Why smart, experienced consultants still have pricing head trash

Speaker 1 0:02

Why can't I just say the word? Why can't I say this is going to be like $30,000 I just can't. I can't say it.

Leah Neaderthal 0:12

Welcome to Smart Gets Paid with me, Leah Neaderthal. I help women run more profitable consulting businesses, getting more of the clients you want and getting paid way more for your work without sacrificing your time, but I've never been a salesperson. My background is in corporate marketing, and when I started my own consulting business, I learned pretty quickly that it's about 1000 times harder to sell your own stuff than it is to sell someone else's. So I taught myself how to do it. I turned it into a methodology, and now I teach that proven methodology to my clients. So whether your consulting contracts are $10,000 $100,000 or more, if you want more clients you love, more work you love, and to get paid more than you ever thought possible, then you're in the right place. Let's do it together. Thanks for tuning in, and don't forget to rate, review, and share. Hey there, Leah here, and thanks for tuning in. I hope wherever you're listening to this, wherever you are right now, I hope you're having a great week, making some good progress in your business, and taking some time for you. So you might hear that I've got a little bit of a head cold going on, and you know everyone talks about how, like with kids, they talk about how at the start of the school year everyone gets sick, you know, kids are back with a lot of other kids. They're getting their germs. They bring them home, etc. Right? Like everyone talks about that at the beginning of the school year, but no one's talking about the summer camp thing because now kids are with a whole new set of kids and a new set of germs, and so there's a whole other wave of germs coming into the house, and you know yada yada yada. Now I'm sick, right? So anyway, thanks for understanding, and thanks for still listening. So now we go from head cold to head trash, and I want to talk about something today that I think is going to feel uncomfortably familiar to you, and that thing is pricing head trash. Now, if you've been listening for a while, you've heard me talk about head trash before. It's that voice in your head or that feeling you feel that sort of gets in the way of you doing the thing that you know you should do, or even the thing you might be doing in that moment. It's the thing that says, like, when you need to follow up with somebody, right? It's that voice that says you're going to sound salesy, or you know when you think about posting on LinkedIn, head trash is that voice that says if you do that, you're going to look desperate, right? All of that stuff, and even beyond business development, I mean, head trash is there. I mean, think about like when somebody doesn't text you back in what feels like you know a reasonable amount of time, head trash is the voice that says they're probably mad at you, and you know on and on and on. We all have our own version of head trash in our business and in our life. And when you're running a business, there's a specific category of head trash that's especially insidious. It's head trash around pricing. It's that thing that comes up when you sit down to write a proposal and head trash pops up to say, "Oh, there's no way they'll pay that much. Or when you're pricing something and it rears its ugly head and says, "You know, are you really sure you're worth that much? And pricing head trash is everywhere. It affects all of us, even if you've done a lot of money mindset work, and even if you've been in business for years, it can still slip through the cracks. And that's what you're going to hear today: real examples of pricing head trash from real women just like you. Because I think it's important to know that you know, one, if you have your own pricing head trash, and we all do. Then you're not alone. But two, it's important to see that you can look head trash right in the face. You can call it out for what it is, and you can find healthy ways to move past it.

Leah Neaderthal 3:54

So in this episode, you're going to hear two real conversations from inside our group coaching calls in the academy, and I want to take a second to tell you, you know, just what those calls actually are, because I think it's important context for what you're about to hear. So, in the academy, we don't just teach you strategies about how to get clients and then send you off to figure it out on your own. Every week, we do live group coaching calls where you bring your real situations, the actual clients you're selling to, the specific you know conversations that you're navigating, and the exact sticking points you're hitting, and we work through them together in real time. It's this real time sales coaching that's really, really valuable. So you're not just learning theory and strategies that only exist in a vacuum or on paper. You're getting coaching on your business, your specific clients, your specific numbers, and your specific situations. And one of the things we do a lot in those calls is we spend time untangling head trash, because sometimes you just need someone to help you see what's actually going on and hand you the keys to really unlock this situation. That's what these calls are for, and honestly, it's one of the things that makes the academy different from a lot of other programs and courses, and you know AI out there. Like this real time in the room coaching on the situations you're actually facing. So today you're going to hear two clips from two different calls, two different women, two different businesses, and two very different flavors of pricing head trash. And what's interesting is that one of these women is running a million dollar business, the other is working on closing a $30,000 engagement. Like they're in two different situations, and they're both stuck in exactly the same way: pricing head trash. Because that's the thing. I mean, pricing head trash doesn't discriminate. It doesn't care how long you've been in business, or how much you've made, or how much mindset work you've done, or how many checks you've written at bigger numbers than the one you can't say. Right? Head trash finds you anyway. So here's who you're going to hear from. The first woman is a consultant to tech CEOs. She's been running her business for four years. She spent years as a senior tech leader herself at startups and Fortune 500 companies, and she's been, you know, in those roles. She's been on the other side of the table. She's hired consultants. She's approved the invoices. She's written the checks, and yet when it's her number, when it's her ask, she's stuck. She just can't say it. The second woman you're going to hear from provides operational support for nonprofits. She's been in her business for six years, and she's been building out a new service that bundles several functions to give her clients a new type of support. And in this conversation, she's working through how to price that new offer. And what's getting in her way is something that comes from the world that she comes from, which is nonprofit. But I just have to say, I'm hearing her same narrative from a lot of women who feel strongly about social justice, mission-driven businesses, etc. And it sounds like this: when you've spent your career in that world, you sort of internalize a belief that you know every dollar spent on anything other than the mission is $1 taken from the mission, right? That spending money, or you know, as a consultant, like asking nonprofits to spend money on you, is almost like a moral failing, and when that's baked into how you see money and running your business, then charging a premium for your work can start to feel like you're taking, or as you're going to hear her call it, it starts to feel extractive. Now, these might not be your exact situations. You might not work with nonprofits or mission-driven businesses, or you might not be stuck on a specific number, and that's fine. I just want to caution, you know, don't be that guy who's like, you know, it's not exactly me, so it doesn't apply to me. The point isn't the specific number or the specific industry.

Leah Neaderthal 7:50

The point is to see how pricing head trash works, how it shows up, how it sounds, and what it feels like from the inside. Because you probably have your own version. I know I have my own version, and the more you can recognize it in somebody else, the easier it is to catch it in yourself. So, two women, two different situations, and one shared problem: pricing head trash. I want to send a huge thank you to both of these academy members for allowing me to share these calls with you. So, take a listen, and at the end, I'll come back and share a lesson you can apply to your business.

Speaker 1 8:23

So the situation is, I have a client that I did a retainer for that actually started with $500 and then went to $8,000 Like I gave them different options and they chose the biggest one, so that was fantastic, and that was like one of the first ones that I put the money out there and I felt good about it. When the engagement started, it actually right away went a very different direction, which I was like, "This is not the scope, and then turned into like eight different priority areas that they need to work on to make their department more efficient. And I did the first training with them, which went really well, but then there's like seven other kind of areas of efficiency that can be worked on with them. And I met with her this morning, and I was like, "Listen, I just want to review these with you because I want you to tell me if you don't need these. I was like, "But this scope of work is very different than what we agreed upon, and I want to know are there people within your organization that it could actually do these, because the price tag for this new work is going to be much bigger. So I was trying to like almost give her an out, also a friend, and she was like, "I don't have anybody, and I've got budget right now, so just tell me what kind of money you want. Why can't I just say the word? Why can't I say this is going to be like $30,000 I just can't. I can't say it. I'll put it on paper. Why do I struggle with that? I have thoughts, but just practice saying it here. You're not bracing her for this, you know. Just like say $30,000 Yeah, you want to just. Tell us, we're your committee. Okay, great. Hi, you guys. It's going to be $30,000 Can I say one thing that I hope I deliver this in the right way? $30,000 is not that much money. I know that too. And why do I think that's so much money? Of course, you have a hard time saying it's $200,000 you know, but like $30,000 is like companies spend that, and I've spent that at companies. Why is this a struggle for me? I know it's worth it. I know it's going to be a lot of work.

Leah Neaderthal 10:33

I think we can choose any number of reasons, from you know how your parents might have talked about money in the past to your experiences in your very first job to any number of things. Why do you think it's so difficult?

Speaker 1 10:49

Yeah, I think because I haven't done a lot of big, like they've always been smaller. The retainers certainly add up to it, but when it's a retainer and it's a monthly, then it's like 5k a month, 10k a month, but when you just give them one big number, it just feels big and it feels like a lot. And maybe there's a worth issue. Maybe I need counseling. You're laughing

Leah Neaderthal 11:11

because you all agree. No, raise your hand if you've been there. Raise your hand if you are currently still there. Sometimes, right? Okay, let me offer a different way of thinking about this. So, 30 seems big because you're coming from five or eight or whatever. Right. You're sort of going up. One thing I learned from my trainer, actually, which is very relatable to business, is that did you know that stretching is a neurological issue first? So, let's say you you reach down to your toes and you can't touch them because your body is pulling you back. It's actually not about your tendons. Your body is pulling you back because your body does not feel safe, like you know, allowing you to make this movement.

Speaker 2 11:53

Yeah.

Leah Neaderthal 11:54

So that's why if you've ever been in physical therapy, they'll say like, okay, push, push, push against my arm or whatever because it's training your not your muscle; it's training your brain to believe that like this motion is safe. Okay, it's a neurological thing first. Same thing with like business and numbers and stuff. I was reading a story of a woman. This is very relatable to probably all of us, but she was at a some sort of business retreat, and like the person was like, "Write down your goal. And she wrote down the goal, and then said, "Double it and write it down. And she's like, "I couldn't even do that. And then it's like, "Okay, double it again and write it down. This was just between her and a piece of paper, but she couldn't even write it down because neurologically she wasn't ready for it. Does that make sense? So I should just practice writing it down. Okay, yeah, you should practice saying it, but don't practice saying $30,000 Practice saying the price is $100,000 the price is $120,000 the price is $140,000 all the way up, right to like $200,000 I promise you, if you do that for a few days, when you say $30,000 it's going to be like,

Speaker 3 13:02

yeah,

Leah Neaderthal 13:03

what?

Speaker 1 13:04

Instead of counting sheep at night, this is what I'm going to say.

Leah Neaderthal 13:08

Can I tell you that I do this when I walk my dog? I talk about my goals,

Speaker 1 13:12

yeah,

Leah Neaderthal 13:13

and I double it, and then I double it again, or whatever. Because by the time I get up here, yeah, this goal where I actually am feels like no big deal. I love that because instead of working up to it, work down from it neurologically. I love that.

Speaker 1 13:30

More on how to beat pricing head trash after this. What about my tendency to over justify? So, like, I'll send you an ROI document. I'll send you like everything to prepare you. Should I really? Because I reviewed the details with her this morning. I should really be able to say, "Hey, here's the details we covered this morning, and it's $120,000. You know, tendency to over-explain is, or like bracing them for it, or whatever. Just remember that, like you're worried about how they're going to think about this,

Leah Neaderthal 14:04

but you are going to teach them how to think about it.

Speaker 1 14:07

Okay,

Leah Neaderthal 14:07

like you have a lot of control over that, right? So how you approach it is how they're going to take it. So if you're like, and here's the ROI document, and it's $30,000 is that okay? And I can talk to you're creating the reaction. Where if you're like, okay, I put it together and I have two options, one of them is 30 and one of them is 50, and let's talk about which one is right for you, also teaches them something.

Speaker 1 14:30

Yes, yes, yes.

Leah Neaderthal 14:33

So it's

Speaker 1 14:33

in your control.

Leah Neaderthal 14:34

What was that? I love that. Did you guys see that?

Speaker 1 14:37

This was my power pose. Yeah.

Leah Neaderthal 14:39

So I think reminding yourself that you're afraid of your reaction, but you have the ability to create the reaction.

Speaker 1 14:45

Yes, I love that.

Leah Neaderthal 14:48

So that's the first flavor of pricing head trash, and I want to just pause here for a second because what you just heard is something I want you to hold on to. This idea that getting comfortable with bigger numbers is. Neurological, not just mental. All right, we're going to come back to that at the end, and I'm going to give you something specific you can do with it. But first, I want you to hear the second conversation. Same problem, you know, pricing head trash, completely different form. This woman has been in her business for six years, and she provides operational support for nonprofits, and her pricing head trash doesn't show up as a number she can't say out loud. It shows up as something deeper. This feeling that charging her clients makes her part of the problem. All right, take a listen.

Speaker 3 15:34

So here is the thing that's on my mind: is how we should price things in general. I know what your answer is going to be, but like traditional approach to professional services firms is that you want 20% to go to overhead, 20% to profit, and the rest of it goes to cost of goods sold. Where this approach is value based, we're going to do like these huge contracts. I think with you know a good $10,000 a month recurring per client to do their accounting, to do their HR, to be their operations, to be their back office service, and I'm not sure how much. Where is that balance in terms of you know here is market rate if they were to go to an accounting firm and were to go to an HR firm and were to hire these six different you know services to take care of all of those things, and they're going to struggle. And the true value of what we're providing is immense. But part of what they're getting is the economy of scale, the lessons that we've learned from others, et cetera. And I also don't want to overprice and gouge just because I can. I want to make good money, and I want to charge enough to be generous. I'm listening. I'm learning. I want to have enough money to be able to innovate. I want to send my kid to college where she wants to go. Like there are things that I really want to be able to do, but I also wonder: Do I need to be netting 1000s of dollars per month per organization. So I just I'm kind of struggling on that value based pricing concept on the monthly recurring services that are really three quarters of it. It's not consultant. There's a consulting layer in there, but most of it is that high quality transactional, well oiled machinery

Leah Neaderthal 17:24

by people that you pay

Speaker 3 17:26

by people that I pay. Yes, six employees now, including myself. We have half a dozen contractors. We're a million dollar business right now. I want to be a $15 million business. So, what should we charge? What should be our kind of ethos around that?

Leah Neaderthal 17:41

Well, I think that you know one thing to remember is anything that you charge now, you don't have to charge that forever. You know, you could have like founder rates or you know early whatever rates. You know what I'm saying? To use it to fund your testing effectively. You know, you could say I have a feeling that your people do sort of good time tracking. I don't know. You strike me as somebody who like has that built in, you know, tracking everything, and so gather some data around utilization, and then see if your hypothesis was correct. You know, on like with what you're charging now, are you making a profit? You know, I also think that there's tremendous benefit for them to not have to manage three other vendors. You're not just delivering the service. You know, you're saving them a lot of headache and time and all of that. And not every client's going to be your client for this service, right? So if you're like, "Wow, this is like sort of at the upper end of what I'm comfortable charging, some people will say no, but it means that the right people, like when they say yes, you know, they're going to like use you in the right way, value you in the right way. Does that make sense?

Speaker 3 18:48

It does, yeah, for sure. And so I think that makes a lot of sense. And that once we can figure out what it is that we actually want to charge when we get into it, and who we want to work with when we get a little further down the road.

Leah Neaderthal 18:59

Well, it may be the case that not everything's also going to be ready on day one, perhaps, and you're going to be building new capabilities.

Speaker 3 19:07

There'll be modules that people can add on. So we we really want the full vertical, if you will. So like, there are a lot of pieces that people could add on, and I want to be of value and very profitable. I don't want to be cheap either. I want to charge a good rate, but I also don't want to price myself out to the point where people don't want it or where I'm part of the problem and like just too extractive too. I think what I want to do is provide a lot of value. I of course watch smart gets paid as like a model for how to do a lot of these things. So, like pack it full of value. I just still have a little bit of that head trash that I need to get rid of. But I think as I go through it, then I want to be able to create an institution. I want to change how these things are done. Instead of just having a small business, and so we need the dollars to be able to do that work. I'm having to go ask for those investment dollars instead of taking out a home equity loan or something, right? Like it's better. But if I had, you know, the big cushion, it would allow us to continually innovate and figure out new things that are of benefit to our clients in the community.

Leah Neaderthal 20:23

Yeah, I'm glad you called that the head trash. Only because what I hear, if I could just sort of play it back, like every time I hear you talk about charging a lot, it's always paired with a comment about extraction and like doing it without integrity. So I always hear a profit message paired with a extraction message, and you can be premium without being extractive, and it's okay to be premium. Extractive is like how much money can I get with giving the least, right? Without regard for the scorched earth that will be left behind, right? That's extractive. Premium is we deliver an incredible service, and this is how much it costs. And we're not for everyone, but for those people who are the right people, we do an incredible job.

Speaker 3 21:16

And thank you. That's bringing up a lot of emotions, actually. And I try to remember some of the things that I pay a god awful amount for. There is a chocolate chip cookie that I love, and it is $5 And I will gladly pay. I'm happy to give them my card every time I buy one of those cookies. And you know, I could buy 20 cookies at the grocery store for $5 and it's it is worth it. That cookie, right? I have my iPhone. I have my MacBook. I have my, you know, the things that I value that I am happy to pay for because I get a lot out of those experiences, and I think that people see us like that as well. And I want to pay my people well. I have great, great people, and I am not paying them at the level that they deserve to be paid. For some reason, they've accepted the job, but also we don't have the profit margin yet to be able to do that.

Leah Neaderthal 22:15

You're building something. You really, I mean, you are like building a whole new business. And I think just reminding yourself of you know what is premium and what is extractive, and those are not the same thing. I think will could go a long way in sort of quieting that head trash.

Speaker 1 22:34

That's so helpful for me to hear too. I just feel like if you are working in the nonprofit space, it is so easy to not be able to fully hear that.

Leah Neaderthal 22:46

All right, so let's talk about what just happened in there, and I always like to pull out one lesson that you can apply in your business. And today I'm going to give you something concrete you can do, even starting right after you listen to this episode. But first, I want to say something about what these two conversations had in common, because I think it's you know worth shining a light on. One of them is running a million dollar business. The other is at a place where a $30,000 engagement feels huge, and both of them understand pricing. Both of them have done work on money mindset, and both of them are stuck in exactly the same way. And that's what pricing head trash does. It doesn't discriminate. You know, no matter how long you've been in business, or how much you've made, or how much money mindset work you've done, it will find a way in. Usually, when you least expect it, and that's not a sign that something's wrong with you. It's just the reality of running a business, which is why I want to give you something that you can actually do when it happens. So, in that first conversation, you heard me walk through this idea that getting comfortable with bigger numbers is neurological, right? Not just mental. And the technique I shared with her, I want you to try it too. So, if you want to raise your prices, or you know, just generally go bigger in what you're getting paid, here's what I want you to try: don't practice saying your number. Practice saying a number that's bigger than that number, like a lot bigger. You know, so if you're working on saying $30,000 or it costs $30,000 like the woman you heard from here, don't practice saying $30,000 Practice saying $100,000 $150,000 $200,000 and. and on and on. You know, say those numbers like out loud in the car, on a walk, wherever. And here's why this works: it's not a confidence trick; it's a neurological technique. Your body and your brain treat an unfamiliar number the same way your body treats an unfamiliar stretch. It sort of pulls back, not because you can't do it or your body can't do it. It's because it doesn't feel safe yet. And the way you make it feel safe is the same way that a physical therapist trains your body to move differently. You go past the range you need so that when you come back to where you actually are. It feels easy. Feels like nothing. So try this: think about a client you're talking to right now, or some hypothetical future engagement, and say the price out loud. Again, not the price you're planning to charge. Say a bigger one, and then bigger than that, and then see what happens in your body when you say it over and over. And you can do this with your overall business goals too. You know, like what would it feel like to say out loud, "My business made $500,000 last year, or 750 or "We're on track to hit a million, or "We hit $2 million last year. Even if those numbers are, you know, above where you are right now, like that's the point. Say them anyway, because here's the truth: you can't achieve something that you're not neurologically ready for, and until you're ready, your brain and your body will find ways to keep you below that level. The author Gay Hendricks named this phenomenon in his book The Big Leap. He calls it the upper limit problem, which is this idea that we all have this invisible ceiling on what we believe we're allowed to have, or allowed to make, or allowed to say out loud, and when we get close to that ceiling, we unconsciously find ways to pull ourselves back down. And if your pricing head trash looks more like the second conversation you heard, where charging a premium feels like you're taking something away, the move is different, but the principle is the same. You have to name it for what it is. You know, not a moral truth about who you are, just head trash. The belief that being well paid and being of service are in conflict isn't a fact. It's just a feeling, and feelings like muscles can be retrained. So pricing head trash is insidious because it doesn't announce itself.

Leah Neaderthal 26:42

It doesn't show up and say, "Hi, I'm here to hold you back today. It just sort of slips in through the cracks, and the only way out is to go past it, not up to it. And before I let you go, I just want to name something: head trash. It's not a thing I made up. You know, you can get information about pricing, mindset, and head trash anywhere. You can even ask AI, and it can tell you that your pricing head trash exists. It can give you a list of tips, right? But it can't give you this-the experience of hearing somebody else's head trash firsthand and having it shine a light on something in yourself. And you know, sometimes even in these calls, the biggest aha's don't come from when you bring your own situation to the table; they come when you hear someone else's, and that's what I hope happened for you today. And that's the thing that's irreplaceable about doing this work with other people. So become expansive, practice saying bigger numbers, be in community with other women who are working through this stuff, and you know, watch what happens to the number that you actually are able to say. So, if you had an aha or an insight from what you heard in this episode, please post about it and tag me. I'd love to know what resonated for you. And of course, if you know someone who needs to hear this, please pass it along to her. All right. Thanks so much for listening, and I'll see you next time.

Transcribed by https://otter.ai