Marty Nemko, Ph.D :
“How much should I charge?” I’m often asked that by clients who are or are contemplating going into private practice.
Of course, it varies with the situation, but I typically explain three philosophies of pricing and ask them to choose the one that feels right:
What the market will bear. That may seem heartless but an ethical case can be made for that. For example, if you’re in such demand that people will pay a high price, it’s usually your just desserts for your ability, hard work, and efficacy. Such practitioners often have more clients than they have room in their schedule to see, so an easy yet merit-based basis for selecting is to charge a high price. Of course, there are exceptions, but many people who have the money to pay a high price, have had customers or employers willing to pay them well; that is, these clients provided great value to them. Should not people who have provided great value be able to use some of their money to consult with an in-demand professional?
An advantage of charging top dollar is that the client’s making a significant investment in you may motivate them to work harder to benefit from your counsel.
A disadvantage of charging a high price is that it can reduce the client’s trust in you-S/he may wonder if you’re in it more for the money than to be helpful.
Another advantage is from a financial standpoint. Some clients incorrectly believe too uncritically in the saying, “You get what you pay for.” So, paradoxically, you may get more clients by charging more. Yet, in fact, we don’t always get more by paying more. One college president told me, “We always try to make our sticker price higher than our competitors. That way we gain not only money but cachet.”
The minimum. Recognizing that many people are low-income through little fault of their own-accidents of who they were born to and in what locale-an ethical argument can be made for charging the least you can, even if you must live a quite modest existence. Another advantage of charging the minimum, perhaps as little as $25 an hour, is that you’ve made clear that your priority is helping, not making money.
Moderate. Of course, there’s the middle ground: charging enough that you make a middle-class living but not so much that your clientele consists only of the wealthy.
Perhaps you’ll find it useful to know how I price. I’ve chosen the middle ground. That way, a wide range of people can afford to see me, and it suggests that I care more about helping than about making big bucks, yet I needn’t live on ramen and cat food,
Should you slide? The next question that clients often ask me is, “Should I offer a sliding scale?” Here, I typically offer just one perspective. Both from personal experience and from what colleagues tell me, too many clients who don’t really need a sliding scale, ask for a reduced fee just because the website says that a sliding scale is available. On the other hand, it’s wise to be charitable.
The way I strike that balance is by not offering a sliding scale, but when I sense it would be tough for a client to pay my full fee, I’ll voluntarily cut it, and more often, work with them for a session or two pro-bono and then offer them self-help next steps so they can continue to move forward on their own. Of course, that yields the side benefit of building their self-efficacy.
The takeaway
Candidly, I’m sad to see how often a private-practitioner client is more focused on the money than on maximizing their competence. So, please, do not let this post’s focus on the pecuniary distract you from the more important issue: continuing to become the best practitioner possible. In the end, that will both make you more helpful and likely to make more money.
“How much should I charge?” I’m often asked that by clients who are or are contemplating going into private practice.
Of course, it varies with the situation, but I typically explain three philosophies of pricing and ask them to choose the one that feels right:
What the market will bear. That may seem heartless but an ethical case can be made for that. For example, if you’re in such demand that people will pay a high price, it’s usually your just desserts for your ability, hard work, and efficacy. Such practitioners often have more clients than they have room in their schedule to see, so an easy yet merit-based basis for selecting is to charge a high price. Of course, there are exceptions, but many people who have the money to pay a high price, have had customers or employers willing to pay them well; that is, these clients provided great value to them. Should not people who have provided great value be able to use some of their money to consult with an in-demand professional?
An advantage of charging top dollar is that the client’s making a significant investment in you may motivate them to work harder to benefit from your counsel.
A disadvantage of charging a high price is that it can reduce the client’s trust in you-S/he may wonder if you’re in it more for the money than to be helpful.
Another advantage is from a financial standpoint. Some clients incorrectly believe too uncritically in the saying, “You get what you pay for.” So, paradoxically, you may get more clients by charging more. Yet, in fact, we don’t always get more by paying more. One college president told me, “We always try to make our sticker price higher than our competitors. That way we gain not only money but cachet.”
The minimum. Recognizing that many people are low-income through little fault of their own-accidents of who they were born to and in what locale-an ethical argument can be made for charging the least you can, even if you must live a quite modest existence. Another advantage of charging the minimum, perhaps as little as $25 an hour, is that you’ve made clear that your priority is helping, not making money.
Moderate. Of course, there’s the middle ground: charging enough that you make a middle-class living but not so much that your clientele consists only of the wealthy.
Perhaps you’ll find it useful to know how I price. I’ve chosen the middle ground. That way, a wide range of people can afford to see me, and it suggests that I care more about helping than about making big bucks, yet I needn’t live on ramen and cat food,
Should you slide? The next question that clients often ask me is, “Should I offer a sliding scale?” Here, I typically offer just one perspective. Both from personal experience and from what colleagues tell me, too many clients who don’t really need a sliding scale, ask for a reduced fee just because the website says that a sliding scale is available. On the other hand, it’s wise to be charitable.
The way I strike that balance is by not offering a sliding scale, but when I sense it would be tough for a client to pay my full fee, I’ll voluntarily cut it, and more often, work with them for a session or two pro-bono and then offer them self-help next steps so they can continue to move forward on their own. Of course, that yields the side benefit of building their self-efficacy.
The takeaway
Candidly, I’m sad to see how often a private-practitioner client is more focused on the money than on maximizing their competence. So, please, do not let this post’s focus on the pecuniary distract you from the more important issue: continuing to become the best practitioner possible. In the end, that will both make you more helpful and likely to make more money.
