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The Psychology Behind Premium Pricing – Why It Works

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In this blog post, I dive deep into why premium pricing is so important when you are a service provider or a coach.

Let’s paint a picture.

Imagine having consistent 10k months, working very few hours every week, and attracting your dream clients without any effort, who are super excited to work with you. You have finally space and time to learn and become even better at what you do and additionally, you can finally take Fridays off and spend long weekends with your loved ones…

Sounds dreamy, right? But it’s actually totally possible.

This blog post is perfect for you if you…

  • have been feeling completely exhausted and almost to the point of a burnout
  • You are swamped with too much client work all the time that don’t allow you to work on growing and scaling your business
  • You feel like you have to take on more and more clients in order to hit your income goals (aka being even more swamped)
  • You feel like it’s very difficult to attract your ideal client
  • You’re attracting pain-in-the-*** clients who aren’t putting in the work, always pay too late, and blame you for not providing the transformation you promised.
  • you’re feeling unaligned
  • You feel like your clients underestimate and don’t appreciate the value you provide

If this is you, then you’re in the right place, my friend.

I mean, you became an entrepreneur to have more time and freedom in your life, right?

So, being stuck with this huge load of client-work that seems to never ever end, is just exactly the thing you wanted to avoid…

However, the way to transform your business and make it more aligned, spacious, and fun to run is actually so freakin’ simple: RAISE YOUR GODDAMN PRICES.

premium pricing

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Reason #1: With premium pricing, you are attracting clients that take their transformation seriously

The higher the price of your services, the more ‘serious’ clients you will attract. These are the kind of people that are willing to put in the work and are committed to their goals.

The high prices they paid also work in their favor as well since it functions as financial accountability, that will motivate them to put in the work, because otherwise all this money they paid you, is just wasted

When you have set low prices for your services, you might attract those clients that aren’t really willing to go that extra mile and won’t get the best results they potentially could. And often, they will blame YOU for that.

Reason #2 : You are able to take on fewer clients

When you raise your prices, it allows you to have a higher income with a smaller amount of clients. So, this allows you to have more spaciousness in your business.

You can actually provide much better service since you aren’t completely overwhelmed with too many clients at the same time. It gives you the opportunity to provide more energy and value to your small group of clients.

In other words, when raising your prices the focus shifts from ‘quantity’ to ‘quality’.

Additionally, premium pricing also pushes you to go the extra mile and makes your services even more valuable, so it justifies the premium price.

Reason #3: People tend to perceive your services as more valuable, automatically, with premium pricing

And believing this is so important because it creates the self-ful­filling prophecy effect so that the client truly starts experiencing these changes and transformation, just by believing in the value of the program.

So when you set your prices quite low, it can have the opposite effect. Even though you’re providing real value, your clients will probably underestimate the true value you’re giving because the prices are too low.

Reason #4: You have more time available to grow and scale your business

When you raise your prices and are able to take on fewer clients, you finally have the time to work on your business itself and build digital products with automated sales funnels so that you can bring in a passive income stream and consequently, reduce your client work little by little.

In the long term, it also allows you to scale and grow your business by systematically increasing your prices, instead of taking on more and more clients and burning out.

premium pricing

Reason #5: You change leagues

By raising your prices, you will also stop competing with many of your current competitors, because with premium pricing, you will just attract a whole different kind of clients that aren’t interested in low-priced programs…

In other words, you are changing the ‘league’, it’s like changing from ‘formula 2’ to ‘formula 1’ where there just is way more money invested and other competitors present.

Reason #6: You are able to hit your income goals

You can stop worrying about the financial side and just start focusing on what you do best.

You can chill out and no longer have to stress about convincing 10 clients to work with you… Just 1 client is enough to provide you an income of a few months.

How much should I charge?

You have basically 2 main groups of customers, one group of customers will automatically opt for the cheapest option, while the other group of customers tends to opt for the high-priced ones because they are looking for the service with the best quality.

That’s why, when charging only a little more than the low-priced services of the competition, you’re not applying either of the pricing strategies and hence, it’s likely that neither of the groups will be purchasing your services.

Do your competition analysis and see what prices your competition is charging.

Premium pricing generally means charging double the low-priced competition.

Will my potential clients be willing to pay this premium pricing?

Understand that the price that someone is willing to pay for your services doesn’t depend on your certificates, expertise, or experience, it doesn’t even depend on how attractive and irresistible your offer is, it depends purely on the value that person perceives of the service.

The person estimates this perceived value by evaluating how likely it is that this service will be able to solve their problems and satisfy their needs.

You’re not charging per hour like an employee, you’re charging for the transformation you provide.

You’re helping your clients overcome problems they are really struggling with, so the right clients know that this transformation towards a better life without this problem is priceless. So don’t feel like an imposter or a scam for having premium pricing.

How can I raise my own prices?

  • You have to know and understand your target audience perfectly. You should know what their problems are, what their desired outcome is, how they think, how they feel, and what their driving forces are behind purchasing your services.

  • The next step is to align your offer perfectly to match those needs. Make a list of all the ways your services are bringing value to your clients. Now, think about new things you can add to your service package that would significantly increase its value and match those client’s needs even more (for example a certain masterclass, or e-book you give as a bonus, a bonus service you provide,…)“

  • Mentioning testimonials in the selling process is ESSENTIAL, so the potential client can see other people whose problems were solved or significantly improved by your services. Those can convince the potential client of the transformation that your services have and can increase their perceived value.

  • The whole sales process and onboarding process is super important, it’s the first impression of the client of how professionally you operate. So, it’s KEY to really work on this onboarding process, really go the extra mile here, and make it as smooth and streamlined as possible to give this ‘premium’ feel to the clients, this will then directly have a positive impact on their perceived value of your services before they even began.
premium pricing

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Let’s Chat!

What do you think about premium pricing? Let me know in the comments down below!

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  1. Millicent says:

    Wow! What a great post. Thanks for encouraging people to charge what their service is worth. Big companies raise their prices all the times so we definitely can too!

  2. Kelly says:

    As a customer, I don’t always love paying premium prices, but I understand why people do it. This post is very well written, and I think you provided great reasons why people charge premium prices. I go to a gal for eyelash extensions who charges premium prices and is quite a bit farther away than I’d normally drive for my beauty appointments, but I go because I truly think she’s the best!

  3. Kimberlie says:

    Your post is the confirmation I need to adjust my business and prices to avoid collapse. I cannot sustain my current work load and client list, so it is time to adjust.

  4. Ramona says:

    Such a good post! I related this with myself since I’ve studied psyhology. Great advices, thank you!

  5. Thanks for sharing this post. As business owners, we’re often too afraid to raise the prices for the services we provide. We tend to undervalue our work in an attempt to attract more people. But reading this article gave me a whole new perspective…attracting more people shouldn’t be the answer but rather attracting the RIGHT people! most of the people that are engaging in my services would still look for me if my prices were higher because they’re committed and serious. The small percentage who won’t is because they lack that kind of commitment and I’m okay with only keeping the loyal-committed ones.

  6. Melosa says:

    Thank you so much for this informative post. Loving the content.

  7. Jana says:

    Yes! This is everything. Know your worth, girl! I have absolutely no problem paying for quality services and usually get much better by paying premium price. Also, love your writing style so much!

  8. I love this! I feel like I’m always pricing myself too low, but you totally convinced me to stop doing that. It makes so much sense from the perspective of both seller and customer. Thank you for sharing these tips!

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