In case you missed last week: Diversifying where you get business from will make you less dependent on attorneys. Attorneys see us approaching them like a group of Hare Karishnas at an airport, which can make it hard for some of us get in front of them. I’ve got some alternatives.
On to this week: This post is about a podcast about pricing. If pricing engagements is difficult for you, this information will help you re-frame the problem and make you say, “I can do this.” You can charge a price that scares you. If you have the courage to do it.
And if you’re new here, welcome aboard. This is what we do!
The only person you’re up against is you from yesterday.
If you are better today than the you from yesterday, you’re winning.
Over the years, I have mentioned the Strategic Coach program I was part of several times. A few weeks back, the program’s creator did a short (19:45) podcast about pricing. There are some principles and lessons that are just spot on for our practices.
Do you want to improve your pricing?
Are you looking for some new ways to frame your pricing conversations?
You can listen to the podcast here.
And use my show notes below to key into the parts you don’t want to miss.
@ 0:40 – The vast majority of entrepreneurs’ pricing is based on what their competition is doing, i.e., people who don’t necessarily want us to succeed.
@ 1:35 – There is no objectivity in/to pricing.
@ 2:45 – What kind of experience is the “check writer” buying? How does that experience get packaged? What do they expect for $X?
@ 5:05 – When you are scared about quoting a price, you are the only one who is scared. The confidence with which you say the price is part of the sale. In order to make yourself comfortable with your price you have to be ok with a No.
@ 5:55 – The price you charge is an investment, not a cost.
@ 6:15 – A conceptual formula for pricing … the 4 Cs – Committed, Courage, Capabilities, Confidence. If someone says no, your price isn’t too high … you just asked the wrong check writer.
@ 7:00 – The value of things is strictly what people are willing to pay for them.
@ 7:15 – Why some current baseball contracts are an example of value and pricing.
@ 9:00 – The hospitality model of pricing. Four Seasons example. Does your client feel like they are being taken care of? Connect pricing with packaging.
@ 13:15 – How to implement a new price for your service. If you are bored with your business, you are not charging enough.
@ 13:45 – Strategic Coach doubled its pricing during the Great Recession. Customers signed up because they said at the doubled price we knew who we weren’t going to be in the same room with.
@ 15:40 – Price is never based on product or service. It’s the experience. Harley Davidson example.
@ 17:00 – To get more business, don’t decrease your price … increase the experience you offer.
@ 17:20 – The big lesson. (Dan Sullivan talking)
When people ask me how they should be pricing their product or service, I tell them, “Raise the price in your mind until you’re scared.” Once they tell me they have a price in mind that scares them, I tell them to add 20% to it.
The reason for the added 20% is so that when you ask for that amount and the check writer doesn’t blink, you won’t kick yourself later for not asking for more.
The initial number is proof that you’re willing to ask for a price that scares you.
The added 20% is your commitment to yourself, your commitment to your value, and the proof that you’re willing to go through a period of courage that might include rejection because you want to develop a new capability and be better paid for how good you think you’ll be in the future.
Once you do that, you will attract a higher level of check writer into your world.
The research says price is one of the least frequent reasons buyers choose someone else. So when someone turns you down, citing price as the reason, either:
- You didn’t communicate your value correctly.
- They were never going to buy from you and are looking for an easy excuse to say no.
In real life
Is there anything more gut-wrenching in our practices than pricing engagements? And this podcast certainly flies in the face of the fee compression stories many of us have been hearing about, if not experiencing ourselves.
Do any of us want to admit that we lack the courage to price according to the value we bring to the table?
Reading that can help
– If you like what I write about, tell a colleague.
– If something resonates and you want to reach out directly, email me.
– If you think we share common interests, connect with me on LinkedIn.
– If you want a sense of how well your practice is working for you, take this Practice Self Assessment.