Every individual on the planet wants to get paid what they are worth, maybe even a little bit more. Which begs the question - how do you find this out? As a video producer, I may base this off of years of experience or the amount spent on equipment or increase based on a niche I have more insight than production house serving. This may be no different than a doctor or therapist's pricing strategy. Now that prices of everything are increasing, it's common for businesses to push their increased overheads onto their consumers which is resulting in consumers being more discerning than ever before.
If you are a small business owner or run a private practice, you need to know about the 70% capacity rule to keep from alienating your customers. This is a rule developed by Leadwell to help business owners get to where they need to be to hit their growth goals.
What is the 70% Capacity Rule?
You may only prices when you hit 70% of the full capacity of your business.
That means if you are a therapist whose full capacity is 20 clients per week, and you have 14 active weekly clients, you can now increase your service fees.
This approach to determining your service pricing will help you find the price that consumers are willing to pay for your service. As you continue to become better at providing your service, you will continue to get mor referrals, get busier and make more money per service.
What if I don't hit 70% Capacity?
The 70% Capacity rule just as helpful before you hit 70% capacity. If you are finding it difficult to get to your 70% capacity, you have two options.
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Reduce the price of your services (you don't need to do this unless you started out delusional)
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Change the perception to increase its value
When it comes to increasing the value of a service, you need to know your customer incredibly well and know what they want and the language they use to want it. You can do this by asking friends to fill out a form with a few questions that would help you identify key information around selling your service. You can also look inward or upward.
Looking inward will help you determine your true value and how that may offer additional value to the service you offer. For example, my client is a pharmacist turned therapist and wants to offer mental health support services to frontline healthcare providers. Her journey gives her additional insight to providing a better therapeutic outcome for medical professionals because she knows what they deal with.
Looking upward is a visionary approach of thinking outside the box and one step ahead. Giving consumers a car when they've only ridden in carriage pulled horses like Henry Ford. It is taking insight and creating a new opportunity where there is no competition. You may get one or two chances in your entire life to do this so it's important to stay open.
Continue to Run like You're <70% Capacity
You may have to keep adapting your approach and your offer until you find something that sticks. Even if you are at >70% capacity, keep yourself open to adapting to improve the perception of your business in a way that continues to add value. It is also worth it or even mandatory to get more qualifications to stay current and licensed. The more you serve, the better you will get at knowing how you can improve your offerings and how to adapt them.
