How to Price Your Online Services
February 25, 2021
February 25, 2021
Figuring out how to price your services as a health and wellness practitioner can be one of the most daunting tasks. Whether you are just starting out, or have been in business for years, the question of the perfect price is likely always top of mind.
Pricing your services correctly is incredibly important because it not only allows you to establish a healthy and fair exchange between you and your client but allows you to have a sustainable and scalable business.
For many health and wellness practitioners, the majority of their offerings are services, not products. The service pricing model tends to be a little trickier to determine than the product-based model, as products have a tangible cost where the value of services is more subjective.
So, where do you start? Here are two tangible strategies to consider when pricing your health and wellness services.
In order to implement a client-focused strategy, there are a few key steps to take:
Do a bit of market research to find out what your ideal client is willing to pay. You can determine this by first finding out what other practitioners are charging for similar services. You’ll want to look at practitioners who are in a similar market to yourself. This information may be found on their websites, or by simply reaching out to a colleague or practitioner in your community to ask.
You can then test the waters with potential clients, perhaps in your discovery sessions. Start by proposing the market rate (what other similar practitioners are charging), and with each new client, raise the price in increments. Notice how the client responds and any objections they may share with you. This will give you tangible information on what your specific ideal client is willing to pay and ultimately, their perceived worth of your service.
This strategy is all about getting in tune with the value your ideal client places on your services and what they are willing to pay. Each practitioner will have their own niche and client base, so in simply going off what the competition is charging, you may be missing an opportunity to find a more aligned price-point for YOUR clients.
Use the prompt questions from the note template and guide the conversation. Since you are working within a relatively short time frame with a lot of ground to cover, it’s important to keep the conversation on track. Consider mentioning at the beginning of the call that you’ll be running them through some guided questions. Prompting the questions will ensure you get the information you need and minimize the chance of the conversation heading in a direction that takes up too much time.
This strategy is centered around making sure your price is sustainable for you and your business. Instead of choosing your price based on the value of your service to your client (client-focused strategy), you choose the price based on the amount you want to make, after all of your expenses and overhead costs are covered.
The first step here is to determine your overhead costs. These are general business expenses that keep your business operational (ex. rent, technology platforms, virtual assistant, etc).
Next, you can calculate your overhead percentage. This informative post from Gusto shares that overhead percentage is “the percentage of money from your sales that goes towards paying your overhead, or operating, expenses”. This can be calculated by dividing your overhead costs by your gross revenue, then multiplying that number by 100 (ex. $20,000 / $100,000 = 0.20, then 0.20 x 100 = 20%). Your overhead percentage is basically the percentage of your sales that goes toward the operating costs of your business (following the example above, 20% of your sales would go to business operating costs).
Next, include your personal living expenses like housing and food, as you will need enough income to cover these as well, on top of your business overhead.
Now that you’re clear on your overhead and expenses, factor in your own financial goals and determine the price you need to charge in order to meet those goals.
Lastly, it’s essential to understand what a feasible work week looks like for you based on your capacity to see clients and all associated administrative tasks. You can take your total overhead amount, then divide it by the number of clients you can realistically commit your time to without running yourself into the ground. The answer to that is the price you need to charge! (ex. Let’s say you need $12,500 a quarter to pay all of your expenses and meet your goals. There are roughly 12 weeks in a quarter, so that’s just over $1000 weekly. If you know you can commit to 3 new clients a week, that comes out to roughly $350 that you would require from each of those 3 clients in that week).
Even though the self-focused strategy is centered on you as the practitioner, it also benefits your clients. When you feel confident that you can cover your overhead costs and expenses as well as meet your goals, you will have the energy and motivation needed to support your clients to the highest level. It really is a win-win.
When pricing your services, take a look at both the client-focused and self-focused strategies to see which option best meets you where you are at. Keep in mind that no matter which strategy you choose, you must feel in alignment with it. It’s most important that you feel good about the price because if you’re not, your potential client can feel that energy and will likely feel hesitant moving forward.
Pricing your services as a health and wellness practitioner can at times feel daunting and overwhelming, but it doesn’t have to be! In following the steps we mentioned above, you can feel confident in choosing a price-point that serves both you and your client at the highest level.
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