(dramatic instrumental music)
- So far, so good?
Okay, so now I'm gonna get into some strategies.
Okay?
What you can do today.
Why am I spending a lot of time?
Basically, I'm trying to convince you.
I'm trying to sell you on the idea,
why to charge higher prices.
Because most of the time it's not strategy,
it's just limited belief.
Okay?
It's cuz if you want to, tomorrow you go back to business,
could you increase your prices yes or no?
[Man] Yeah.
You could.
It only takes you a second to do it,
but it takes a lot of convincing
for you to be comfortable doing it.
That's why I'm spending the first chunk,
just to see okay how high is high?
How much could you actually charge?
So, lets talk about how to set prices.
One way you could do it is, value.
Based on value.
How much a values deliver?
If you could deliver X amount of value,
few people to value, and people pay
for their value not ours.
Says what you think is valuable,
might not be valuable to your prospects at all.
Well you think, "Oh, this is so great, or this feature,
"or this service I provide so great."
Maybe they're thinking I don't even need it.
Don't care.
Pay for their value not yours.
The amount of pain that they have,
the greater the pain, the more you could charge.
The greater the pain, the more you can charge.
Is what you sell a nice to have?
Or is it a must have?
Is it nice to have?
Or is it must have?
Let me use a pretty extreme example.
Okay, lets say if I have a headache,
I go to the doctor and say give me some pills.
How much am I willing to pay for that pills?
How much?
They're bottle pills.
They'll take my headache away.
How much?
- [Man] Not much.
- Not much?
- [Man] How many headaches?
- 10 bucks?
20 bucks?
50 bucks?
- [Man] Whatever it costs to get it.
- Yeah, lets say $100.
Okay, I go to my doctor, I have cancer.
How much will I pay for the treatment?
- [Man] All you have.
- Every penny that I have.
Am I gonna be, the doctor say it's gonna be $10,000,
do you think he give me a discount?
(audience laughs)
Because I have so much what?
Pain, so the greater the pain, the more you can charge.
We turn on investment.
Money at a discount.
We turn on investment.
So lets say if you are providing digital marketing service,
and you charge $2,000 a month at $24,000 a year,
but you have the ability to help your clients
to make a quarter million dollars a year.
Okay?
10 times the return, so it's we turn on investment.
They pay you 24 grand,
they gonna make a quarter million dollars.
So, you're selling money at a discount.
The more money, the greater the result;
the more you can charge.
The more you can charge.
And they contrast pricing.
This is very interesting.
Contrast pricing, I've used this
very successfully in my career.
So, its a strategy, very powerful one.
Lets say, if I conduct a workshop
at $5,000, $5,000 workshop.
Okay?
And then I have 20 entrepreneurs participate.
20 people, $5,000 I'm selling to a very small group
of entrepreneurs, because it's expensive.
But contrast pricing is after I've done the workshop,
I can go back to a bigger marketplace and say,
"You know what, that workshop
"that people just paid $5,000 for,
"I've recorded the whole thing and the work with everything.
"You can have it, exactly the same thing.
"CDs and DVDs are online for $995."
Suddenly the 995 seems to be, okay that's a good deal.
'Cause other people pay $5,00, I can have access
to the same thing, at the comfort of my own home,
at my own convenience for only 995.
Does that make sense?
Because the contrast.
But if I go up there and say I have this package
it's $995, ooh.
Okay let me think about it, because there's no comparison.
Does that make sense?
So contrast pricing, think of how you could use that
in your business.
Here's one of my quote, "If you're charging market rates,
"you're basically letting your competitors
"set your rates for you."
If you're charging market rates,
you're basically letting your competitors
set your rates for you.
Other factors that might affect pricing, payment terms.
If your asking for a lot of money,
well you can give them a payment terms.
So say, or going back to digital marketing service example,
instead of telling the clients I charge $24,000
and they might freak, well it's $2,000 a month.
Oh, I can do that, same thing, so payment terms.
Guarantees, it will affect pricing.
What kind of guarantees you have.
It's a no questions asked versus
is it conditional guarantee, or maybe a no guarantee
that will affect how much you can charge.
It means how much you stand behind what you sell.
Right?
Guarantee.
Or it could also be results kind of driven, results based.
That your clients may pay you something upfront
and then pay you the rest after they get certain results.
So, it's more performance based.
The more performance based, the more you can charge.
That's been my experience.
Pay after X result.
Okay?
So, these are some other factors.
Got it so far?
Yeah, okay.
People afford, what they want to afford.
Repeat after me.
People afford, what they want to afford.
Don't judge, don't judge.
They afford, what they want to afford.
And the big lesson is, stop discounting
and start adding more value.
Stop discounting prices, and start thinking of ways
they can add value to your offer.
Don't discount.
Now does that mean you will never, ever, ever
discount anything that you do?
No, sometimes like Jeremy's got a good example, right?
Jeremy's got a very good example.
Jeremy's filming, but he's recently got a very large order.
It's from a account that in the future could be worth
a lot of money.
So in the first batch, usually he would make next to 35%.
35, yeah 35%, but instead this first batch of order
he will only make 18%.
But it's a pretty big order, like 30 somewhat grand.
Right?
So first order, to get them in, because in the future
it's worth so much more cuz he has so much
out of backend products he could sell to this account.
So, sometimes you could discount,
but very strategically.
Not just discount,
because my competitors lower they're prices.
I wanna be competitive.
I will charge the same thing.
See a difference?
Yeah.
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