Revenue will *kill* your business
Wait, WHAT?! In the long term, revenue can (and will) kill your business. And this is not about the lack of revenue, but of your revenue stream. When left unchecked, you’ll get played by how much money you can be making. However, how much money goes into your business means nothing when your margins are thin. And here’s where pricing comes into play. Pricing is not about growth —or even revenue. It’s about how to maximize the margins to keep the business at its best. This is why pricing…
On revenue and your business.
Yesterday’s message was about revenue will kill your business. That is, if you’re only looking for it as the metric to follow (revenue = vanity metric). Here’s the thing Revenue alone doesn’t dictate or even diagnose if a business is doing good or bad. Profit, on the other side, does. While having multiple revenue streams is a great thing to have, if you don’t keep those on check, all your efforts will make little difference. It’ll be ultimately a race to zero. And the worst is that you can…
Killing innovation
Following vanity metrics kills innovation. If you’re following revenue as your key metric, you might be on a sketchy path. This might be obvious: higher margins would let you get a healthier business. High vs Low Margin One will let you serve your market at your best and focus on how to bring your customers even more value (value = what they do care about). The other, might be so thin that will focus you on how to keep most of it. And this —guaranteed— will default you to a state of…
I’ll bankrupt your business
Dumb strategy Problem creation Fake Inauthentic Waste money Have you seen businesses claiming any of these? If not, then what’s the reason to say the opposite? If you’re in business, your customers will expect (as the bare minimum) for you to… bring a smart strategy come with problem solving / solutions be the real/authentic you create value (and return money) If your messaging is about what everybody else claims, what would make you different? What is that thing that makes you stand out?…
Ed Sheeran Live: a scam
If you hear you can see Ed Sheeran playing live, next to you, and all you have to do is pay $2. What’s the first thing that comes to your mind? What if next to it, you can get a ticket to Ed Sheeran’s concert that’s 300+ euros, and sell it to you for 200? (Just to humor me, if you don’t like him, pretend you do for this one time 😁) Which one would you choose? That’s what happens to your customers when you go on the lowest possible price to “win” deals. Here’s proof: [Youtube vid 5:55 mins]…
Not giving your price
Common (and sort of intuitively ) advice: “Go, talk to your prospect/customer, talk shop, ask and discuss their budget. But don’t give them a price. That should only be shown in your proposal.” Take the other road: talk price. Early. Why? Because a price has very little to do with their budget. A budget is a prevision of what (god knows where/how) they “should” have for X thing. It might be that the client means well, but without the right expertise, it’s a self-diagnose with high odds of…
Double your price
“When something is not selling, double the price.”Rory Sutherland Having an offer “too good to be true” gets your prospects to be afraid of what you’re offering. There’s gotta be a catch. Lower prices won’t make it more attractive. In fact, they’ll deter your market. Think of it this way: We’ve been trained all of our lives to associate higher value with higher price. To appreciate more the things that cost us more, over the cheaper ones. Give it a try Choose one of your offerings and double…
Promises, promises.
“Price is the representation of your promise.”Ron Baker Just that. What does your price convey to your market?
Using the same tools as your competition
That doesn’t define that you’re supposed to charge as them. The thing that makes it different is not the tools used, but how you use them, and the perspective you take. Using the same tools can lead you to outstanding, different results than the others (after all, we all have a brain, and how we use it is what makes a difference), results others could not achieve. Remember, it’s not about WHAT you use X, or HOW you use X. It’s about how YOU help THEM get what they want. It’s always been about…
What about their budget?
Even when you hear me say (over and over) that your price has nothing to do with your customer’s budget, you can always find a workaround. If their budget is way off your minimum, you have 2 options. Saying No. Saying Yes. Wait… Saying Yes? To lower than MY minimum??? WTF, Rod? You can say yes, in a way that’s profitable for you. You may not deliver the whole thing you have in mind, but there might be something you could do, and make it profitable for you (I’ll say it just in case anyways:…