Hey it’s Marie Forleo, and you are watching MarieTV - the PLACE to BE to create a business
and life you love.
And this is Q&A Tuesday except it’s not a normal Q&A Tuesday.
This is very special, because I am not answering the question on this Q&A Tuesday.
Is my very dear friend who also happens to be a New York Times bestselling author of
this amazing book called I Will Teach You To Be Rich.
And my dear friend is Ramit Sethi.
Ramit, thank you so much for being here.
Thanks for having me.
Today’s question comes from Alexandra and she writes.
“I love watching your videos and I find them very inspirational!
I own a real estate virtual assistant company that’s fairly new.
I recently watched your pricing video and I’d love to hear more.
I charge per hour for most jobs ($15 an hour) and I have a hard time raising that price
for a few reasons....
1.
realtors don’t want to pay too much for a VA....
2.
I’ve had the same price for the past year and raising it now might be tough.
The agents I currently work with already understand how valuable a VA can be.
My question is, do I raise my prices and risk losing clients?
Or grandfather the old clients in and raise the prices for the newer clients?
As an entrepreneur, I’m working 7am to 2am on most days to keep up with the work while
building the business and I don’t have the funds to show for it.
I am at a crossroads where I think I might have to decide, as you mentioned in the video,
fewer clients but higher income or a lot of clients and lower income.
Any advice on this kind of situation?
Thank you so much!”
So Ramit, what do you got to say about that?
I think it’s a classic problem that entrepreneurs have where we believe if we raise prices everyone
will just desert us, and that’s just not the case.
What we’re doing is we’re making a lot of assumptions when we think that.
We think that we’re going to walk into our clients, throw a piece of paper at them, and
say, “I’m tripling my prices!
Pay me or leave!”
And that’s not the way you raise your prices.
Right?
Right.
And also, pricing is strategic.
If you’re charging $15 an hour and you’re working 7 days a week and your business is
not where it is, there’s something wrong.
And I can tell you that your pricing is probably very, very low.
Because you can hire a high school student for $15 an hour.
Right.
If you know the realtor market, you should be able to charge more if you can properly
convey your value.
Ok, well this is huge.
And I think you just hit the nail on the head about properly conveying one’s value.
And this is where I think Alexandra is really struggling.
So it’s a mindset belief but also she doesn't have the tactics or the strategy to move ahead.
Right.
Imagine... let’s put ourselves in the mind of a new mother.
Ok?
Let’s go on a quick little journey.
So you’re a brand new mother and you have this beautiful 2 day old son and you wanna
take some portraits with you and your new son.
So who do you wanna hire?
Do you wanna hire John Jones who charges $200 flat?
And he takes pictures of babies, horses, and tables.
Or do you wanna hire Mr. Richard Millington who only takes photos of newborn babies between
the ages of 1 day and 1 week?
He charges $1,000 but he has a beautiful portfolio and he can capture that moment for the rest
of your life.
And, by the way, he charges $1,500.
Oh my God.
So, of course, number 2 because you want the person who’s specialized.
Price, at that point when he’s conveyed his value, is a triviality.
Now, am I saying everyone can afford $1,500?
No.
But for that subset of clients, they can and because Richard Millington’s portfolio is
so strong and he specializes in it... he doesn't take pictures of llamas and buildings.
He takes pictures of babies.
And he knows exactly what to do to convey that.
He knows, for example, that mothers are really tired so he’s gonna go to them.
Right.
He knows everything about what that client wants.
He can charge that, and the best part is the clients will happily pay.
And that’s the entire difference of being a commodity and just saying, for example,
“I’m a VA.”
Which is problem number 1.
No one’s ever gonna pay you that much more if you just call yourself a VA.
Right.
Versus being a Real Estate Professional Assistant or something like that.
Ooh!
Which gets exactly at the heart of what these realtors want.
Right.
I love that.
And, you know, even just the languaging versus a VA and Real Estate Professional Assistant
or Professional Real Estate Assistant, completely different positioning and it’s just a matter
of a few words.
It is.
So she had a very specific question of, “How would I raise my rates?”
So let’s talk about some scripts that I might use, and I teach this to my [inaudible]
case students who want to know how to earn more money on the side using freelancing.
And I sort of script it out for them word for word because there’s a very clear way
of raising a rate where people actually respond very well to it.
By the way, I’ve had this happen, people who actually raise their rates on me using
my own script.
And I was like, “Ok, well you did it right.
What can I do?
Here you go, here’s the check.”
Did you actually feel that way?
Yes, and here’s the thing, if they were...
I didn’t feel cheated.
I wrote the script and I still didn't feel cheated because they were actually delivering
me massive value.
And I was happy to pay and I didn't want to lose them.
That’s awesome.
So that’s the whole point of a win-win with your client is if you’re offering massive
value and you show them how you’re gonna do that in the future, it’s not adversarial
it’s actually like, “Ok, I understand.
I understand that, let’s just continue doing business.”
So here’s what I might say.
I might say, first of all I might send out a little survey to my clients saying, “How
can I improve my work with you?
What is it you’re looking for this year if budget was no concern and if you could
have me help you do anything, what would it be?”
So that already is massively valuable insights.
So you’re gonna learn what they want.
Then you can go and you can prepare a letter or an email and you can say, you know, “Hi
Josh,” the client, “I wanted to just talk to you about a couple things in terms of our
engagement together.
First of all, in the last year this is what we’ve done together.
I’ve helped you manage your email inbox, saving you over 6 hours a day.
I’ve helped you refer you 19 clients generating a total of $450,000 and X dollars in commissions.
And I’ve helped you do X, Y, and Z.
This year one of the things you told me was you’re looking for A, B, C. Now, I’m gonna
be adding A as a complementary part of my services to you.
That’s because I’ve heard from a number of clients that you want that, and so I’ll
be able to do that for one hour a week for you as a complementary part of us working
together.
The other thing is, I’m becoming more selective in the clients I work with.
Now you and I have had a great time working together, we’ve generated $450,000 dollars
in revenue, and I’ve helped save countless hours.
My rate is going to be going from $15 an hour to $25 an hour.
If that’s something that you’re not comfortable with, please let me know.
I’ll be happy to refer you to someone else who might be better fit for your cost needs.
But if this is something that works for you, these are my plans for the next 30, 60, and
90 days and I would look forward to working with you together.”
Ooh!
That was so good.
I was...
I wanted to hire you or hire whoever you were talking about, it was that good.
Yeah, the beauty of it is you’re not cheating anybody and you’re not making them feel
bad.
You’re talking about what you’ve done, where you’re going, and what you can do
for them.
You know what I love about this?
Is it forces the entrepreneur to deliver more value and articulate what they’re doing
and also think ahead.
So it actually...
what you’re describing forces every entrepreneur to become a better entrepreneur, and that
I absolutely love.
Yeah, why should you get paid more if you’re not doing anything more?
Just because you’ve been around for, you know, a year?
I don’t care.
I don't care as the client.
Tell me how you’re gonna make my life better, make me more money, save me more time.
That gets a raise.
So if this forces you to be a better entrepreneur, I’m all for it.
That’s awesome.
Great, great.
This answer is, like, fantastic.
And I also know for everybody watching, y’all are gonna be like, “I want the script.”
Listen again, write it down yourself, that’s the way you’re actually gonna learn it.
Am I right?
That’s right.
Yeah.
That’s awesome.
So what we like to do always on MarieTV is challenge our viewers.
Because you know, you watch MarieTV.
As a side note, Ramit thinks...
Ramit, he thinks MarieTV is kinda crazy and he’s told me that.
Right?
Well, I just...
I don't dance for my readers.
Ok?
So let’s start with that.
Why not?
Everybody who wants to see Ramit dance for their readers, you can leave a comment below
and let us know that.
I know you maybe won't do it but... you know.
We’ll see.
Anyway, we like to challenge our viewers.
We love to challenge you to actually take what we talk about and put it into action.
So I think as a great challenge today, let’s talk about... have you ever been afraid to
raise your prices?
Or have you raised your prices and what happened?
And of course, Ramit, you might wanna add something to this.
Do you have anything to add in terms of a challenge for our readers?
Yeah, I’d love to challenge them...
I’d love to say, what... write out what you could say to your client to get them to
raise it.
Even 3 or 4 sentences.
What could you say that would deliver massive value and make them happy to pay you more?
Ooh, let’s do that one.
Let’s do that one.
So if you wanna talk about what you’ve done in the past, that’s great.
But I really love Ramit’s challenge about adding 3 or 4 sentences of the value that
you can add to your client’s life that will help you raise your rates and have them say
yes.
Let’s do it, I’m looking forward to it.
Awesome.
Ramit, thank you so much for being on MarieTV.
This was awesome, you delivered so much value, and I love having you here.
Thanks for having me.
Remember, all of the action happens AFTER the episode at MarieForleo.com, so go there
and leave a comment now.
Did you like this video?
Then like it and SUBSCRIBE and, of course, share it with your friends!
And if you want even MORE great resources to have a business and a life that you LOVE,
get your butt over to MarieForleo.com and make sure you sign up for email updates.
Because I tell you things in email that I just don't say in videos and I know you wanna
hear it.
So thank you so much for watching MarieTV and I’ll see you next time.