Hey, everyone. Stefan here from ProjectLife
Mastery.com and in this video, I'm
going to share with you some pricing
strategies for marketing. Pricing
strategies for marketing your business,
your product, your service, your time, whatever
it might be.
People often ask, "Stefan, how much should I
charge for my time, for my coaching, for
my consulting? How much should I charge for
this product that I have or this
service that I'm providing?" And the
answer to that is always based on what
people are willing to pay, what the
demand is for your time, your coaching,
consulting, or product, or service,
because that's how you know what you
should charge for it. The
demand is going to be based on a lot of
different factors but primarily the
value that people perceive your product,
service, or time being worth. Now, to give
you an example of this, let's
take coaching or consulting as an
example.
First, what I often recommend for
someone who's going to do coaching
consulting is to offer your time, your
service for free, or even a product or
service. Offer it for free at the
beginning, because if people aren't
willing to have you coach and consult
them for free, or to receive your product for
free, then how are you going to charge money
for that?
How do you expect to charge $10,
$100, $1,000 for
a product or a service if people aren't
willing to at least receive it for free?
If people aren't willing to receive
it for free, then you got to create more
value and change the perception of the value
and effectively market and communicate
that value. Then what I recommend that you do
is maybe start at a price point of
maybe $10 an hour, $20 an hour.
Something just to get your feet
wet and to see what the demand
is willing to pay, what the market is
willing to pay for that. I like to first
start off products at an initial price
at some sort of discount when I first
launch it, and then as I improve it, get
customer feedback, testimonials,
success stories, et cetera, and I make it better.
Then I can justify the demand at a higher
price point, but starting small is always
the better strategy because that will
give you an idea of what people are willing to
pay, what the perception of the value is,
and also again
give you the ability to get feedback
and improve it, get testimonial success
stories, all that sort of stuff. As
the demand increases, so let's say you're
charging $20 an hour for your
time, and then more demand, more people
come to you and you're getting busier.
Well now you can justify charging more
money. Maybe you're going to increase
your price to $40 an hour
because your time has become more
valuable. It's become worth more because
there's a higher demand for it. After
that you can raise it to $50
an hour, $100 an hour, and it can
slowly go up, and that's exactly by the
way what happened for me in my business.
I started off coaching for free when I
first got started. Developed my skills, my
experience, testimonials, et cetera, then I
started at I think $20, $30
an hour, and I slowly upped it. Now,
because I'm way much higher demand,
I'm more successful, my time is worth a lot
more money because there's an
opportunity cost for my time where I
could spend it on other things that are
going to bring more money.
It's now worth over $1,000
an hour, which is unaffordable for
most but for people that strategically
are looking for consulting or whatever
it is, I'm available for that.
That's my strategy that
I've utilized, but also it's going to be
based on the marketing that you do, the
perception of value which is very
important. You've got to always increase the
value, the perception of value of your
product or service. That could be
through testimonials. That could be in terms of
improving the benefits that your product
or service provides, solving problems
and meeting needs.
Even depends on the market
because every market, they're willing to spend more
money on different things.
What someone is willing to spend on
gardening information is much different
than what we'll spend on investing
advice, real estate advice. People will spend
more money for that because there's more
potential benefit and return that they
perceive from that as opposed to
something else.
Every market is different, and it is
useful to look at other products in
different markets and do a comparison to
see what the demand is and what the
price point is and everything as well.
But really, the simple answer again is
what people are willing to pay, because again,
if people aren't willing to
spend much, then that basically tells me that
you haven't done a good enough job
communicating the value of it and
effectively marketing it.
You can charge more money, if you look at
for example Louis Vuitton. A Louis Vuitton
purse is $4,000. It only costs
$15 to $25 to make
that Louis Vuitton purse. It has the same
benefit and feature that a $20
purse has. Some $20 purses might
even be more durable, more spacious. Why
would someone spend $4,000
on a Louis Vuitton purse versus
a $20 purse?
The difference is the perception of
value, the benefits that are marketed
through that, the brand of that. People
will spend more for an iPhone versus another phone.
People will spend more for Coca-Cola
versus the $0.25 cola that you can buy at
Safeway. It's all the perception of
the marketing and the brand, the benefit people
associate to that. That's what's going
to determine how much you can charge for
your products and for your services.
Hopefully this video was able to benefit
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