I’m a big believer that professionals in general, and therapists especially, undercharge for their services far more often than not.
That was one of the main reasons why I asked a while back, “Are You a Walmart Therapist?”
Since nearly a thousand people have already read that article, it seems to have struck a nerve.
Today, however, I’m asking the opposite question. Are you already charging as much as you should, if not more?
4 Signs You Shouldn’t Increase Your Rates
It’s pretty simple really, and these 4 signs are closely related (which is actually good news!).
First, if you don’t make a big enough difference for you clients to justify charging more, you shouldn’t. In marketing terms, you don’t have a big enough “Unique Value Proposition” or UVP.
Second, you may not be experienced enough to command a premium fee.
Third, you don’t have (enough) so-called social proof. In most cases, social proof would be client testimonials. In therapy, getting those is ethically problematical. However, there are other options, as I show below.
Fourth, you may already be charging at the top of your market, and don’t have enough clients showing up. This is more often a matter of fear than fact, however. Far more professionals take counsel of their fear about this, something like, “I have clients now, but if I charge more, they’ll go away and others won’t come.”
To Change Things, Do This
The first step is almost always to work on your mindset.
You may suffer from so-called “impostor syndrome,” where your self esteem is too low and you ask yourself (rhetorically), “Who am I to charge so much?!” Another version might go like this, “Why would anybody be willing to pay so much for an hour (or 50 minutes) of my time?!”
To address these, I frequently share the apocryphal story of a young woman who runs into Pablo Picasso at a local park. She feels bold and asks him to sketch her. He flips to a fresh sheet on his sketch book, looks at her for 10 seconds, and quickly runs his pencil in one long line. “That’s amazing!” she exclaims. “You totally caught me with that single stroke of your pencil! How much do you want for it?” He responds, “$5000.” “What?!” she exclaims indignantly. “It took you 15 seconds to sketch that. How could it possibly be worth $5000?!” In response he says, “Madam, this sketch took my entire lifetime!”
The lesson here is that people don’t pay you for your time. They even don’t pay for your education, experience, or expertise! No. They pay for the difference you can make for them.
If you can already make a big enough difference, you can charge more than you currently charge. However, you must do the internal work to convince yourself of this fact. Fail to do so and just like a belligerent dog can smell your fear, your prospective clients will sense that you don’t believe you’re worth the fee you’re quoting, and will go elsewhere.
If you don’t make a big enough difference, and related to that, if you don’t have enough experience, get more training. Find a great professional mentor. Reflect on the issues facing your clients and come up with a unique approach to solving them.
Then, work with some clients at your current fee level, and get the extra experience. Then, that greater experience will let you make a bigger difference for your next client, and the one after her. By doing the above, you will absolutely build up your own UVP.
Next, get some great testimonials.
If you’re not a therapist, these should speak to what your previous clients felt like before working with you, what they faced, how you helped, how your help made them feel, and what difference you made for them.
If you are a therapist, look for testimonials from colleagues and referral sources. It could be a physician or a member of the clergy, and they can speak to the difference you make for them in serving their clients and/or the difference you’ve made for those clients.
Finally, if you’re charging at the top of your market and already don’t have enough clients, consider expanding to more affluent markets, and to higher-ticket services. This is especially feasible today, when COVID has driven many professionals, including therapists, to provide services virtually.
If you’re doing all your client-facing work online, there’s no reason you can’t market to more affluent locales, within your state for license-requiring services, and nationally or internationally for services that don’t require a license. If you’re a therapist and are finding it difficult to get clients to pay out-of-pocket high fees, perhaps you can expand to offering coaching services, where clients have no expectation that insurance will cover them. There, you’re not subject to the whims of insurance carriers who limit your fees so they’re far lower than you deserve, require you to jump through hoops, delay your reimbursement, and appear to often decline coverage simply because they can get away with it.
The Bottom Line
If you feel you shouldn’t charge more than you currently do, you may be right, for now.
However, that doesn’t mean you have to simply live with your current financial results. Follow the above ideas and you have a great path to changing things so you get to where you will be able to realistically charge more because you’ll be making more of a difference for your clients, and will be able to clearly show prospects that paying your new and improved rates makes perfect sense.
Financial strategy is all about setting financial goals, crafting a plan to reach them, and doing what's needed to start implementing that plan in both your business and personal life. This includes making sure you can charge fees that let you do a great job for all your clients all the time, because you’re not forced to work more than you should be taking on. If you'd like to learn what financial strategy can help you accomplish, email me and we'll coordinate a free, no-strings-attached phone call to explore that possibility.
This article is intended for informational purposes only, and should not be considered financial or legal advice. You should consult a relevant professional before making any major decisions.