The Psychology of Pricing

Pricing your services is one of the most critical and emotionally charged decisions you make as a B2B service provider.

Whether you’re a consultant, strategist, agency owner, or done-for-you expert, how you price isn’t just about math. It’s about mindset.

Yes, there’s a baseline calculation that can help ensure your pricing is sustainable.

In my conversation with sales consultant Talica Davies, we explore the psychology of pricing for B2B businesses and service providers. We touch on the numbers, but more importantly, we’ll unpack the hidden beliefs, fears, and mental blocks that might be holding you back from pricing with confidence.

Here are some takeaways:

Start with the Math

To build a sustainable business, you need to know your numbers. That includes:

• Your revenue goals

• Your capacity (how many clients you can serve)

• Your cost of doing business

• The time and energy each client engagement requires

From there, you can reverse-engineer what you need to charge in order to hit your targets. This part is logical. But once you see the number, you might still hesitate. That’s where mindset comes in.

Understand Your Worth, Their Worth, And Perceived Value

Your prospect is evaluating the worth this investment has on achieving their goal. What can they expect to gain from working with you?

You also want to get clear on what this work is worth to you? How much of your time and attention do you want to spend achieving goals with your client? These are all factors that go into your pricing.

It's also important to understand the perceived value of your offer. For consultants moving from serving in a corporate space to now serving small businesses or entrepreneurs, this may require a shift. A large organization places a different value on things.

For example, large corporations with media budgets understand the value of a free editorial spot. They know one hit has save them thousands in advertising. But a small business or solopreneur who has never experienced a media buy, these numbers are unfathomable. A media appearance has a completely different value in terms of confidence and visibility. Know how your target perceives this value and adjust your messaging.

Sell to the People Who Need It and Can Afford It

If you have a $5K offer and you're selling it to someone who has $500 to spend, no amount of convincing, coercion, or coaching will land this sale. It doesn't mean there's a problem with the offer or your service. You're just selling to the wrong person.

This was a hard truth for me to accept. When I started McEwen Media, I wanted to be for everyone. I wanted media exposure to be available to anyone with an interesting story (which is everyone on the planet).

But just because I want to be for everyone, doesn't mean everyone needs my services. When I took a critical look at my service and the transformation, I realized the businesses who need and want it are actually much larger than the businesses I market to.

It took a year for me to accept this. I needed to release the belief that I need to serve all price points. I needed to build the belief that I can market to major organizations. And I needed to find a way to serve those who need my work but can't afford it.

Enter social media. You can be for everyone on social media while also building a sales strategy that aligns your offer with those who need it and can afford it.