Working with clients on pricing their products or services is one of the most interesting parts of business.
As it is both a science and an art.
A science in supply and demand.
And art in human behaviour.
It’s a delicate balance.
But today, I want to discuss the relationship of value and pricing—the mixture between the art and science.
Pricing is a number that, inherently, the higher it goes, represents an expectation of greater value.
Both for the client and for the coach.
But interestingly enough, the lower price doesn’t represent zero value.
A “free” lead magnet isn’t inherently worthless because its monetary exchange is $0. It can be highly valuable to the right person at the right stage of their journey.
And by all measures, because of its $0 exchange, it has the potential, out of all your exchanges with clients, to have the greatest return on investment out of all your products and services. Wild hey?
On the flipside, it is also the least used of all your products. Statistically, lead magnets get downloaded and forgotten about. Lost in the “I really want this thing right now, then forgotten about in 10 minutes pile”. This is why some “gurus” will tell you they waste time. But, this is a rant for another day….
Now, swinging back to the inherent idea of higher price means higher value.
This is where mistakes get made in most people’s thinking. Most have never taken the time to understand what actually makes their program or service valuable.
And guess what… It isn’t them! Even though most like to think they are what makes it so.
The values and needs of the clients are actually what makes it valuable. They create value.
Not the other way around.
It’s simple, really, and this is why some people don’t buy from you. They don’t have a need or value on it and therefore they see it as valueless to them.
See, most coaches don’t understand that their ideal niche and what they bring to the table is EQUALLY as important to the value of your product and service as what you bring as the expert to allow them to extract value.
See, a client who is at point A, and requires B, C, D, E, F, G to get to point H is statistically more likely to value your product less, and pay you less, if you specialise in E and G, than a client who has A, B, C, D and F already in place and just needs E and G to take things to the next level.
And even more so, those who have all the pieces in place and just need some fine-tuning, some optimisation of one piece, let’s say D, will value you more than both of the above. This is because the more pieces a client has in place, the more valuable each piece becomes.
For example, a client of mine paid me 15k per year to help him clear any mindset or thinking issues that got in his way on sales calls. Thats it. All we did was sales call mindset 1 time per month for 24 months, or we cleaned up anything in his life that was distracting him from his performance on calls. He didn’t need skill development or tactical help. He needed to make sure his mindset was on point to make sure he converted highly. He was an Optimiser.
See, optimisation has the highest value for the person at this stage of the journey. They are paying for speed, and they already see the value they can extract from what you provide. They see ROI.
Someone who is at point A may not fully grasp the value of what you are providing or be able to fully extract the value through implementation because they don’t have the full picture in place to maximise what you are delivering for them. They are generally in the learning phase and acquiring the missing knowledge gaps that don’t always transpire into big ROIs early on.
Although the value of this is normally realised years later as other pieces drop in for these clients, which is ACTUALLY when your service would be most valuable. This is the point where they would pay a much higher premium for your services. They just became the ideal client looking for E and G, if they hadn’t already worked with you.
Now I am not saying working with any is better or worse, this is not a moral issue or a mindset issue, although it could be if you are trapped by it.
This is, in my experience the number 1 most important piece to understanding in pricing.
Where does your market or ideal client sit in regard to their journey?
When you understand this, and you can position yourself effectively to meet that need, you have more scope for pricing and being flexible within it.
Once you know this, other variables come in that also will affect the pricing, such as your business model, ideal clients’ previous investments and their financial empowerment. E.g. A mother who is staying at home is less likely to invest in high-priced products than a mother who is staying at home and works part-time. The stay-at-home mother will be willing to invest less in the same solution as the mother who works part time, as a generalisation.
So, the key is to know your clients first and what you want them to bring to the table before deciding upon a price point for your products or services.
Until next week,
Keep Smashing Growth Ceilings.
Justin Wiseman
