The New Way to Price Your Products, Offers, and Services
Episode 462: Show Notes
It’s been a hot minute since we had this conversation and we think we have some fresh takes on this taboo topic that seems to happen in every single niche, in every single industry, and that is the conversation about pricing! We have so many thoughts and ideas around this and think there are a lot of very strong opinions about what you should and should not do and so we just want to put a disclaimer at the top of the whole episode to say, “You do whatever you want, and that’s okay!” Nevertheless, we want to have this conversation again because we both have our own businesses on the side of Boss Project.
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Abagail will share how pricing impacts her marketing and clients, some complexities about pricing, and how she has felt differently about this topic over the years. For Emylee, the maker community is rampant with conversations about pricing, but she believes the questions being asked are often actually about something different to pricing. So, Emylee will pick apart what this means for her, and talk about the different conversations that actually need to be had!
Common Pricing Conversations In The Maker and Wellness Spaces
There are a lot of opinions out there that say if you offer services at a lower price point you’re taking people's business away but we want to say that it’s okay, friends – there’s room enough for us all. For Emylee, what she is seeing is a lack of awareness about how to price to be profitable. The one side of this is that there are formulas out there to follow that can help you to set your price that take all the factors into account. The other side, a conversation that Emylee sees more of, is that people have no confidence to charge a certain amount, and this is because they are looking at outside examples and comparing themselves to those. The problem with this is you don’t know what is going on internally in businesses that seem to have a similar product to yours.
From Abagail’s perspective in the wellness space, pricing seen in this way is less of a concern because she is selling an outside product. As you get experience in the wellness space you can start to charge ludicrous amounts so some people believe they should sell other products at first to make up for lost revenue, or sell specific products that unlock services. These are not concerns of Abagail’s though and she is happy not to think about these sides of the discussion. The truth is that you still have to think about marketing, selling, and educating your audience about value, and that’s what people forget when they get hung up too much on pricing. They think everything lives and dies on what number they pick to charge for their product.
Charge What You Want for Your Product: There is Room For Everybody
The fact is there is a market for all price points: You can get different quality versions of the same product for different price points. So if this is true, does it mean there is a consumer for every price point too? Of course! If you are designing a product for a specific consumer, it does make sense to put reasonable caps on the price of your product though. What Emylee can’t stand though is that in the maker community there are toxic conversations that tell makers that if they are charging too low for their product they are somehow cheapening the names of everybody and destroying the market. For Emylee, if one maker wants to charge a cheaper rate for a product of similar quality, they should be able to do so. Abagail makes the point that this should be distinguished from going and buying a mass-produced product overseas that copied an authentic piece and then undercutting everybody with that product. However, buying a product overseas that wasn't copied for cheap and selling that in your home market is fair play. Abagail does remember feeling threatened when Canva came out with an offer to basically do what she was trained to do for cheaper but the fact is it didn't actually ruin her business.
Realizing That There Is A Different Customer for Every Price Point
One way to make you feel more okay about the fact that there is nothing wrong with different price points for the same products is to stop worrying about prices but thinking rather about buying habits. Emylee tells a story of buying different couches at different prices throughout her life as her budget grew, while Abagail shares how she hasn’t spent more on clothes as she started making more money, while people that make less than her spend way more. So there is no set pattern for what people will be willing to spend on a product.
These conversations that are making makers feel bad about charging less than their competitors, or forcing them to hit the minimum price point before they feel comfortable are totally unfair. Abagail wonders if this is a trend in the maker community because it is still a fresh and young movement, and Emylee thinks this could be the case. But at the same time, those people making a noise about being undercut could just be making excuses for their businesses not succeeding! While we are saying charge what you want, we aren’t saying making the decision is not hard, but don't be happy go lucky about it either. If a price point makes you sick, honor that feeling. You are talking to a different market when you charge $8 rather than $40 anyway. People are wired to judge though. Abagail shares a story of how she saw a product online which was charging more than everybody else and she wanted it to be for less because of this. The fact is that everybody has their own filter though, and Abagail’s is just set at a lower point for that product. At the end of the day, it's okay to stay in your lane regarding what you charge and what you would pay. We got a comment on our Creative Template Shop where somebody said our products are undercutting designers and we replied to say that we think everybody should hire a designer if they can but not everybody can afford it, and with a world so big, there is no way our shop is putting designers out of work!
Different Price Points Mean Different Business Models – And Different Needs
There is a maturity that has to come with these things. Abagail remembers getting frustrated when seeing this issue of price points and competition, so she gets it! The point is if you took your energy away from worrying what others are doing and focused rather on marketing your product better, competitors would be even less of a threat! Sometimes you do need to do the math a little though with your price point – charge what you want and make it based on what you need at that time. There are different business models around these things too. If you charge lower for your product you might need to sell more and build a larger audience, and stock will be more of a concern. Higher price points bring a different set of concerns. Abagail remembers a friend who had to see so many clients each month because her prices were so low and while this wouldn’t suit Abagail, each person should do what makes them feel the best. Also, different people require different profit margins. Some people only need to make enough for groceries! The only time we have ever told anybody to increase their price though was when they said they needed to be making more!
Focus On Your Own Needs and Services Rather Than Worrying About Others
The whole point here is that when you feel most aligned with your price, that’s when you will sell more! If you are unsure of yourself, you’ll put that out into the world. Some people like to say that frequencies are 'woo woo' but there is a legitimate psychological phenomenon called mirroring. If you communicate something you don’t believe in with somebody else, they can pick up on it! Focus on yourself, what you need to charge that feels right, and how you can make your own business better. Emylee shares a story about her photography career where people would get upset when moms picked up photography as a hobby and started charging cheap prices for their services. The fact is that if something like this would upset your business then you need to focus on providing a better service. Abagail shares a real-world example of how Apple took out its competitors by simply focusing on innovation. Before Apple, computer companies would undercut and outcompete each other by resorting to all kinds of shady tactics. However, Apple rather decided to innovate and show their customers how much they needed their products – products they didn't even know they needed before! So to wrap up for today: You need to focus on yourself and what feels good and works for you. Spend the energy you put into worrying about others on your own marketing and how to optimize the services you offer. Don't let a competitor, fellow maker, or coach tell you what to charge. Charge based on your needs and remember what we told you today and you’ll be flying high in no time!
Quote This
Spend the energy you put into worrying about others on your own marketing and how to optimize the services you offer, and you’ll be flying high in no time!
Highlights
Common Pricing Conversations In The Maker and Wellness Spaces. [0:05:54.1]
Charge What You Want for Your Product: There is Room For Everybody. [0:11:50.1]
Realizing That There Is A Different Customer for Every Price Point. [0:18:16.1]
Different Price Points Mean Different Business Models – And Different Needs. [0:32:30.1]
Focus On Your Own Needs and Services Rather Than Worrying About Others. [0:38:45.1]
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, Mirroring, Needs, Bullying, Innovation, Services, Marketing, Alignment, Undercutting
