How do you give your prices?
Do you have them all with all the details? Or do you have them as one single-price? Whatever form you do, what’s the thing you notice when negotiating/talking to your customers re: your pricing? Do you have any push back to justify anything —if at all? Hit reply and lemme know. 🙂
Simplicity
It’s not about what YOU think/see/feel is simple. It’s about what your customers think/see/feel is simple for them (or not). They don’t know the ins and outs. They don’t know better. They do know better, though, their day-to-day. They’re experts at that. A “simple” system for them might not be something that’s simple for you. Take “my old tax booking system is simple”… until they know how simple other things can be. Because simplicity —or complexity— has not everything to do with the use,…
Friction
“You need to reduce friction” That can be true and helpful in a context. And wrong on others. On others, you need to produce friction. To create (or encourage) change, you’ll need friction. Without friction your wheels will spin on the same spot, there won’t be movement. And to change things, you need to feel that movement. Does it have to be radical? Not necessarily. Does it have to be soft? Not necessarily. It does have to be at critical points. Friction applied at the wrong spots will also…
Money is not a problem.
In a negotiation in behalf of a client, I asked my client: “Please give me the prices (at full) for these 2 programs your customer wants to buy. Money is not a problem. They have as a minimum 24K euros.” The answer? “Here. This is the price —but we can always offer it for less.” The “less” price? 16K The fear of “losing” the opportunity pushed them to go to a default state of discount, making them leave money on the table; despite having the extra approved budget. Fear… it’s not your best…
How much effort?
The more effort/passion/premium you put in requires a higher price to your market? What are your thoughts on that?
The answer is no
If… something takes you a lot of effort, you put a lot of passion into it, takes you more time to deliver, has more costly inputs, you learned it for a long time… That has nothing (or very little) to do with how much you price it for. Put it this other way: If it takes you no effort. You don’t get over-invested into it You can deliver in no time Costs you nothing You learned it in no time Would that be without value? Getting to know how to do something at a level of mastery that creates a…
No is good
Knowing what to say no to is the thing that puts you (and your business) in the expert position. It gives you clarity to choose the right fits for you. It disengages you from incurring into sunk costs (that all-nighter proposal/quote, that long pitch deck, that overexcitement into this next deal). It lets you set and respect your boundaries. It gives you the freedom to walk away. And most of it all: it lets you be the expert.
Revenue or profit.
Revenue or profit. Which one is the one you’re to aim for? Or better yet, if you need to make 500K in revenue, what would your approach be: Low price, high volume, or High price, low volume Same offering. Same inputs. What do you choose?
Basing your price
Food for thought on how pricing could be referred to. Time-based pricing: It’s focused on your time. Not on your customers’. Cost-based pricing: focused on your costs. Not on something for your customers. Value-based pricing: confusing as on what “value” is. Solution-based pricing: focused on the solution you offer (YOUR solution). Biases towards you being the option to choose. Outcome-based pricing: focused on the outcome your customers get. Transformation-based pricing: focused on what’s…
Be the dumb one
Some say that asking too many questions is either dumb, or makes it feel like an interrogation to your customer. I’d choose the former. 🙂 Think of it this way. You could approach it as if you know nothing of the solution. You stop yourself from solution-mode. And ask to understand what’s the big thing behind what your customer wants —and why they’re talking with you. Play dumb, as in “What if I didn’t know anything? How could I learn more of their challenges, and possibly help them?” That…