Your time, energy, and money are valuable, but many people struggle to assign a dollar amount to each. Creators running crowdfunding campaigns often need help deciding what to offer backers and how to price each reward level. 

Janene Liston helps her clients build value and know what and how to charge their customers confidently. She reminds her clients that having a profit mindset in their businesses makes them smart, not greedy.

Janene is a Certified Pricing Professional, experienced in value creation, and a European Public Speaking Champion. She believes each person possesses the wisdom they need to thrive in life, but sometimes they need help tapping into it. This belief led her to “pack up” her pricing experience to step out of the corporate world and into the entrepreneurial world.

When I interviewed Janene, I asked her about pricing crowdfunding campaigns. 

Why is pricing products and services so difficult?

Thomas Umstattd, Jr.: For many creatives, pricing their products and services is the hardest part of launching a Kickstarter campaign or Patreon page. Why is choosing a price so hard?

Janene Liston: First, it’s difficult because people fear rejection. For some reason, we attach that rejection to our personal value and worthiness, which brings up baggage from our growing up years. It can be very uncomfortable.

Second, most people simply don’t know how to choose a price. They believe there is a specific method to follow, but they don’t know what it is. If they do choose a price, they often feel uncertain about whether they’ve chosen correctly. 

Thomas: It’s particularly difficult for people who are offering a service. For example, a photographer who’s been taking photos for free will find it difficult to start charging. When they do set up a fee schedule, they often charge too little. 

It’s hard to know what your time is worth, especially for people who struggle with their self-worth. Choosing a price point is more psychologically challenging than choosing a logo or writing copy for the page. 

How do you know if you’ve priced yourself too low?

Thomas: Whether you’re running a business or creating art, people often price themselves too low when they’re starting out. What are some signals that you’re not charging enough?

Janene: It is a common problem, and there are several signs that you need to adjust.

Customers Tell You

If your customers tell you, “You should be charging more,” please heed their advice. Your customers know the value of what you’re offering. 

Thomas: Sometimes they’ll use different wording and say, “Wow. This is a great deal!” If people always talk about your product’s price as a “deal” or “steal,” you may be priced too low

Spinning Your Wheels

Janene: If you feel like you’re working hard but making little progress, you probably need to charge more. For example, if you have loads of customers but you’re having trouble meeting your financial goals or needs, you’ve probably priced yourself too low, particularly for service-based businesses.

For product-based businesses, if you’re delivering more value than your competitors but are still priced lower, you’re not operating with a healthy or profitable pricing strategy.

Thomas: You might think you could put your competitor out of business with that strategy, but you’re more likely to put yourself out of business because you run out of cash.

When I launched my first Patreon page, we had $2.00, $5.00, and $8.00 levels. The first 15 people to back the campaign chose the $8.00 level, which told us that we priced that level too low. It was supposed to be the luxury level that only a handful of people would want. It was a limited level, and it sold out. 

We ended up hiding that level on our page so that new backers couldn’t buy that level for that price. Then we copied the level and raised the price to $20.00. That way, the people who backed at $8.00 still got the benefits for that price, but new backers at that level would pay $20. 

It was a hard lesson learned, and we left a lot of money on the table by pricing it that low. We just didn’t value what we’d included in that $8.00 level. 

Price Point Positioning

Janene: How we position prices next to each other on a page says something. 

There was a famous example of a newspaper that started offering online publication. During that transition, the paper priced the print subscription at $80, the online-only version at $125, and the print and online versions combined at $125. Their pricing strategy was to push people to buy the combined subscription.

If they had priced the combined subscription higher than the online-only, people would have gravitated to the cheaper online-only version.

Thomas: One of the advantages of having multiple price points is that you create a market. You can influence which package people choose. 

Some people have a worldview that dictates they only always buy the cheapest option, while others only buy the most expensive. But most people are looking for the option that provides the biggest bang for their buck. 

Make your most profitable level the most attractive level. Patreon backers don’t support people just because they want the rewards. They back campaigns because they want to support creators. Some folks forego the rewards and simply donate to support the creator.

What is price anchoring?

Thomas: What is anchoring, and why is it important for pricing?

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