An Honest Look at the Impact of Choosing Low Prices For Your Offers

Settling on a price to charge for your offers can feel like both a numbers game and an emotional drain. While we often hear the advice to raise our prices, is that really the best way? In this post, we're going to analyze the pros and cons of pricing your offers low.

This post is a continuation of the Price Your Offer series.

Reasons to Price Lower

First of all, let’s discuss the reasons you actually DO want to price your offers on the lower-end.

Reason #1: It’s a “lower value” offer.

“Lower value” does not mean “no value,” however some offers are definitely more valuable (and worthy of a higher price) than others.

Sometimes, the offers we create are not a complete solution to a major problem our audiences face. Instead, they’re more of a quick relief, baby step, or simple convenience.

And that’s perfectly okay! If every offer were as robust as your flagship or signature offers, you probably wouldn’t have a sustainable product suite. Nor would you actually have a signature offer, if you think about it.

In addition to considering what your offer provides to your buyer objectively, it’s also worth noting that the market of similar offers to similar audiences should influence your decision. If similar products or services are sold for a low price point and you’re trying to justify a high-end price, you need to have a clear differentiator.

Reason #2: You want your offer to be accessible.

If your offer is meant to help the masses, then it needs to be accessible to the masses. Not everything is meant to be an exclusive, private club.

For example, I used to coach individual clients based on an application process to make sure that the people who fit the right criteria that I could serve best were the ones making that investment. However, I also have educational products and resources that I believe every entrepreneur should have access to in order to be able to do the bare minimum for financial wellness in their businesses. Those offers are kept affordable (sometimes free) and widely available for that purpose.

Certain types of products, like what I just described, and certain types of audiences warrant this consideration. You may need to seriously consider the accessibility of your offers if the audience you serve is made up of…

People who are new to a particular journey (such as new business owners or new hobbyists)
People whose circumstances you serve inherently mean they’re likely to have restricted budgets (such as college students or single moms), or
People who already face obstacles pursuing these opportunities (such as racially minoritized groups or people with disabilities).

Reason #3: You want to drive a higher sales volume.

Sometimes, your goal is to reach a certain number of sales, and not necessarily a certain dollar amount. If you’re specifically trying to reach a higher volume of sales for an offer, a lower price point may be the ticket to help more people be willing to make the buy.

Why would you target higher volume over revenue dollars? A few reasons could be…

Market Testing - If you simply want to gauge interest in an offer or the effectiveness of a solution you’ve put together, it may be better to have a larger sample size of data to pull from.
Social Proof - If you want to be able to generate case studies or testimonials to help you sell this offer in the future, you can incentivize people to give your newer or lesser-known offer a shot if the investment is lower.
Impact & Audience Building - Sometimes, a paid offer is actually a way of reaching a wider audience. It can be a form of marketing in itself, especially if we’re talking about a smaller offer that will pave the way for a bigger offer later on.

Excuses for Pricing Lower

As we’ve just established, there are completely valid and strategic reasons for choosing lower prices for your offer(s). However, there are also excuses that we are often tempted to use as justification for our underpricing that are limiting our success as business owners.

Excuse #1: You doubt the value of your solution.

Impostor syndrome strikes us all. But if you’re charging less for an offer because you think it’ll justify your uncertainty that it can help people, you’re going about it all wrong.

If a part of you doubts whether people will get results with your offer, then your duty is to address that through your offer and not your prices. Re-evaluate your methodology, find or generate the social proof, test your frameworks, do the external research, get the credentials - whatever it takes to prove to yourself (and thus, others) that you have a rock-solid offer.

Don’t think that just because you charged someone less for an offer that doesn’t work they won’t feel ripped off.

Excuse #2: You feel like you don’t deserve to ask for more.

I will be the first person to say that your worth has absolutely nothing to do with how much you charge for your products or services.

However, you are worthy of being justly compensated for the work that you do.

It can be hard to think about “deserving money,” and that’s because money in and of itself doesn’t mean much outside of whatever assigned meaning we’ve given it. So think instead about the things you would use that money for.

Do you deserve to want a roof over your head? Do you deserve to want food on the table? Are you allowed to want to sleep at night knowing you can pay your bills and maintain your personal security and lifestyle? Does your family deserve that right? Do you have a right strive to work in a non-toxic environment, pursuing what you love and helping people in the way you uniquely can?

(Spoiler alert: The answer is yes.)

Excuse #3: You’re assuming your audience can’t or won’t pay.

This one’s tough, because it’s hard not to project our own insecurities onto others. However, some of the best sales advice I’ve ever received is to never assume that the money part of the sales conversation is as awkward for them as it is for you. By assuming it will be awkward, you can make it awkward when it never needed to be.

In the same vein, 99% of the time, you don’t (and can’t be expected to) know enough about your potential buyers to know for sure if they can’t or won’t pay. But we have a tendency to assume their pricing comfort level based on our own feelings.

When we start letting our brains mess with reality, it’s important to get back to the data. Survey your audience to see how much they’d expect a particular solution (focusing on what’s in it for them when you ask) to cost. Take a look at the past buying behavior of your audience, and what offers of yours they’ve bought. Take a look at the price points of other business owners in your space who serve a similar target audience - if they’re able to run their business with those prices, why not you?

The Problems With Pricing Too Low

By following victim to any of the “excuses” above (or any others that may cause you to unjustifiably underprice your offers), you run the risk of:

Restricting your revenue potential - Charging too low, especially if it’s not enough to cover your costs, will leave you burnt out and constantly chasing more sales to keep up with your goals. And chances are, you may not ever hit those goals.
Creating a poor brand perception - When people see something priced too low, there first instinct is to ask, “What’s wrong with it?” While not always true, people are trained to pay more for quality, which also means that underpriced offers can create perceptions that your offers are inherently poor quality.
Attracting non-ideal clients/customers - I’m not one to justify high-end pricing just to exclude buyers arbitrarily deemed “unworthy” because of their budgets. However, by charging too low, you DO run the risk of getting buyers who don’t fully value you or what you have to offer.
Limiting buyer engagement or commitment to get results - Sometimes, a price tag for an offer ignites a client or customer’s motivation to fully commit to doing the work and getting a return on their investment. Without this sense of “buy-in,” they may not take your offer seriously enough or give it the attention it needs to create results, which is how you get the social proof and loyalty you need to continue selling this offer.
Perpetuates an unworthiness mindset - If you’re underpricing all of your offers and setting your business up under that model, then the sense of unworthiness that shaped your business will continue to show through every time you look at your offer suite. Sometimes, it takes that little leap of faith first to flip the script and help your mind see that something else is possible.

So, Should You Price Low?

In this post, we’ve looked at both sides of the low-pricing situation. As we’ve seen, there are perfectly valid and strategic reasons to price your offers lower. But we’ve also seen that there are many pitfalls and consequences to pricing too low for the wrong reasons.

By simply checking your motivations using what we’ve discussed, you’ll probably be able to tell where you land on that spectrum.

But if you want to dig deeper into both the financial and mental side of pricing, then click here to check out the other posts we have in the Price Your Offer series!

Are you ready to take your financial journey to the next level? Then you may be ready to check out the More With Money Academy!

This ever-growing collection of online courses and trainings are specially designed to support entrepreneurs like you on your path to financial wellness. The Academy contains carefully designed courses that are easy to understand and implement so that you can be empowered with the practical concepts, streamlined systems, and powerful mindset to transform your business and personal finances.

Click here to explore what the More With Money Academy has to offer!