Here’s what we’ll cover
Today we are talking about how to charge your worth. In particular, we are honing in on how to adjust the pricing conversation you’re having with your clients. Running with the theory that price follows value, then surely we can’t be pricing anything until we truly understand the value that we are providing to our clients.
I’m giving you some examples of conversations that you may need to have with your potential clients before you set your pricing. We talk through three different examples and each example is there to help you think a little deeper about what it is that you are really helping your clients with. It’s pretty tough to sell the value of your services if you aren’t crystal clear on that value yourself!
Here’s the shownotes
How to adjust the pricing conversation you’re having with your clients
Assumption – Price follows Value.
Your job is to determine what value your clients are getting from the work you intend to do for them.
Then you need to be able to articulate that value in a way that is meaningful to your client.
Example 1; Marketing Strategist / Expert
Think deeply about what your client wants from you ultimately. If I ask for a marketing plan do I literally just want a physical marketing plan? Or do I want an endless stream of pre-qualified leads so I can sell with more ease and save time?
Level 1 – We will prepare a marketing plan for you.
Level 2 – We will prepare a marketing plan for you that you can follow month in, month out. Your marketing channels and content will pre-planned and purposeful.
Level 3 – Work with us and you’ll walk away with a steady stream of quality, pre-qualified leads to make selling easier and faster.
So, think deeply about what your clients really want from you. If I ask you for a marketing plan do I literally just want a physical marketing plan? Or do I want an endless stream of pre-qualified leads so I can sell with more ease and save time?
It becomes much less of a conversation about the ‘price’ when you speak to your potential clients from a level 3 perspective.
If our theory is that price follows value, your price can surely be higher when you’ve articulated that value at level 3.
Another example, If I’m an accountant (which by the way I’m not – that was my past life).
Level 1 – We can restructure your business and save you some tax.
Level 2 – We can restructure your business and potentially save you about $40k in tax each year.
Level 3 – Now with this level 3 example I’ll throw it back to the client with a question. We can restructure your business and potentially save you about $40k in tax each year. What would an extra $40k each year mean to you?
Well, I could pay down this mortgage much quicker,
I could take the kids on a holiday – we really need it.
I could buy the new studio I want, I’m so over renting.
All of a sudden the conversation isn’t about the boring restructure, it’s about what it really means to your client. They have helped you to articulate the value, in their own words.
Suddenly it’s less about the price and more about the result. The price almost becomes inconsequential when they truly understand and appreciate the result, the value that you are going to provide.
These first two examples are very much about moving your client towards pleasure (more money, easier sales) rather than moving them away from pain.
So think about whether your clients in your industry are more motivated by moving towards pleasure or more motivated by moving away from pain.
An example of moving away from pain could be something like this;
If a client comes to me with concerns about their low profits and they are suspicious that their pricing is not good enough, I could respond for example in 3 different ways.
Level 1 – I can help you with your pricing, we will put it all together in a spreadsheet and give you a template (here I’m selling the tool moreso than the result)
Level 2 – There are a lot of reasons your profitability could be poor, what is this lack of profitability doing to you? It’s so stressful, i have trouble sleeping at night, I’m thinking about throwing the towel in on the whole business.
Level 3 – There are a lot of reasons your profitability could be poor, what would it mean to you if this continued on as it is now for another 2 or 3 years?
I will just have no choice but to close the business down and get a job, I’ve worked so hard and the thought of that makes me feel physically ill.
I’m going to have to look at selling the house,maybe we can downsize, this mortgage is so difficult to maintain.
My husband and I are always arguing about money at home, it’s just awful walking on eggshells all the time.
Now your potential client is thinking what will happen if we do or don’t fix the problem. They have articulated the value in what you’re going to do for them. The conversation shifts and the focus on your price has completely changed.
Your job? Think really deeply about the Level 3 conversation you need to be having with your potential clients, then price yourself accordingly and remember, price follows Value.