Pricing Your Products and Services
Thank you very much, wei are on lesson seven. Pricing your products in services before we move on to lesson seven let's talk about what we just covered in lesson six compiled brand inspiration and make a great first impression. We talked about how do you spray and inspiration without copying easy, immediate ways to improve your website the do's and don'ts of hiring a web designer the number one mistake entrepreneurs make with their websites and now we're talking about pricing. The objective of this one is to understand how prices affect her marketing and branding, why you might wanna have an entry level product and what you need to do to raise your prices, what you'll learn, how pricing, affection, marketing and marketing, affection, pricing? Why you need to determine what market you want to be in, why you need to price for growth and how to do it, and how the words you use affect what you can charge. If you don't understand how your prices affect the way people see your brand, you pro...
bably won't price your product strategically. Even worse, you might just pluck a price out of thin air. If you don't have the confidence to raise your prices when needed, you won't make enough profit to pay yourself and grow our business and that. Leads to burn out when you can't grow and do the things that you need to do to make your business better for yourself then you've you tend to get burned out so why are we talking about pricing? This is a course on doubling your followers on marketing well, you're pricing affects your marketing they can't live separately your marketing affection pricing vice versa they go together like peanut butter and jelly if you have low prices you need to be marketing as a budget friendly brand it's not gonna work any other way if you have high prices you need to be marketing as a high end premium brent and you have to be giving a high end premium brand experience it all goes together so high prices mean really great product photos you need really great product photos regardless, but people are expecting more when they're paying more it needs to come in pretty packaging it means to be a customer service experience that they enjoy and like there has to be more that goes into it and as we talk about pricing I want you to keep in mind the monetary value of address is quantifiable but the feelings you get when wearing the dress aren't so sometimes you would think materials times labour gives you ah base price and then you go from there and you double that and then you have your wholesale price and whatever it is, whatever formula you're using, well, ok, that's, well and good, hopefully you're also adding in growth and things like that into it, but really it's about how much the person values what it is that you're selling so it's really about how much per how much that person values the dress, or how much that person values their new website or their new earrings, or getting their blawg into shape? It depends on that kind of stuff, so I want youto keep that in mind as you go. I bought a lace dress from anthropology for my very first creative life course, and it was two hundred fifty eight or closer to three hundred somewhere around there, three hundred dollars, and it wasn't about the cost of the dress. It was about how I felt when I was wearing it and how great I felt when I was wearing it, and I would have paid more for it, frankly, because I valued it that much, so keep that in mind when you're pricing your products. It's, not just about the formula. Researchers at stanford university in caltech demonstrated that people's brains experience more pleasure when they think they're drinking a forty five dollar bottle of wine instead of a five dollar bottle, even when in reality it's the same chief stuff, so they gave people the same wine they told one group of people that was forty five dollars, they told the other group of people that it's five dollars, and the people who had the forty five dollar bottle of wine enjoyed it more so that also says something about pricing people tend to value things more when they pay for them. The people who buy this course are going to be more likely to do the work. They're gonna be more likely to go through the workbook. They're going to be more likely to participate in the facebook group even though the workbooks free, even though the facebook group is free there gonna be more likely to do it because they value it more. So when you're thinking about giving away your stuff for free amanda creek fit, keep that in mind that people value things more when they're paying for them and as the prices get higher, you tend to value something even more. When I signed up for a course in it's two thousand dollars, you can bet I'm gonna be watching every video I'm going to be taking every action I'm going to be doing everything I can to make the most out of that course that that really expensive dress that I have that makes me feel amazing, I wear it every time I have. The chance I've worn it to a wedding I've worn it to a gala of warning out to dinner I work too creative live I value it I love it and I try to look for places that I can wear it so you want to keep that in mind with your prices it's not just about the formula it's about so much more than that it's about what your prices say about your stuff so what market do you want to be and this is on page sixty one do you want to be in the high end premium market do you want to be in the economy market in the middle? Where do you want to fall when it comes to your prices and when it comes to the market that you're going to be in so I kind of have a spread of like final's not the right word but almost a path that people can follow and at the beginning of the path it's not as expensive and what I hope is that I can teach people things that will help them to get to the place where they can afford things at the higher end of the market so it's like I have a market for people who work with me one on one if they're writing a book and they need someone to help them outline the book and develop the whole idea and everything and that's an entirely different market from the people who are starting a blogger or they need to revitalize their blawg and they have like a small monthly payment to work in a group with me how do you deal with that as faras your whole like your whole what market in my end kind of thing okay, so my first thought is that those products are in different markets in different market so you're talking to different people different customer so there's that and then there's the overall picture that people are getting from your brand. So for instance, if I sell a course for three hundred dollars, which I've done recently and I also have a thirty dollars e book that's kind of like the starting point for people is that e book and for thirty dollars for any book is more expensive then I would say a lot of e books that are out there twenty twenty nine dollars and so I priced it specifically for that so even though it's on the lower end and it's not it's not a thousand dollars it's still I think it's very valuable and so I'm pricing it at this point and then when you get to my three hundred dollar course, I think it's very valuable I'm pricing at this point but they're two different products and so they're definitely going to be further apart I don't know if that helps or not yeah I think so yeah how do your current prices position you in your market? So where do you want to be and then how do your current prices position you and you get to choose the stuff you're in charge you're in charge of your business you get two shoes you just have to make sure that everything else fits with that choice so that it all makes sense together everybody good with that? So how much money do you need to make and how much money do you want to make so the need is you need to pay my bills I need to keep things going within my business the want is thie other stuff on top of that what are the numbers look like? Do you know the numbers do you know the expenses man to see you're not in your head you know those numbers awesome you want teo know what the need is and then what the one is what's going to allow you for growth? And then also when you're looking at your dream life in business and that workbook and you're thinking about what the dream would be, what kind of money do you need to be making in order to have that life get to that place your prices have got to be reflecting that or else how are you going to get there here or not? There are so many times when I work with somebody and she's let's say selling her jewelry for really, really inexpensive she's barely making a profit by the time that she's making it, photographing it, writing the copy, she gets it up there, she's not making anything, really, and then we change her prices and she's like, oh my gosh, now I can actually afford to get the camera to make my pictures better now that I could make my pictures better, I can change my prices again, and now I can hire somebody to help me with the shipping and packaging, and then that gets me that gets that off my plate so I can do the design work and make my peace is even better, and it becomes this process, but you have to build it in there, so I say get serious about tracking the stuff I would track your monthly expense expenses. I would see how much is coming out on a regular basis, and then I would also think about how much more you need for that life that you really want. So again, you can't just use a base price, it doesn't work that way. This is just the tiny formula. Lots of people say even more than this, you need even more than this in it, but even if you're using something like this, it doesn't necessarily work for everything else going on do you have to think about those things you have to think about market? You have to think about what it says about your product at the price that it's at. So if you're selling a web design package let's say for four hundred dollars, I'm going to think I'm not going to be getting very much right hardly anything. Yeah or something's wrong here, and I've seen stuff like that because people are trying to get clients, but actually I think it deters clients, so to grow, you've got to build it into your prices. That's how you hire other people to do stuff for you, you have to build that stuff into your prices if you want a virtual assistant, if you want to hire a photographer, if you want a web designer, you gotta build that stuff into your prices so that you're making the money in order to do that, and not only that, but when hiring somebody, you want to have enough money where you can hire the person you really want to hire, as opposed to the person who fits into your budget makes a huge, huge difference. You want somebody who's trusted, especially there, working on your business, your your main thing so let's, talk about how to raise your prices, you want to be strategic about your pricing your prices are dependent on your marketing the quality of your photos thie experience you give your customer the quality of your copy the quality of your website all of it depends on how you compress your products and if you want to raise your prices you need to think about these things how am I going to improve these other areas of my business so that people will spend this much money on my product it's not always about changing the product and in fact a lot of times it's not about changing the product it's about getting the website designed or it's about having better photos or better copy if you're giving your customer a premium experience you can charge premium prices and you need to charge premium prices to give your customers a premium experience he can't do it otherwise what do you guys think about that so far everybody's nodding how who struggles with pricing okay angie tell me what do you struggle with when it comes to pricing coming up with the right price for what I'm doing have a mastermind and I mean I put it out of my groove and I thought it was pretty low mean one hundred dollars a month to be in a group you know but a lot of people like oh I can't afford it right now like you I don't know I don't know what I'm doing wrong maybe I'm not really in front of like my ideal client like I'm still searching for that person that's why I'm here. Um so I think maybe that's it I think one hundred dollars is a lot of seen a lot of other groups that charge way more than that, but I thought, ok, a lot of people are just that start up and I think they're scared to make the investment in themselves they have to, you know, get in there and trust the fact they can build our businesses. So what about the what about who's already in there? What about those people that did make the investment? Why do you think that they were willing to spend the money because, um, they're ready to make a change and one lee that's in my in the group, she used to pay me more because we were a one on one, but she just had some things happen in her life that she just wants accountability, but she has to, like, readjust her her bills and stuff like that, so she still holding on? So I really appreciate that, so they are ready to make a change and to invest in their businesses, and so the people who are not buying do you think it's because they're not ready for that? Well, I was talking to christine today, and I think a lot of people want free ninety nine you know so I call it you know they want it for free and that's why I was asking the question about you know, value like I mean how much I mean I feel like I give out you but maybe I'm not I need to step my game what when it comes to that more maybe let them test drive me so to speak a ce faras what I have to offer um so well I will tell you that some people offer a certain amount of time for free in the groom to see what it's like and then you will see drop off after the free period is over but I can't tell you how many times I've signed up for something that you get free for thirty days or you get free for fourteen days or however many and I don't want to give it up I am uh I tried out I believe those netflix was one of the things that I tried out for free and while that's a low price point I can't live without my netflix anymore I have tohave it and now I also tried out who and I know I have tohave who it's like I'm not watching that much tv but I have to have these things or I get ah I'm signed up for little oat it's I tried that it's this service where they send you close and you wear them for however long you want to wear them and then you send them back and then they send you another box and it's a fifty dollars a month thing and you can do as many boxes as you go through a month and they just you were, um ship him back and then they send you some more and I tried that one for free I had some sort of coupon I don't know what it was, but I tried that for free and now I'm like, I have to have my little like I looked forward to getting my box of clothes that I get it feels like I'm that one it feels like I'm getting it for freaks I'm not buying any clothes but obviously it's not free so how many of us have signed up for something in the beginning because it was free and and sometimes we drop off sometimes we're like now this isn't worth it, but if it's worth it, if we're seeing change and we're getting something out of it or it's adding enjoyment to our lives that we don't want to give up now it's the thing about los okay people are more likely tio they don't wantto alright, they don't want to lose a dollar more than gaining a dollar, so losing a dollar means more to people then gaining a dollar and so it's the same kind of thing with other stuff once they're in et and they have it, they don't want to lose it so you could try doing something like a thirty day free membership and then you're charged after the thirty days and what you have them do is put in their credit card information, so you've got it and if they decide not to stick around, then they don't stick around and if they dio, then you've got a new customer, you could experiment with it. This is all about experimentation and figuring things out until if it feels right, you could do something like that. I've seen other people do stuff like that that that works really well, it's just about whether it's right for you and your brand in your business or not, that sounds good because my nieces, I mean it's dealing with, you know, natural here enthusiast so it's a natural hair community and most people create products that's for that market. So it's still, when I go different places, I still feel a little of it out there alone because it's not such a huge thing and a lot of people don't always understand that particular market, so I know that they're struggling with the same things that I am some like let's speed together, let me help you know, and so so I think I will definitely try that so it's really a really good tip so I'm gonna let you know I worked out try it try it let us know tell everybody in the private facebook group because that everybody is gonna want to know how it works out for you and again it's something that if it doesn't work out and you're seeing way too many people drop off then you just get rid of it you don't offer it anymore and I would do it for a limited time just in the beginning I would say for the next a month you can sign up and get thirty days for free that way you're going to get a bunch of people signed up and see if it really works or not and then if it does you can offer it again okay, you could say this is a trial and we're going to see how it works and if it works really well then I might offer this for longer if not then this might be the only time you get the option to do this so jump in and do it come ok, I'll have it done by the end of the week all right? I love it I love that kind of thing kind of started all right the words that you use affect how much you can charge let's talk about fifteen weekly emails versus a fifteen week course sounds completely different even though it could be the same thing it could be sending out your course content over the course of fifteen weeks, but if you call it fifteen weekly emails, people aren't going to pay as much if you call it a fifteen week course, they're going to pay more or class versus a mastermind, often with mastermind we have this idea of we're going to get personal feedback, we're going to get hand holding it's going to be a smaller group and so well most of the time people are willing to pay more for a mastermind than they are for a class juice versus freshly squeezed lemonade it sounds different you're going to pay more for the fresh stuff it just the words that you use? My husband and I we went to this restaurant in richmond that we go to a lot believe it's called the daily kitchen I should know what it is, but we just go there so often that I don't pay close attention and we don't live there. We just go when we visit and they have juice on the menu it's fresh and it's like seven or eight dollars for like a tiny glass and we'll order it because it talks about how it's freshly made there every day and they have all of these delicious options and we're paying seven or eight dollars for tiny glass of juice, whereas if they just said juice for eight dollars or in shoes for eight dollars, I would never order that it wouldn't happen. So the words that you use affected conference versus retreat conference you're going to think big something with more people a retreat you're thinking you're going to pay more money maybe it's gonna last longer you're going to get more feedback, you're going to be with a smaller group of people watercolor course versus water color intensive I would pay more as a watercolor person I would pay more if somebody called something of theirs watercolor intensive just cause I think it sounds cool sounds different, so think about the words that you use for everything for your products, especially for your products and services what are you calling them? And could you change up the wording so that you can charge more money? And really it could just be that that you change the words and you get to charge more money? That would be fun and we'll talk more about word choice moving forward in session three it's all about writing so we'll talk a lot more about word choice them entry level products and product that's more affordable that gets your customer in the door gives your customers away to see the quality of your paid products my e book marketing for creatives, which I don't ever call in a book except for when I met creative live it's it just happens because it's the easiest way to describe it usually I just call it a book because like wording people think of e book they think it's going to be cheaper not as high quality all of those kinds of things but an entry level product gets people in the door you khun b a premium brand while still having an entry level product good so you can have something that gets people in the door they can see how great you're paid products are and then it gets them excited to buy your other stuff, so if you have one smaller price product and all the other products are more expensive than it can work is that kind of like the setup that you have chris that's what I'm hoping to have but my problem is that I this is my perennial problem in all of the things and I know it's not I know it's really common most creative people have this problem and it's not a bad problem to have in the you know, grand scheme of things, but I have lots of different things that I really love to dio and then I'd love to help people with and I have managed to, you know, bring it down and like try to focus and keep it focused and so in mostly focused toward three different streams which is still to more than you know one baby you should still be focusing it down but I have blogging and then I have copy website writing and then I have general writing skills. Those are the three areas that I help people and in each of those I want to have an entry level thing where it's something that they can buy it's either digital product that they can use on their own or it's a book that is a print like a chat books it's printed and sent to them or something to that effect that's at the entry of each of the streams and then have the next step and then at the end of it have working with me directly, but yeah, it's yeah, I have to focus it, just build it one step at a time. Yeah, but I think that that can work and they all go together so well, that it's not as if it's not confusing. Yeah, I'm not teaching like sheep herding. Yeah. Ah, which I mean, if you're into it that's cool, yeah doesn't really go with the other thing is exactly all right. One of one of a kind products they have to be priced is one of a kind products, so if you sell this one of a kind products, then you need to make sure that their price that way because one of the main things is you can't make it once and then take the pictures right the copy decide on the price doing all of that stuff and then sell it over and over again without having to do that you might have to make the thing over and over again but you still have all the other stuff for it the photos the copy the way your marketing and the tweets, the facebook post all of that kind of stuff it's hard to do that over and over and over again so you definitely need a price for that you'll never make enough money to make it worth it without premium pricing you have to be a premium brand if you're making one of a kind stuff unless it's something that takes you no time at all but still you have to factor in the fact if you're taking photos if you're writing copy still what about discounts and sales? What about discounts and sales so here's my thing with discounts and sales as a customer I love him as a business consultant hatem so I have this issue discounts and sales because of that they can really cheapen your brand unless you use them strategically or unless you are pricing your products let's say double the amount and pretty much all the time you're running sales and that way your making the money that you would make but that's a little kind of in my opinion a little bit shady and we don't like shadiness so price what it's worth build in things like you khun build in some stuff and have a little bit of cushion that's normal but we're sales and discounts I think you have to be really strategic you could dio like once a year kind of sail that doesn't cheapen your brand that just get your customers really excited for that sale and brings you a lot of money in I used to do a once a year sale on my birthday I said I'm gonna celebrate my birthday by having a sale that's the on ly time I had a sale I have not done it in two years even though all the times that I did it I made at least the first time I did I think I made a little over three thousand dollars in the course of the day it was a twenty four hour sale the second time I did it I think it was closer to six thousand dollars and so you see a bump in sales when you do something like that and I was selling something an expense sieve so that was a pretty good amount of money it was like um I think I was charging twenty or thirty dollars for whatever it was it was a one time I had a package of videos that I had put together and so you could do it every once in a while and it not affect iran but if you're doing it even every quarter people are gonna look for the sale and they probably aren't going to buy unless you're having a sale I do that with brands that I know have sails regularly I will not buy unless they're having a sale unless there was like some kind of emergency and usually there's never any kind of emergency for that I can wait so would adding bonuses instead of like if you want to incentivize if you want to add some kind of extra urgency would adding a bonus kind of thing to it instead of making the price lower adding value would that be a better way to do it yeah yeah exactly like we talked about with olivia adding maybe a tutorial that you get for two weeks if you purchase within the next two weeks you get this tutorial that makes it valuable without reducing the price adding something to it getting people to buy now yeah, absolutely so yeah and what about adding like early bird pricing so for like two weeks before the class starts you consonants for a certain price but after that it becomes this price and that's what it is from that on okay? Is that still borderline? Well I will tell you my experience with it because I have done this a few times it always doesn't work very well and the reason why is because people on ly sign up during that early bird time period this has been my experience that other people have had other experiences especially if it's not a limited time offer these have been for limited limited time offers where you get the early bird price for let's say a week and then you can sign up for the course for an additional two weeks but you're paying the full price nobody wants to pay the full price they're irritated that they missed the early bird special and they don't want to sign up and so it's like ninety percent of sales happen during that time and ten percent of sales happen during this other time or nobody else buys I've had that happen before too where there was wow there is one more one person bought after the early bird price was over now if I had left it open forever if it was of course that was just going to be up there for ever, then I bet it would've driven a lot of sails in the beginning and then people who are new coming in and seeing it for the first time wouldn't mind buying it because they don't know that there was an early bird price right and that's kind of it's going to be like a monthly class that's going to continue kind of indefinitely so my hope, wass uh, early bird pricing would be okay the first two weeks of it. And then afterwards, like you said, people would be coming in later that could still sign up for the class and wouldn't even know that that had existed. Yeah, that's that that's when I think it could work in my experience, it has just backfired every time and hasn't worked well, but I'm sure other people have good experiences with it. Has anybody else done something like that where it worked really well, I kind of I have tears for the blogging boot camp that I'm that I'm doing it's a fifty two week thing, um, and it's an evergreen things. So we're running through it for the first time now, but it will continue on and on on, um, and what I did is I opened it up for pre sale to all the people who are my like, loyal. A lot of them are here, my loyal, loyal friends and what I did instead of, you know, making it a discount or adding in something just for the early adopters, I have three pricing tiers. Where the first here is really affordable and you only get the print outs every week and then the next here is where you get all of the things that you really need, you know, the print outs in the group and all that kind of stuff, the videos and everything and then the final one you get actually some one on one time with me as well as all the bootcamp stuff. So what I did is I was like, you just pay for the middle one in the pre sale and then you get to have the one on one time with me as well as if your a plus member so they're my early adopters and and it means that I get to have some testimonials for people to upgrade to that plus as well. So I have people I know who are going to be actively involved in doing the one on one stuff so that I can later tell people who were ready to make that bigger investment. Hey, it worked great for these guys and I know it will because I know that they're into it already, so that is very different and I think that that is strategic and smart and could work well across the board, so I love that idea and having even just bringing up the different price points and having different levels is a great ideas well, because people look at it and most of the time they want the middle they want the middle program whatever locks no, they weren't doubtless you call this just right? Yeah yeah or people who are on a budget the one that is how much is the lower one? The lower one is seventeen dollars and fifty cents a month, okay? And I've had two different people who were like I just can't on like one of them she's you know, she's an engineer high or middle school or whatever and she's like it's I think it's so cool that she's involved you know, but you can't do the, you know, thirty dollars a month? Yeah, so she has the availability there. Yeah, yeah, and so then it feels like that other one could be a no brainer for the other people. It's a no brainer? Yeah, that's, what you do when you create options like up so today's mission is to figure out how much you truly want to be making and how many products you'd have to sell each month currently to make that much money that's a scary thing to dio but I want everybody to do it so that you really can get this reality check because then you're gonna want to make changes and you're gonna want to do all the other stuff I'm telling you guys to dio if you need a, raise your prices, adjust them and do one thing to increase the value of your brand. Just do one small thing to increase the value of your boat.