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The Perils of Undercharging

underchargingLisa runs a solo massage practice in Brooklyn NY. She puts her heart and soul into her work and cares very much for her clients. Although she started about 5 years ago, she was still struggling financially, and recently had to take on a part time job, because she simply does not charge enough for her services.

But Lisa’s finances are not the only things that are hurting, as undercharging also effects her own feelings of self confidence/worth, her brand and her ability to take charge of her business and her life.

When we first started to work together about a year ago, she was very discouraged, not just financially but emotionally as well. It was draining to put in all this work, all this effort and not be able to support herself without taking on another job.

I urged Lisa to research the going rate for therapeutic massages services in her area. No surprise, she was at the bottom of the market. Although Lisa recognized that she had to do something about it, she was very reluctant to do so.

Lisa rationalized that the market that she catered to didn’t have enough money, that she just didn’t attract clients that would/could pay more. But part of the reason she had so much trouble doing this, was because she didn’t feel worth it inside.It was difficult to get her to stop undercharging even though she knew there was no good reason to do it.

We took a multifaceted approach which included tweaking her marketing, sales and pricing strategies as well as working with her own inner feelings, building confidence, and challenging some long held beliefs.

It took a bit of work, but today Lisa is reaping the rewards of her efforts. Her income increased 34% last year, she was able to quit the part time job, and is on target for an even greater increase this year.  But more importantly, she feels better about herself, her business and her life, and now is enthusiastic about going out and marketing her services.

Are you guilty of undercharging? Join the conversation below.

My Small Business Profitability Program will teach you how to charge what you’re worth and get it.

risa johnson January 14, 2015 at 11:40 am

It took me 5 years to raise my prices to middle of the market from low end. I still am having trouble negotiating cancellation policy issues.

Susan Martin January 14, 2015 at 12:52 pm

Hi Risa, Congrats on getting to middle of market, cancellation policy is a great next step! What have you tried so far?

susan January 14, 2015 at 3:06 pm


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