The three money beliefs every service provider needs to know are the Pricing Paradigms™: Expense, Hustle and Investment. In the Expense Paradigm, money is limited by your time. In the Hustle Paradigm, working harder and getting better makes your time worth more. In the Investment Paradigm, money is created through value. They show up on both sides of every proposal, and they’re the foundation of the Package Matrix™ and the reason “charge your worth” backfires.
Do you ever worry about making sure your prices are “affordable”? Or say things like “my clients are small businesses or just starting out and they don’t have the budget”? Or think “I’ve got to make sure they get their money’s worth”?
Or maybe on the flip side you’ve thought “they have money, this should be a no-brainer for them.” Or maybe you’ve heard someone else give you this advice: “If they really want this, and if you’re good at sales, no matter what situation they’re in, they’ll come up with the money.”
If you’ve heard any of these things and believed that they’re true, or you spend a lot of time thinking about how much money your clients do or don’t have, or what they do or don’t do with it, you have what I call a Pricing Paradigm blind spot.
What is a Pricing Paradigm?
A Pricing Paradigm is your belief system about the way money and pricing work in the world. A paradigm is a belief system. It’s a way of thinking and seeing the world that’s formed over time by how we were raised, where we lived, who we were around and the media we consume.
For the past decade, I’ve had a behind-the-scenes seat to how service providers think when coming up with their pricing, and how their clients react and respond to the pricing decisions that are put in front of them. What I came to observe is that there are three very distinct Pricing Paradigms™ that define how people interact with money on both sides of a transaction: Expense, Hustle and Investment.
What is the Expense Paradigm?
In the Expense Paradigm, the amount of money you can make is limited by your time, and someone else gets to decide how much your time is worth. Because time is finite, money is finite. Once you spend your money, the only way to get more money is to spend more time, and you have a limited amount of time.
If you grew up like I did, raised in the Midwest by a single mom with three kids whose default answer to everything was “No, we can’t afford it,” then it’s very likely that you look at the world through an Expense Paradigm.
Your default operating system becomes: conserve money, spend time, even at your own expense, even if it costs you more in the long run. Money becomes more valuable than time.
What is the Hustle Paradigm?
The Hustle Paradigm says if you work really hard and get really skilled, you can increase the value of your time.
My mom would also tell me, “If you can figure out a way to pay for college, because we can’t afford it, you’ll be able to get a better paying job and your time will be worth more.” That’s where the Hustle Paradigm comes in. If you’re also really good at your job, work harder than everyone else, make sure everybody likes you and make yourself irreplaceable and indispensable, you’ll climb the corporate ladder in exchange for even more money.
The Hustle Paradigm tells you to work really hard, be liked and be the best, and if you are the best, you can make more money and charge more than people who aren’t as good as you. So you spend a lot of time proving yourself and differentiating yourself from the competition, and you get stuck in people pleasing and perfectionism.
The Hustle Paradigm is the trickiest trap because you’re so rewarded for good work, especially in corporate, but it becomes the golden handcuffs in your service-based business.
What is the Investment Paradigm?
In the Investment Paradigm™, money is not viewed as a construct of time at all. When you operate with an Investment Paradigm, you believe that money is created through value.
Value is the perceived benefit someone gets in exchange for whatever they’re giving up. The key word is perceived, meaning their own perception. They might value things that you don’t value. They are trading money for a benefit that they value, and that benefit is usually more time, more capacity, more impact, more freedom, more flexibility, more enjoyment, relief from mental and emotional stress, more money or whatever benefit they are seeking.
When you’re operating from an Investment Paradigm, you typically value time over money, and you’re willing to spend money to create more time or prevent wasting time.
Whether you’re operating with an Expense, Hustle or Investment mindset has nothing to do with how much money you actually have in your bank account.
How do Pricing Paradigms show up in your proposals?
There are always two Pricing Paradigms at play in every transaction: your Pricing Paradigm and your prospect’s Pricing Paradigm.
If you’re bringing an Expense Paradigm to your side of the transaction, you think money is more important than time and you worry about charging too much and taking too much from the other person. You worry because it’s hard for them to get more money, since they can only get more money if they have more time. You worry about their bank account more than your own, at your own expense.
If you’re bringing a Hustle Paradigm to the transaction, you’re thinking “I’m the value. They’re buying me and my skills, so I better make sure I’m the best value they can buy, and I better prove it to them too.” You usually end up undercharging and overdelivering in that instance too.
When you’re operating with an Investment Paradigm, you’re thinking “I offer something that can help them create more of what they want in these areas that are important to them. They’re temporarily parting with some of their money today, and it will be on its way back to them in the form of outcomes and results that they value. They aren’t investing in me. They’re investing in themselves and what they want through me. The value of them saying yes to this is extremely high, and the cost of saying no is even higher.”
Can you change your Pricing Paradigm?
Yes. Pricing Paradigms aren’t fixed. If you’re bringing your own Expense or Hustle Paradigm into your pricing decisions, your proposals and your sales conversations, you’re making less money than you could be making.
And you have way more influence on what Pricing Paradigm your client uses to make a decision than you might think.
So let me ask you this: is the way you think about money creating wanted or unwanted results for you? If it’s creating unwanted results, then it’s time for you to deconstruct your Pricing Paradigm and rebuild it in a way that helps you create wanted results.
Your next step
Want to charge more for what you're already doing, without working harder, changing your business model or finding all new clients? Sign up for the free Advanced Pricing Strategy Masterclass.
Are you a business coach or consultant who works with freelancers, consultants, agencies and other types of service providers?
What if you could help your clients close more proposals at higher prices without burnout? Through my Anchor High™ Certification Program, I help business coaches, consultants and group program leaders integrate my behavioral science-backed pricing and sales strategies, frameworks and methodologies into their existing business coaching programs and client work.
Learn more and request a zero-pressure info call with me here to explore whether Anchor High™ Certification is right for you.
