There are many factors to consider when setting a viable pricing strategy for your practice–from the markets you serve to the competition you’re up against to your overall business goals. Underpinning all of this is the fact that the price clients are willing to pay for your services will most often be strongly influenced by their perceived value of what you deliver. Luckily, the perceived value of health and wellness offerings is high among today’s consumers. In fact, 79% believe health and wellness is important with an accompanying widespread increase reported in the prioritization of wellness. 

All of this means there’s a solid chance that the clients you’re targeting are already primed to feel positive about the health and wellness services you offer. While this is great news, it doesn’t make it any easier to wade through the many pricing strategies available to you. It’s easy for insecurities and second-guessing to creep in when you’re trying to achieve the perfect balance of meeting clients where they are financially and getting paid appropriately for the expert services you offer. We’re here to help.

This handy guide is designed to demystify some common approaches to developing a pricing strategy so you can create one that works best for your business.

Why You Need a Pricing Strategy

Pricing strategy refers to the method a business uses to set a mutually agreeable price for their products or services. There are a number of factors to keep in mind when deciding how much to charge:

• Your price is a reflection of your value. As mentioned above, today’s consumers are largely inclined to see the value of focusing on their health and wellness. You should also take into account the amount of time and money you’ve invested in building your expertise. Charging prices that are too low not only undermines your profits, it can degrade the perception of your expertise and service quality. 
• You have hard costs to cover. Your hard costs could include a physical location, course materials development, supplies, equipment, shipping fees, and more. A practitioner who offers all virtual services will naturally have lower overhead than a practitioner who is paying for rent, utilities, staffing, software, and other costs associated with meeting clients in an office setting. You’ll want to consider whether your pricing strategy is designed to ensure you make a profit even after all your costs are covered. 
• Your competition plays a role. A generalized meditation coach is going to face more competition than a meditation coach who has niched down to serving women who are on a breast cancer journey. If there are other practitioners in your area offering similar services to you then you’ll need to also give thought to how that impacts your pricing techniques. (More on that below.)
• Your big picture business objectives matter. A holistic nutritionist who is just starting out and wants to attract new clients fast will choose a different professional services pricing strategy than a more seasoned practitioner who has an established customer base and is seeking to maximize the profit earned on each client. Continually evaluating your pricing strategy through the lens of your larger business objectives is an important component to future proofing your practice. 

It’s important to remember that pricing strategies aren’t meant to be one size fits all. Also, keep in mind that disruptive events, like a global pandemic or recession, are not a valid reason to panic and slash prices. You bring unique expertise, objectives, and value to the table and all of those factors influence how much you ultimately charge your clients.

Unpacking Top Pricing Strategies

While there are 14 common pricing strategies you could consider for your practice, we’re going to unpack the top seven and share guidance on how you might apply them in your practice, along with some pros and cons associated with each.

1. Penetration Pricing

What is it?
Penetration pricing is when your products and services are strategically priced lower than your competitors. 

When could you use penetration pricing?
This can be an effective pricing strategy for new or student practitioners who want to get noticed and more quickly achieve market penetration, while simultaneously growing a marketable audience. 

This pricing strategy is a good fit with the following health and wellness services:

• Special offers - e.g., a one-time boot camp that’s 20% less than competitors charge.

Pros of penetration pricing: 

• It can help you grow your market share faster.
• There’s an opportunity to raise prices once clients like and trust you.

Cons of penetration pricing: 

• Some clients might associate your lower prices with inferior service.
• It’s not sustainable for the long term as it’s difficult to cover your operating costs.

2. Psychological Pricing

What is it?
Psychological pricing is primarily used to appeal to a client’s emotional perception of an offering. An example of this type of pricing strategy is charm pricing, where a price ends with a 9. There’s a good reason we see this pricing all the time in retail environments. Studies have uncovered a bias where price perceptions are influenced by the left-most digit of a product’s price. In practical terms, this means a program you price at $99.99 will automatically be perceived as being closer to $90 in cost than $100. 

When could you use psychological pricing?
If you want to evoke an emotional response, such as excitement or intrigue, a psychological pricing strategy might be for you. 

Setting an artificial time constraint is another psychological pricing tactic you can use. For example, imagine a practitioner is launching a new online nutrition class to help women better manage perimenopause symptoms. If they want to fill up registration more quickly they can add some “hurry” language to the offering–e.g., Sign up by tomorrow at midnight to receive the special introductory price! This strategy can trigger the FOMO (Fear of Missing Out) and urgency needed to drive higher registration.

This pricing strategy is a good fit with the following health and wellness services:

• Bundled Services 
• Subscriptions
• Courses
• Group Sessions

Pros of psychological pricing:

• It can influence the way clients view your offerings without the need to tangibly change them. 
• It has the potential to quickly increase demand for offerings. 

Cons of psychological pricing:

• Some tactics could potentially be viewed as deceptive by clients.
• Going too deep on discount pricing for exclusive offers can degrade service quality perceptions. 

3. Bundled Pricing

What is it?
Bundle pricing offers a discount to clients who purchase multiple services at once.  

When could you use bundle pricing?
Bundle pricing is effective for packaging up a suite of services that complement each other. This pricing strategy is also effective in getting clients more deeply embedded in your practice.  

This pricing strategy is a good fit with the following health and wellness services:

• Memberships and Subscriptions
• Any type of online program
• Group Sessions, including online group challenges or boot camps

Pros of bundle pricing: 

• You can offer clients more value and upsell your services. 
• It can help you stay competitive in a saturated market. 

Cons of bundle pricing: 

• Customers who don’t value some services in the bundle might feel like they’re paying too much for what they’re getting.

4. Promotional Pricing

What is it?
Promotional pricing is offering a temporary discount to incentivize customers to purchase.

When could you use promotional pricing?
This pricing strategy is often used as a tactic around certain events, like holidays or brand anniversaries, to quickly increase sales volumes. For example, if you find your bookings slow down around major holidays or over the summer you could introduce limited-time promotional pricing to prop up slumping sales.

This pricing strategy is a good fit with the following health and wellness services:

• 1:1 Sessions - including in-person or virtual via Telehealth
• Bundled Services
• Memberships and Subscriptions - e.g., Black Friday deal or Summer Subscription Sale
• Group Sessions, including online group challenges or boot camps

Pros of promotional pricing: 

• It can attract new customers to your practice or encourage existing customers to try new offerings.
• It can help you gain awareness and traction when you launch a new offering.  

Cons of promotional pricing: 

• Excessive use of promotional pricing efforts can train clients to expect lower prices. 
• A client who buys through a promotional offer won’t necessarily convert to repeat business when the prices return to normal. 

5. Value Pricing

What is it?
With value-based pricing, you decide what to charge based on the perceived value of your products or services. 

When could you use value pricing?
Value-based pricing doesn’t work well for commodity offerings. It’s best to use this pricing strategy if you offer a service or product that’s well differentiated from competitors and highly valued by clients. 

This pricing strategy is a good fit with the following health and wellness services:

• Bundled Services
• Memberships and Subscriptions
• Online Programs

Pros of value pricing: 

• It may allow you to charge higher price points.
• It helps to promote client loyalty to your brand.

Cons of value pricing: 

• Perceptions of value can shift so you need to be in tune with changing market conditions and client sentiment.
• It can be challenging to find a single price point that works for all clients.  

6. Competitive Pricing

What is it?
This pricing strategy uses competitors’ pricing as a benchmark to match or beat. 

When could you use competitive pricing?
This is a strategy most often used by companies that offer similar products that are harder to differentiate than services. However, practitioners operating in a space with lots of competition can also adopt this strategy to see if a slightly lower price difference is a factor that nudges clients towards purchase. 

This pricing strategy is a good fit with the following health and wellness services:

• 1:1 Sessions
• Memberships and Subscriptions

Pros of competitive pricing: 

• It can help with client retention and offer new clients an incentive to work with you. 

Cons of competitive pricing: 

• Competing strictly on price can become a race to the bottom, which seriously impacts your profit margins.

7. Cost-Plus Pricing

What is it?
Cost-plus pricing is built based on fixed and variable factors. It’s a simple strategy where you decide how much more you’d like to charge for services over your cost to produce them. 

When could you use cost-plus pricing?
This pricing strategy is typically used by brands who sell physical products. If a service or offering requires a lot of labor on your part to produce or other fixed costs to deliver, like shipping fees, course materials, or physical equipment, you can take a look at cost-plus pricing. Note that it can be tricky to determine the correct margins as your services likely offer far greater value to clients than over and above your costs to create them.

This pricing strategy is a good fit with the following health and wellness services:

• Online programs - including passive income courses you’ve invested in creating
• Group Sessions, including online group challenges or boot camps

Pros of cost-plus pricing: 

• You can set a price that covers your costs and factors in a reasonable margin for profit.

Cons of cost-plus pricing: 

• If your competition is focused on acquiring new clients over maximizing profits, your pricing may be much more expensive. Performing thorough competitive pricing research can help to mitigate this risk.

Example: How to Choose a Pricing Strategy for Healthcare Services

Now that you better understand the pros and cons plus potential applications of the most common pricing strategies, let’s take a look at how it comes to life in a practical example of selling a monthly subscription offer.

In this example, the practitioner is offering clients the following for one monthly fee: 

• 30-min individual coaching sessions  x 2
• Live group cooking demo over Zoom x 2
• Guest expert presenters - Monthly
• Weekly recipe guide with shopping lists
• Discounts for high-quality, professional-grade supplements
• 20% discount to book additional 1:1 coaching sessions, if desired

There are a few viable pricing techniques this practitioner can consider:

• Bundle pricing - This strategy could increase your clients’ positive associations with your brand and perceptions that they are getting more bang for their health and wellness buck.
• Value pricing - If competitive research reveals that this is a unicorn offer that clients are highly interested in, a value pricing strategy could allow the practitioner to charge a premium price that will easily cover all hard costs with healthy margins to boot. 
• Competitive pricing - It makes sense to research whether competitors have similar offerings and how much they are charging for them. It’s important to note here that you don’t always have to beat competitor prices. For example, if you have two main competitors offering similar subscription services, one at a higher price point and one lower, your strategy could be to offer a price point in the middle. This can also invoke the middle option bias, where people tend to select the most moderate option when presented with a selection of choices.
• Promotional pricing - If this is a new offering, leveraging promotional pricing would be an effective way to boost signups out of the gate. The subscription price could then be adjusted upwards for clients who sign up after the promotion ends. You could use customer testimonials from happy clients who signed up under the promotional price to help drive ongoing interest in the program.

Understanding Your Market to Decide How Much to Charge

Developing a sound pricing strategy requires a solid understanding of the market you operate in and the demand for your services. Here are a few tips for unearthing key insights to help inform your service pricing strategies: 

• Visit your competitors’ websites to see if they post pricing. Subscribe to their newsletters and follow any owned social media channels to be in the know when they share special promotions, bundles, or seasonal offers.
• Keep an eye out in your local newspapers for any competitor advertising that lists prices. 
• Drop by relevant community events, such as health and wellness expos, and see what participating practitioners are charging for services similar to yours. 
• Check in with your professional association or alma mater to see if they offer guidance on how to most effectively price services. 
• Use search engines to look up terms related to the services you intend to offer to see if you can find pricing recommendations - e.g., average cost of a 10-day cleanse program. 
• Visit online communities, like Reddit and Quora, where communities of people answer each others’ questions on every topic imaginable. Bonus: This can also provide insights into what clients feel are reasonable fees for services you may offer.

When to Increase Your Prices 

At some point you’ll cross the bridge of increasing your prices. It’s always going to be more tenable for clients if you do so slowly and incrementally over time, as opposed to suddenly jacking up prices. Here are some ways to approach price increases without losing clients: 

• Reframe your offerings. Giving your offerings new names and updating descriptions to include more value can help to justify price increases in the minds of clients. For example, you could point out to clients that their prenatal yoga class includes exercises and stretches that make them 95% less likely to experience long-term pelvic floor issues. Even if those exercises were always part of the program, bringing the value forward in concrete terms helps to justify a price increase in their minds. 
• Communicate clearly. Don’t just arbitrarily increase prices. Tell existing clients why prices need to go up–for example, to keep up with inflation–and how it impacts them.
• Reward loyalty. When looking at increasing prices, decide whether it will be across the board or if it’s economically feasible to let existing clients take advantage of grandfathered pricing on existing programs.

Build a Pricing Strategy that Makes Sense For Your Business

Setting an effective pricing strategy is one of the most important decisions you can make as a health and wellness professional. If you charge too little, it can be incredibly challenging to adjust to the appropriate levels down the line. If you charge too much, you may have difficulty convincing potential clients to book your services at all. 

One thing’s for certain–the pricing strategy you develop today is inevitably going to change over time to keep up with the evolution of your business, changing market demands, and inevitable economic shifts. You can’t stop change from happening, but you can be ready for it with an agile pricing strategy built using the guidance in this article and reviewed regularly. 

Practice Better is the complete practice management platform for nutritionists, dietitians, and wellness professionals. Streamline your practice and begin your free trial today.