As you end 2019 and plan for 2020, I encourage you to review your pricing strategy. Think of pricing as marketing and your pricing strategy should align with the maximum impact you want to make.
You should never be asking yourself the question “How much would people pay for this?” If you start with that strategy people will always want to pay less than the value.
Instead I suggest asking a better question, “How much is the transformation worth to my ideal customer?” When you understand your ideal client’s struggles or challenges, your offer should align with the solution they are seeking. Sounds simple enough but I see many offers that don’t communicate the value in the solution.
According to Forbes contributor Scott Southron in a recent article on pricing strategy, suggests that you put customer value first, and says “Many of the widely used technology pricing strategies focus heavily on company revenue and internal metrics rather than end-user value. “Many companies take the simplified approach of calculating their product development and production costs and then adding their desired margin, and they use that information to set pricing.” Let’s say your ideal client simply wants to make more money in their specific business niche. How specifically will your solution get them to that result the fastest?
Do you have a proprietary system that’s proven in terms of results others have gotten from it? How are you demonstrating customer value first?
Communicating Your Offer/Service
Your offer must solve and problem and speak to the end result of how your ideal client’s life will be changed or transformed.
Before you communicate your offer, consider flushing out the answers to these questions:
- What is the specific struggle is your ideal customer experiencing right now? How are they describing it in their own words?
- What circumstances are currently present in their lives? What do they not have that they want?
- What thoughts do they say to themselves? How do they feel? (you speak to their feelings)
- Why haven’t they been able to solve their problem?
Are You Attracting Your Ideal Client?
Think about the value someone puts on themselves when they don’t want to invest? These are the people who want all the answers on a $10 ebook versus a $1,000 training. If you can’t hypothetically sell your service let’s say for $1,000 because the people who see it are not willing to spend more than $10 to learn something, then you don’t have the right audience.
Stop to Identify Your Ideal Client
Okay, so you think you’re heard this all before, but I still want to reiterate that if you are not making the money you want from your services then you probably are not speaking to the right audience. It is worth the time to answer the following questions in detail again.
- Who is your ideal audience/customer? (Be specific)
- Who is NOT your ideal audience/customer?
- What are their biggest challenges or pain points? (Externally such as don’t have the right clients)
- What are they saying to themselves internally? (Such as what am I doing wrong?)
- What is the consequence to them if their struggling persists? (might be in the same place a year from now)
What Impact Do You Want to Make?
What transformation comes from your service? By the way, people only buy for the result they want and no other reason! So review these questions:
- What is the result now after solving their challenge or pain point? (example, they are now viewed as an expert)
- How do they feel? (externally – such as confident and credible)
- Thinking of themselves in the future, what else becomes possible for them? (example, how does this flow into other parts of their life)
Pricing Your Services
Think about the value of the transformation you provide. If you are pricing a service at $1,000, ask yourself if you are delivering that same amount in value. Remember, not everyone is your customer and that doesn’t mean you discount your price because someone says they can’t afford it. Your job is to attract that ideal customer that sees the value and how you are delivering on the results they are after.
