Value Pricing & Business Models for Creative Entrepreneurs

Lesson 10 of 33

Student Hot Seats

 

Value Pricing & Business Models for Creative Entrepreneurs

Lesson 10 of 33

Student Hot Seats

 

Lesson Info

Student Hot Seats

Now is the time we have all been waiting for, time for some Hot Seats. Let's actually do this activity with somebody from the studio audience and I'm going to invite somebody up here. Who would like to come up here? Don't all rush. Yeah. (laughter) Alright Sasha, you win. (laughter) Oh my goodness. Yikes. I told everyone, you're my ringer, so... (crosstalk) Sasha was here before, so she's a pro. (applause) Have a seat. Thank you. Let's talk. Okay. So who did you choose to be, well first of all, remind us again what you do, and then we'll go into it. I'm a writer and a coach, so I would be Tony Robbins. (laughing) Basically the female version. Fantastic. Not exactly, but. Alright so, who do you see operating on the low end of your market? First, let's define your market. Do you wanna define it broadly in terms of personal growth? Do you wanna define your market in terms of singleness and dating or relationships? How do you wanna define your relationship for the p...

urpose of this exercise? Well, I'll just say that the person I admire the most is Brene Brown. Okay. And I feel like I would like to become some version of her, have that kind of standing. Okay, so that's probably a broader personal growth market. Yeah, mm hmm. Alright, awesome. She certainly has a unique brand within that market, she's affecting a certain tribe of people within that market, within that conversation, but absolutely, the conversation exists in a much wider capacity, as well. I think it's important that while you can identify that that's her niche or that that's the niche that you want to be in, or something very similar, it's really important to also consider that full breadth of the market as well, so we need to think about the Tony Robbinses, and maybe even the religious personal development section of the conversation, and all the different ways that conversation shows up, there's something to be learned from all those different niches. Absolutely keep Brene Brown in mind, and let's open it up, too. So who's on the low end, what was the business that came to mind that you see as doing good work intentionally positioned on the low end of your market. What jumped to mind was Chicken Soup for the Soul (gasps) just because it's so... That's brilliant, yes, absolutely. That is such a good example. Okay, fantastic. So what decisions has Chicken Soup for the Soul made? Well there's really no author associated with it, it's just edited stories so it's kind of generic and very low priced, and kind of accessible to anyone. And it's nice, not that, I've maybe read one or two, but I mean they're fine. (laughs) But they're not very special, you could say. No, no, they come out really often too, so they're regularly putting these things out, which can lower the perception, not lower the perception of the value, but it certainly can lower what they can charge for it, or what they would charge for it. Their business model is based around volume, based around scale, absolutely. They don't probably make much money unless they sell lots of books, which they do. Then there's all sorts of branded products as well. I'd say another decision that they've made that affects their price is they have a very particular cover that they put on their books, so their graphic design is very particular. And unless it's changed in recent years, it's not the most design-forward, (laughs) or design conscious kind of cover, and I think that affects, it may not affect the price so much as it affects the way people perceive them as just kind of an everyman brand, and an everyman brand is not going to be able to get away with luxury pricing, right? Mm hmm, right, it wouldn't be like the Chicken Soup for the Soul Mastermind Luxury Retreat. (laughing) No that would be really weird. Who knows, it may exist but I still think it's really weird. (laughs) So what values they represent, you know I mentioned the everyman thing, that's actually a personal value. A lot of people wanna feel like they are just part of the teeming mass that is humanity and that's a big personal value for them. Were there any other values that you picked out of that? Accessibility, which is similar. Yeah, absolutely, accessibility I think is huge. We've seen, not to get political, but we've seen a big shift in the overall conversation in this country around, there's the intellectuals and the elitists, and then there's everybody else. There's the kind of accessible market, so they've really positioned themselves in the accessible market, whereas Brene Brown is absolutely on the other side of that. She's a university professor, it may be accessible, but she's reflecting different personal values as well. Okay, who was on the high end? I think I wrote Tony Robbins. Oh did you, okay. Yeah, and then there's a woman I admire, Kim Anami, who has kind of sexuality retreats that are quite high end. Excellent, awesome. So we talked about Tony Robbins, let's talk about Kim a little bit then. What decisions do you think she's made that affect what she can charge? Design of the website, confidence, literally the place that she's chosen, for this first trip that I've done, I've chosen something that's more accessible in terms of the place, every little detail. It seems to me, in thinking about this high end thing, it's such a detail-oriented thing, from your website, de-de-de-de-de, to anything that you offer. Yeah, absolutely. It is very detail-oriented and I think generally people who have values toward, that lend themselves to spending more, also have a value for detail-orientedness. Not necessarily that they are extremely detail-oriented people themselves, but they're the people who notice when something's a little off. Or they notice when the ribbon hasn't just been tied just so, (laughs) right? And it may not even be that it bothers them, but it's something that they're aware of and it's something that they know, you know, I pay to get the full experience. So let's talk about your business. What decisions do you think you've made to this point that reflect very positively, that are very consistent with the price that you are charging, where with the prices that you're charging in general? Well, the prices I'm charging or that I want to charge, the positive is that I'm a thought leader, I have a lot of great media appearances, I've had an impact. She's talked with Anderson Cooper. (laughs) I always make her point that out. Okay, great, so definitely thought leadership, media is huge, and you pursuing media, in fact tomorrow I think you have to leave for a little bit, right, to pursue some more media? A little bit, 'cause it's my holiday. Exactly, it's your holiday. Media is huge in terms of what that does for your reputation, and then also what people expect to pay. Well if she's talked to Anderson Cooper, then I expect to pay X amount of money for whatever it is that she's offering. Even if, you know, 20 different people would say 20 different things, there's still an expectation there. Gimme something else that you've done that's positively affected, or is consistent with, the price you wanna charge. Well, writing books. Mm hmm. There's a depth. I don't know, the other things, I communicate with my audience a lot, but I don't think that has to do with... No, how about training? Well, I have coach training and I have some esoteric, orgasmic training. (laughing) You don't have to say that, that's not what I was pushing for. I mean, I'm still figuring that out, (laughing) how to talk about that. And your tango training? Yeah, my tango training, and yeah I mean basically that I'm an adventurous person who's done a lot of things that most people haven't done, and I'm figuring out how to say, listen I did all these crazy things that I'm gonna share with you, the highlights, and you can learn from it. Absolutely, so your life choices, your life experience choices, are actually really positively and consistently reflecting on the price you wanna charge. I think that's a really good point, this doesn't all have to be just, like, I'm getting a new logo so that means I can charge more, it's kind of taking into account this whole entrepreneurial experience. I talk a lot about, I'm not into work/life balance, I'm into work/life integration. I wanna make sure my work is integrated in a really positive way with my life, and one way to really think about that is me having more experiences, doing the things that I want to do, affects the price that I could charge. It affects the reputation, it affects the story I could tell, and absolutely that's true for you as well. Let's not get too down, but what are some of the choices you've made that you think may affect your ability to price, negatively? I don't think I've been specific enough about who I'm for and what I'm doing, and that I've been in business, teaching online classes and officially putting my coaching out there online for a year, and it's been this quirky thing, but that means so many different things to so many different people. In fact, well you and I have been talking, is quirky cheap or high, or does it affect what I can charge, and I think that there are high end quirky people, too, but it's not most of my audience isn't like that. They're more struggling artists, or you know so I think I have an email list that is really cool and awesome and I love them, but I'm not convinced, or I don't have the evidence yet that I can go to high end with them. Yeah, absolutely, so it's possible that the branding that you've associated with to this point, because you have a successful book, because it is a thriving community, may actually be hurting your ability to charge what you want to charge, to live the life you want to live, to attract the clients you want to attract, and I think you thinking about rebranding or thinking about changing the way you tell the story that you have to tell, is a really good move in the right direction. And I think absolutely quirky was worth pursuing because of the reputation, because of the community, and now you're starting to see, it's not even, yes, you have a lack of data, and you have some data that says this may not be the right thing. Yeah, for the long term. And the other thing is like my own desire to be accessible, or even that I identify with the high end people in a certain way, I have friends who are CEOs, I have friends who are incredibly financially successful, and I have friends who are struggling. And I am that human person who can identify with both. Absolutely. To make a good living, I have to come on this side and write books for everyone, so I'm still struggling with that. Yeah, yeah, and I think that's something you'll probably struggle with for a while, it's not something we get over immediately. But I think making sure that you are continually kind of dipping your toes in both sides of that market is really important. You know really well and really intimately that community that's going to just devour your books and you need to stay connected to them, but you also really need to pursue that high end market. If you're going to move into a business model that's really fueled by that high end market, that that's how you make ends meet, or better hopefully. Then it's really important that you make sure you know what the values of those people are, what their problems are, what their frustrations are, what they want out of an experience like you want to give, because you'll be able to help yourself make better decisions that allow you to position your products with a price that really makes sense. Mm hmm. Good? Yeah. Cool. Cool. Anything else you wanna talk about, in terms of low end, high end, any questions? No, I think it's what I wanna do and is a journey. Yeah, absolutely. I think that's really good to keep in mind. Thanks Sasha. Thanks. (applause) Who's next? We have time for at least one more. Someone's gonna have to be volunteered. Tiffany! (laughing) Can I bring my notes? Yeah, of course, of course, of course. (laughing) It's 'cause I have a product base, isn't it? It is because you're a product base, thank you. I already have my next one picked out, too. Tell us again who you are, what you do, and tell us about the market you're in. I'm Tiffany Whipps, jewelry designer, metalsmith at House of Stones Jewelry. Okay, awesome, so the market you are in is Jewelry. Jewelry. Yes. Awesome. And I guess I would narrow that down to artisan jewelry. Fantastic. 'Cause jewelry's pretty... Jewelry is pretty big, personal growth is also pretty big. In terms of markets as conversations, I really like to think in terms of big markets. We can niche down all we want later on, and also for this exercise, I love just exploring the whole, huge market. Good, 'cause I put Tiffany's down. (laughing) Fantastic. Gosh, go Harry Winston. (laughs) Let's start at the low end, though. What's a brand that you see doing low end jewelry really well? So there's this jewelry store, they're super popular, I think it's called Pinky Jewelry? They're on Northwest 23rd. Oh okay. But they are literally like... That's in Portland. Yeah, sorry. You grab like, you know, 100 different pieces, it's bling, it's all over the place, I need to go to here. It's just packed, just wall to wall jewelry. But in kind of an upper scale area, Absolutely. Totally accessible to everybody shopping there, and yeah, grab and go. Really, really, really interesting. I'm not sure how I've missed this place. I love Northwest 23rd. It's bright pink, and it just blings at you. That may be why I've missed it then. Yeah I mean it's... (laughing) Awesome, okay, so really, really interesting. What decisions have they made that make sense with the price they're charging, because you already mentioned one decision that is almost a little inconsistent with what they're charging, which is the area that they're in. Northwest 23rd in Portland is a really cute, kind of quirky, but definitely higher end, mid to high end shopping area, lots of independent stores and boutiques, also some higher end chains as well. It's a great place. I was just there, that's where I bought this shirt. (laughing) So that's a little bit inconsistent, which is really interesting. It definitely ties into the story, I think. But what are some of the decisions they've made that really make sense with what they're charging? They're definitely selling a mass-produced item, so they're buying something from a wholesaler, wherever that's made, and then filling their store with it. But at the same time, where I think the inconsistency makes them seem higher or better. Okay. Does that make sense? Absolutely, absolutely. So they could be on Burnside somewhere, or they could be in a whole different market, but they chose I think that location so they could sell all of this mass-produced stuff inexpensively in a boutique kind of setting, Gotcha. And make themself marketable. Does that make sense? Yeah. Tell me about the merchandising of the store, because I think with physical goods, merchandising says so much about the price of something. So tell me about the merchandising of the store. I've never actually been physically inside the store. Oh really? (laughing) But there's windows, so Pinky Jewelry, everything's pink, and their window blings at you, and you just know instantly from looking at the outside of the store that that's a place you could go, grab some costume jewelry for the evening. Ooh, so that's really interesting. So there is a high value toward convenience there. Very much so, I guess that's what I'm saying, positioning. They're like, we're out on the town for the evening, we're getting our outfit, oh hey, I forgot my necklace, let's pop in there and grab one or two and it's not really the... Excellent, oh okay alright. Something you have to think a whole lot about. I see so that totally ties it together. So they've got a fashion-conscious clientele who's also very convenience-related, or potentially very convenience-related, right then at that moment. Right. Cool. 'Cause you're going on Northwest 23rd to grab an outfit, then go out to dinner and having cocktails somewhere. Absolutely. Exactly what you are doing. (laughing) Alright, tell us about the high end of the market. Tiffany. Cool! Luxury items, great customer service, you walk in there, you know exactly what you're gonna get. How, how do you know exactly, why do you know exactly what you're gonna get? Because how they position and how they merchandise and how they display things. I mean you have somebody opening your door, you see crystal in the windows, the cases are perfectly lit The windows themselves. Yeah, the windows. And then the cases are perfectly lit and things are spaced out and it's just a way, somebody's behind each individual desk waiting to help you out. Tell me more about the staff. Oh, just you know, super friendly but super accommodating, I mean they're right there, so every little tiny space has, they're overly staffed to make sure they're Knowledgeable. Oh, very knowledgeable. Everything down to last detail. Absolutely. So what values are those reflecting? Exclusivity. You can hop into Tiffany's, so you're almost part of a club at that point. Your value is, I'm getting this posh item there, but see they're still accessible to the layman, it's something you aspire to be. Right. So you're getting this posh item, and you know it's luxury, you just feel it. It makes you feel luxurious when you put it on. Gotcha, alright, let's talk about your business. So what decisions have you made that really positively affect, that you're really proud of, and they reflect the price that you wanna charge, the way you wanna charge it, and that are just really consistent with your overall brand story? I decided to sort of maintain small production, so everything's done in-house. By you? By me. Okay. High quality materials, so I definitely don't, it's not platinum, but at the same time high quality for what I'm using for metal. Education-wise, I've gone sort of above assembly jewelry to a metal studio, and then I opened up separate studio space, so as to sort of more represent that, so my customers can actually come in and we can design a piece and things like that. Yeah, that's a big decision and I'm really It was a big decision, yeah. When you opened up that studio space, did that affect your prices immediately, or is that something that you're still kind of dealing with? I just opened it this month. Oh, okay, congratulations. It is another reason that I need to reevaluate what I'm pricing and what I'm doing, because now I have this extra out of house business expense. Yes, I'm familiar. Yeah, right. (laughing) What decisions do you think you've made to this point that are negatively affecting the prices that you can charge? I think I trained my customer a little too low, in the beginning, initially, and then it got really busy, so I'm two weeks out on production on everything, and I don't wanna be there. I definitely wanna go back to my customer service goals and sort of be in the better range for that. We were talking a little bit earlier and I'd love to unpack this a little bit because I'm quite certain this is gonna be really relevant for people online, both makers and service providers. Tell us about the eCommerce problem, or eCommerce question that you're dealing with right now. When I first started making jewelry, I started on Etsy. Etsy's great, we love Etsy. We do love Etsy. They bankroll me, that is my bread and butter. But now I don't feel like it's quite conducive to where I want my brand to go. I definitely want people to be on my website because they are on my website looking to purchase from me and not sort of looking to comparison shop through another eCommerce, and I just think, yeah, for press and different things it's past. Yeah, and also how about for customer experience. So if you're attracting, and this is something that I think a lot of people don't think about, and this is why I said it's really, really relevant both to makers and service providers, is what is our customer's experience of our business online? Because so many of us are basically just doing eCommerce, whether we're one to one relationships with people, or whether they're buying products from us. When you think about the decision, or the lack of decision, because most of us don't know when we get started, of people go from our website to our Etsy shop, and there's this kind of disconnect between the branding that you have on the website and the branding at Etsy, and people can get confused and uncomfortable. And remember, uncomfortable people don't buy. (laughing) Then you're also leaving that customer experience, the actual checkout process, to somebody else, where you have no control, they make decisions and then they tell you about them. (laughing) They're really good at listening to people and doing the best job that they can, but it's a loss of control, and it's something where there's an inconsistency. Even if it's not from a perception standpoint, there's still an inconsistency in that experience. I see it a lot with service providers, from going from somebody's website through a PayPal button, and then checking out from PayPal. And certainly, I still use PayPal an awful lot in my own business, I love them, I think it's a great service most of the time, but there are certain things that you can do to make the service more consistent, to keep people on your site, to have more control. Another thing that I've done recently, or I did last year, was to upgrade my shopping cart to WooCommerce so that at kickstartlabs.biz, when you go through and you check out, it is absolutely seamless. You never leave the site. You fill in your PayPal information there, you fill in your credit card information there, and everything through that I have control over. Every single part of that eCommerce solution, I made a decision about, or my tech made a decision about. And that just delivers a really consistent experience that ups my brand, ups my reputation, allows me to charge more if I choose to. I think that that's probably something to think about as well, and we've talked about that before. What is the customer experience of moving, and what's the customer expectation of moving from the site that does a great job of showing off your business, to somewhere else that is orange instead of black and white. (laughing) It's a little jarring, right? Yeah. When I listened to you, you were just like oh, there is a disconnect, and I'm like okay. There was! There is a big disconnect. That's the last thing I want, is my customer to be disconnected Exactly. from what they were just experiencing, 'cause disconnected customers don't buy. Disconnected customers don't buy. (laughing) Absolutely, absolutely. Any other decisions that you think you've made that may negatively affect the prices you could charge? I didn't, in the beginning, spend a lot of money on branding and photography and things like that. I definitely have gotten better on my own, but I think that's something that I wish I would have in the beginning, just busted out and invested a little more in. 'Cause now I'm trying to go back and redo everything that I've done and so... (laughing) I think that's a super common issue, and these are things that we don't always know going right out the gate. We think we can do it ourselves, or we don't realize all the finer points of this and that and product photography is a really difficult one. But that I think also carries through to all sorts of different businesses, like your headshot. Have you invested in a good headshot? No. What does a good headshot, did you say no? No I haven't, but no, Oh no! I want to, that's what I... It's huge! It is. It's huge. It's huge. It so changes the perception of your business, of your brand, and that perception changes what you can charge. So if you want to charge more, start looking for those kind of details. Product photography is a great place to start, web design is a great place to start, but it may just be as simple as booking a headshot session is a great way to get started. (laughing) And those things are way less expensive than you might think or maybe you know a photography student, or there's a college where people are learning photography and you can get it done super cheap. These decisions that we make that allow us to charge more don't have to be expensive. I kind of feel like there's almost that fear that, well I didn't do this 'cause it's so expensive. A lot of times, it doesn't have to be. I mentioned I upgraded my shopping cart, I think that cost me maybe, well maybe with the tech support, $700 total. So $400 for the software, $300 for someone to set it up, 700 bucks. And done. And done. That's not bad. No, it's not bad. I mean it was an add on, but still, it's not bad. It doesn't have to be super expensive. Your headshots don't have to be super expensive. Your product photography doesn't have to be super expensive, but taking care of those details and making sure they're consistent might mean you can charge 50% more. Well over time, that small investment now is completely paled in comparison to the profits that you can make. Cool, anything else Tiffany? No, that was good. Alright, cool. (laughing) Thank you so much. Thank you. Thanks Tiffany. (applause)

Class Description


Ready to reach your revenue goals with less hassle and more ease? Join CreativeLive for a class that will teach you the core pricing and business modeling skills every creative entrepreneur needs to know.

Business strategist Tara Gentile will take you step-by-step through the process of using multiple revenue streams to amplify the earning potential of your business. If you're operating your business launch to launch or contract to contract, this is the course for you. You’ll learn the principles of value pricing so that more customers are ready to buy. Tara will also guide you through the process of creating a business model that makes selling natural and sustainable. You'll never worry about where the next sale is coming from again.

By the end of this course, you’ll have concrete, easy-to-implement strategies for running your business with the business model and pricing that will help it thrive.

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