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Balancing Compassion and Profit: Mastering Pricing Strategies for Success



Balancing Compassion and Profit: Mastering Pricing Strategies for Success by Heidi Holvoet for SOULACY Magazine

 


A goat, a monkey, and a donkey walk into a tavern, happily chatting and hungry for their dinner. One by one, they order their meal at the bar and carry their delicious-smelling plate to their favorite corner to eat. 


They’ve been foodie besties for a long time, always having fun together and bonding over food, they love a gourmet meal and often love the exact same things. Today is no exception, they each order the dinner special.


Something strange happens today though. 


The goat starts looking unhappy the minute she sits down. She takes a few bites, looks around uneasily, asks the waiter for some salt that never comes. She ends up not finishing her meal at all and tells the others it just wasn’t great. She would have loved the salt but then didn’t want to bother the waiter by asking a second time. “I’ll just order something else, hopefully tastier.”


The monkey takes many big bites from her meal, calling the waiter multiple times to ask for more salt, then the pepper, then some hot sauce, which he brings quickly but grudgingly. The monkey feels full after finishing half of the plate but insists on eating it all anyway. She feels uncomfortable afterwards, and craves a digestive tea, which she refuses to order.


The donkey truly enjoys her meal. It’s tasty, she enjoys every bite, savoring the smells and tasting every quality ingredient. The waiter comes and checks in with her a few times, and offers an extra plate of fresh berries that go so well with the main meal. When finishing her plate, the donkey has that delightful just-right feeling and orders a digestive tea for herself and treats her friends to one too.


That’s when they realize something strange has happened. They ALWAYS agree on how much, or how little, they like their food! They NEVER have such different experiences like today.


Looking for an explanation, they call the tavern manager and explain what’s happened. “Why were we served different dishes even though we ordered the exact same dinner special?,” asks Mrs. Donkey. 


She continues, “I myself loved my food and enjoyed the lovely service. Mrs. Goat didn’t enjoy her meal at all and couldn’t count on the waiter for support. Mrs. Monkey over-ate without very much enjoying the dinner experience, and got frustrated with the waiter over several of her requests.”


“That’s easily explained!,” replies the manager. “You see, you did get the exact same meal, there was no difference whatsoever between the plates you received. What was different though was the price you each paid for that food. And that explains both your sentiments and the waiters’ behavior.”


Instantly all is clear. Mrs. Goat had been charged a tiny amount and it made her suspicious of the food. She didn’t expect anything in terms of service, and the waiter didn’t feel like offering it. Not having spent much, she quickly dismisses the meal and starts looking for something else,  something “hopefully” better.


Mrs. Monkey, it turns out, paid a ridiculously high price. She was okay with it as she was in for a treat, a delicious meal and 5-star service. She quickly got disappointed with all of that, and even increased her own discomfort by forcing herself to eat it all. After all, it was too valuable to let it go to waste.


“I think you know you might guess how “right” Mrs. Donkey’s price was,” wrapped up the tavern manager. 


This fable beautifully illustrates the compassionate high-profit pricing mechanisms that I see as crucial in today’s global person-driven economy.

The Powerful Fusion of Compassion and High-Profit Pricing

When I talk about pricing with compassion, I mean we take into account the effect pricing has on the seller (provider) as well as the buyer (client). On a personal level, as well as professionally.  


I also talk about high-profit pricing in combination with compassion. One does not exclude the other. 


High profit most typically refers to monetary profit. But some pricing choices lead to a different kind of advantage for the seller: high-conversion. This can be increased visibility and reach, ability to share a message with the perfect-fit people, creating space (mind, or physical), and the list goes on.


Pricing with compassion does not mean pricing low so it’s accessible for all - we know Mrs. Goat did not enjoy her dinner.


Pricing with compassion does not mean pricing super high so it gives us, as providers, the most income - we can easily see why both Mrs. Monkey and her waiter were disgruntled.


Pricing with compassion does not mean pricing with a scarcity mindset (“must charge maximum” and “must spend minimum”). Quite the contrary. When done right, pricing with compassion creates abundance for both parties. Mrs. Donkey and her excellent waiter are a testimony to that.


Pricing “right” with compassion and for high profit or high conversion, leaves both parties with a sentiment of abundance, self-worth and appreciation. It’s the recipe for engagement, retention, and self/defined success on both sides.


The fable of the goat, the monkey and the donkey has its limits of course: the golden middle way price isn’t always the right one.


A cheap $4.99 how-to book may be the sweet spot for selling a million copies to satisfied readers.


An entry-fee $300/hour strategic business coaching session may create a first transformation for starting entrepreneurs who then easily become $10k/month clients, and generate $10k-months for their own business too. 


And a corporation seeking coaching for its leadership team may not get them around the table when spending less than $45k/person.


If you’ve ever bought or sold something, there’s a good chance you’ve been nodding in agreement as you read this. This is how pricing should be: honest, correct, and creating the right feelings both as a seller and as a buyer.


If you’re an entrepreneur you’ll likely have had the next thought as well:


How exactly do we decide on the ultimate sweet-spot price for a real-life offer?


I like to answer that question using what I call the Trinity of Pricing.


And I combine it with a soul-saving Keep it Simple decision mechanism. Because, life’s too short to spend it on endlessly pondering pricing.

The Trinity of Pricing

The Trinity of Pricing is an approach to pricing that’s biased towards value instead of money-only. It starts with the self - you, the seller. Next the Trinity includes the other - namely clients. And thirdly, we include well-researched and objective market value and trends because you don’t operate in isolation and it helps see your offer in a larger perspective.

  1. Your Worth

As a seller, you’ll start with a strong foundation of self-worth, understanding of the true value of your offer, the value of your and your team’s investments and costs, your personal and professional goals linked with this offer, and the use of all resources, human and otherwise, inside your company.


We can quantify many of these in absolute numbers, and that helps with anchoring as a first step. And results in many an eye-opening Aha-moment!


Of huge importance at this stage in the pricing process, time invested is a highly determining aspect of your investments. Not in the sense of “hourly wage” but rather the time it takes you and/or your team to prepare and create and also to deliver to your clients affects the ultimate value of the offer for you. 


Your pricing ought to reflect HOW you want to spend your time, and that is linked with your ultimate business goals as well as your current and desired lifestyle. With my clients, everyday joy in life NOW rather than “when I reach that faraway goal,” is the prime priority so how you spend your time while making that profit, is key.



  1. Your client’s perceived and received value

As the second arm of the Trinity, we dive into revealing the true value an offer has for the person who buys it. The person who invests, time and money, effort, physical, mental and emotional availability, in search of being helped by you (your services/products).


We talk about received and perceived value. What does a client effectively have after purchasing and perusing your offer? There are usually ways to express that in a set of monetary value numbers as well as in emotional, physical, relational, and situational outcomes. 


We know that, today more than ever, perceived value often is equally if not more decisive than value in absolute terms - remember how unhappy Mrs. Goat feels about her “cheap” dinner. How will a client feel after having purchased at such and such price? What are their expectations, and: are they what you can and want to provide?

  1. The market value

Lastly, the Trinity of Pricing also helps us include what we conveniently call Market Value. Contrary to more traditional pricing mechanisms, this aspect is not the most determining of the three. Still not to be ignored because it holds key knowledge. 


You don’t need to charge similarly to what others in your industry charge for similar offers.


You’re not necessarily under-charging or over-charging if you deviate from what’s generally expected.


You will want to know what’s out there, what people are used to and have come to expect. That helps you gauge what’s reasonable, what determines the perceived value of your offer based on the price tag you choose for it, and how you want to position yourself on the market.


In this way, pricing can be an element of your whole-business Blue Ocean Strategy as well, driving innovation and client delight.

Wrap-up with this Soul-Saving Decision Mechanism 

Pricing with compassion and for high conversion requires going through the above process with diligence. It takes some deep delving yet it doesn’t have to take up a lot of time. The Trinity of Pricing helps us include all that’s needed to get to the “right” price and we come out with a price or a price range that feels right, and does right (i.e. profit and/or conversion).


You come out with more than that, though. Through the process, you gain priceless insights, understanding about yourself, your business, your clients, and your industry’s market. Knowledge that you will also apply in other aspects of your business.


When decision time comes, my final and soul-saving advice is: keep it simple.


Yes, you’ve just gone through a deep process to help value your offer. You may have come up with the ideal price tag right away, or you may have a price range (which can be quite large).


Keeping it simple means that if you have a specific price, great! Go out, use it, and measure how your offer does. Re-evaluate and adjust as necessary. 


Keeping it simple also means that if you’ve got a price range, trust your intuition and choose a price inside the range. It’s within the range so it’s a price tag that fulfills the requirements of the Trinity - it’ll suit your lifestyle, time and other investments, and how you want your clients to perceive your offer. Sit with your chosen price, and be honest with yourself:


If you’d feel any sort of grudge delivering at this price, it’s probably too low. If you feel you’d have to give/offer/do more than you want to, it’s probably too high. If you feel you’d be delighted and excited to deliver to this client paying this price you’re probably very close to the “perfect” price. Now to go out and offer at this price. Observe and see how it goes. Re-evaluate in the next round if necessary.


Pricing with compassion and for high profit is one of the most valuable things you can do in your business: it serves you and the people you’re here to serve with respect for every person involved.



 

TLDR: Discover the art of compassionate high-profit pricing, a strategy that balances the seller's and buyer's well-being, leading to mutual satisfaction and success. Learn how the Trinity of Pricing—considering your worth, your client's value, and market trends—can guide you to set prices that honor both parties and drive high conversion or profit.


 

Heidi Holvoet, PhD, is a strategic business coach for ambitious women entrepreneurs ready for their business to truly serve them: with high profits and without devouring all their time. She is compassionate, authentic, and unapologetic about money. Entrepreneur in heart and soul, Heidi was a nuclear physicist in academia, financial training consultant in corporate, and an award-winning author and baby sleep consultant in her own company, all while training and gradually fulfilling her mission as a strategic business coach.




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