a very painful, difficult, stifling, restrictive problem that you can help them solve, yet we put a small charge against solving that problem, the client straightaway feels that we don't get it, we don't understand how difficult this thing is for them. And that can be a really unexpected consequence of not charging enough. We think that by undercharging, we're making what we do more accessible to people. We're not - we're encouraging them to deselect themselves from our potential client list.
If you consistently undercharge you are actually cheating your future clients out of working with you. Because this is very simple, you will have an unsustainable business model. You will not be around for the long haul if you keep consistently undercharging for what you do. And there are future clients out there who need what you do. They need you to be around for them in years to come. So you must make sure that you're charging at a level that makes your business model sustainable for the long haul.
We want the business model to be sustainable for the long haul. But also we want space in that business model. To be able to make philanthropic gestures... wouldn't it be nice to charge for what you do at a level that allows you to then offer scholarships for your programs to people who can't afford what you do. Maybe you're going to want to intentionally discount your price every now and then, to make what you do available for someone because you feel really drawn to serve them. If you're consistently undercharging all the time, there's no space for you to do that. If your business is just covering its bills each month, there's no space to be philanthropic in your business. You need to be charging what you're worth, what your service is worth so that you've got the freedom to discount when you feel intentionally drawn to do so.
When you under charge for what you do, you stop enjoying what you do. Because you feel resentful. Build space into your business, by charging a premium price for a premium offer. Of course, there's one assumption I'm making... that you are outstanding at what you do. This is a non-negotiable. Everything else can be tweaked. You can get clever with marketing, pricing, sales tactics, and content creation. But if you're not outstanding at what you actually deliver, that is all meaningless. So if you know you're amazingly good at what you do, then you need to make sure you're charging accordingly. So that resentment doesn't build up and stop you from enjoying what you do. There's a reason we all stepped out on this entrepreneurial path. And that is for the perks of it, the benefits, the freedom, the money, right?
Consistently undercharging means that you're not going to have the amount of money you should have to reinvest into your business... to give you an opportunity to grow, to scale, to try new things. In last week's podcast episode, I was talking about what we have the absolute privilege to do when we are confident enough to charge a high ticket price for our premium offers. We get to build in space into our business, we don't need to work with as many clients we don't need to be doing as much day-to-day, which means we can build in space to try new things. Try new projects within our business, see what works, see what doesn't work, see what we enjoy, see what we don't enjoy.
But if you are undercharging, you have no space in your business to try new things to experiment to do the exciting bit, to chase the shiny objects, if you want to, I get really fed up with people being told off for chasing shiny objects. As long as it doesn't stop you from actually fulfilling on something that you want to achieve. Then try as many different things as you want to try to find what's right for you. But charge your worth, value your worth, know your worth.
Listen to this week's episode HERE
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