Pricing, Packaging, and the Ultimate Value You're Providing
Episode 552: Show Notes
One of the things that we see creative entrepreneurs doing consistently is assuming that they know what their potential client or customer thinks about the value of what they offer. These kinds of assumptions ultimately leave you with a very messy blueprint for overcoming your own limiting beliefs and appropriately pricing your digital products and services. Today on the Strategy Hour Podcast, we want to address what really makes up the value of what you offer and how your potential clients or customers see what you offer because, believe it or not, they are not one and the same thing!
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How can we provide the utmost value, but also, who is deciding what that value is? Whose responsibility is it to see X results or receive X benefit? As creators, we put so much pressure on ourselves and tie our identity and self-worth into the results that our clients and customers are getting. We also equate our feelings of validation with whether or not we believe that an offering is any good. This is certainly a big unlearning both Abagail and Emylee have had to undertake over the past few years!
Tune in as we break down what really goes into pricing and packaging, how pricing correlates with value, and where your clients actually find the most value. We also uncover the main thing you are missing when packaging your offers, specifically when it comes to digital goods and services as opposed to tangible products, and the unexpected way that your clients get exactly what they want. If you struggle with deciding on your big-ticket items, then this is the episode for you!
Think About Value for Both You and Your Clients
Early on in your business, you might be inclined to price based on the amount of time it takes you to complete something, and this applies to tangible products as well as digital goods and services. If you stick with this formula, however, it means that the better, faster, and more efficient you get at something, the less money you are going to make! Now, tell us that makes sense? We suggest ditching this method in favor of viewing value both with regard to yourself and your client. What does this client need to bring you? How many clients can you realistically work with in a week, in a month? What does your business need to provide for you? If you can reasonably only work with between three and five clients a month, and this is your full-time job, you best believe you need to be charging accordingly!
Emylee’s formula for designing packages starts with identifying the number you need to achieve in order to quit your job, replace your income, or reach a specific annual profit, whatever that is, and then working backwards to figure out how much your business needs to make in order to reach that number. Now, look at the amount you need to charge per client in order to reach your goal; how does it make you feel? Can you sell a package for that amount? What can you offer to justify that amount? With your unique skill-set and experience, what can you put into a package that would make you feel good about selling it at that rate? Until you are ready to charge a certain amount, you’re going to have a hard time attracting people that are willing to pay that.
Avoid Toxic Pricing Advice
There is some toxic pricing advice floating around the internet. People say things like, “Just double your rate” or “Charge more per hour, you’re worth it!” Blanket statements like this can be dangerous. While you have to wrap your head around value and what you feel comfortable charging, there are still market caps in various industries that you don’t want to be naive to. If you are ultimately trying to get to a higher price point and feel good about it, we believe that you need to start thinking about what you can do that is super specific. The more specific you can be with what you offer, the more tangibly you can explain the value of that offering and the more your potential clients will see themselves working with you. Another formula you can use to unlock recurring income as a service-based provider and not have to worry about constantly chasing new leads is to lock in consistent, recurring clients on a retainer. Yes, if you do the math, it will mean you are earning a lower rate per hour, but it also means that you have reliable income over a longer period of time. Be wary of get-rich-quick pricing strategies that focus on hiking up your hourly rates without taking valuable long-term client relationships into account!
Don’t be Afraid to Outsource!
Abagail and Emylee have 100 percent hired someone to help support the backend of a product or a service. Sometimes, that was very evident to our clients, and sometimes it wasn’t evident at all. You don’t have to get permission from your client to outsource! We do, however, think that it is important that you include this kind of information in your contract language because you never want your clients to feel like you have pulled the wool over their eyes. Ultimately, you get to decide what works for you, but there are definitely shady ways to go about this. Just make sure you’re not one of those people who charge $500 for a logo, then hop onto Fiverr and pay someone in the Philippines $5 to do the work for you! Lastly, outsourcing the tasks that you don’t have the capacity or specific skill-set to fulfill will mean that you make a little less profit but, if you deliver amazing results and you maintain an excellent client experience, then it’s still a win-win!
How to Ensure Your Potential Clients See Value in Your Offering
Ultimately, you’re going to come up with the magic number that fulfills your needs, makes the work worthwhile for you, and that you feel comfortable charging. On the flip side, how do you ensure that your potential clients see value in what you are offering? Client feedback is key! And there are ways to build feedback mechanisms into your business, from client surveys to good old fashioned phone calls, responses, referral cards, and conversations. For Emylee, consistent feedback was all she needed to be reassured that the value was there for her clients, and she could even raise her prices because she knew that what she was providing was not only meeting but surpassing her clients’ needs. You’re not actually providing whatever it is you say that you are providing; you are unlocking so much more for your client than you can even imagine! When you remember that you are here to serve, it’s important to understand that you don’t get to decide how your service impacts your clients. They do! So, make sure you hear from them.
Another way to create value is in client rapport and focusing on client relationships. How are you making them feel throughout the process? Depending on the service you are providing, some have to lean into this a little more than other industries. That’s okay. You just need to be aware of it. You also need to figure out what you value and where you want those values to shine through in your business.
Choose an Abundance Mindset Over a Scarcity Mindset
Instead of thinking how much you can cut back in order to save $300 a month, there is so much value in shifting your mindset and thinking instead about what you can do in order to make an extra $3,000 a month. Abagail and Emylee would certainly rather come from a place of abundance than one of scarcity! How you do this personally starts with asking yourself what you want to spend extravagantly on and what you don’t care about as much and could easily be frugal about. For example, you might love coffee and feel great about splurging on an expensive espresso machine at home or going out to get coffee from your favorite coffee shop every day, but it doesn’t matter to you what type of car you drive. Instead of spending extravagantly in all areas of your life, choose which you are going to be more frugal in and which you are going to indulge in. The same applies to your business. While you might not want to spend a whole lot of money on a new website or family photographs, your client might. You don’t get to decide what they spend extravagantly or frugally on; they do! Give them the opportunity to do so.
The Unexpected Way Your Clients Get Exactly What They Want
You might be really clear about how you can exude value and showcase what you offer. In the same way that you can’t decide for your client where they see value in your offering, you also can’t assume anything about their experience. If a client appears to lose interest in one of your products or services after purchasing it, you can’t automatically assume that they haven’t gotten value from your offering and you owe it to them to make it up to them. If you haven’t received a complaint, they might have gotten value out of the product simply by making the purchase! Let that sink in. Think about when you’ve had a terrible day and you end up at Target. You don’t really need that thing in the dollar basket, whatever it is, but it isn’t necessarily about the object itself. It was the experience of buying it that made you feel better for 15 minutes. Sound familiar? It’s important to understand that everyone does the same thing! People will buy high-end courses and masterminds, sometimes spending tens of thousands of dollars, and never follow through on them simply because it made them feel good at the moment. It might sound crazy, but if your client isn’t unhappy, they likely already got the value they needed.
Quote This
You’re not actually providing whatever it is you say that you are providing. You are unlocking so much more for your client than you can even imagine!
Highlights
Thinking About Value for Both You and Your Clients. [0:07:34]
Avoiding Toxic Pricing Advice. [0:13:15]
Don’t be Afraid to Outsource! [0:20:34]
How to Ensure Your Potential Clients See Value in Your Offering. [0:27:50]
Choose an Abundance Mindset Over a Scarcity Mindset. [0:34:07]
The Unexpected Way Your Clients Get Exactly What They Want. [0:36:21]
ON TODAY’S SHOW
Abagail & Emylee
The Strategy Hour Podcast
We help overwhelmed and creative entrepreneurs break down their Oprah-sized dreams to create a functioning command center to tame the chaos of their business. Basically, we think you’re totally bomb diggity, we’re about to uplevel the shiz out of your business.
KEY TOPICS
Pricing, Packaging, Value, Client Relationships, Abundance Mindset
