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Kai Davis is an outreach consultant who focuses on building relationships and online community. He is also an e-commerce consultant who helps businesses increase their sales. Previously he was a front-end developer for WordPress and a jazz pianist. He is speaking in September at the Double Your Freelancing Conference.
Kai's Value Pricing Journey
- What is the most important thing you can share about pricing?
- Price is subjective to each customer.
- When a customer is evaluating a purchase, they look at three things:
- The value they perceive they will receive from the product/project.
- The price.
- The cost of doing business with a consultant or product creator.
- If the customer's value gained is greater than price, it is a no-brainer for the customer to buy from you.
- Focus on increasing the value and then you can increase the price.
- The difference between the value and the price is the customer's profit.
- Sometimes when you raise your price, you increase demand because the perceived value also increases.
- By creating bundles, you can triple your price and provide more value to the customer.
- What was your first exposure to value pricing?
- Kai first learned of value pricing through Brennan Dunn's Double Your Freelancing Rate.
- The idea of pricing on value was very new to him and a bit scary.
- After talking through the obstacles, he decided to focus on just a few items and standardize them.
- Ask yourself if you can standardize your offerings and price based on value?
- Or, can you switch from an hourly or fixed rate, and price based on value?
- He flips between the standard offerings and value pricing.
- What was one of the biggest challenges while switching to value pricing?
- The hardest part was that he did not internally believe that he was worth the price he was charging.
- Think: “That is my hourly rate vs. That is the ROI we can create together.”
- Talk through the ROI with the customer, rather than haggling over the price.
- You can become an ally helping a customer improve their business, rather than a consultant who is simply a cost.
- Another challenge was becoming familiar with interviewing a customer to understand the value that can be created.
- Determining whether or not he wants to work with the customer is the prize, rather than the money being the prize.
- Some customers are challenged when providing details about their business.
- It requires developing courage to push through with potential customers.
- Value pricing is more honorable because you are not trying to maximize the amount of time; instead, you are trying to minimize the value.
- What have been the benefits to you from implementing value pricing?
- Working with fewer customers
- Working with better customers
- Making more money
- Being more respected
- Customers are more loyal
- His business is healthier
- More positive relationship with his customers.
- It allows you to focus on optimizing your relationships for multiple projects with your customers.
Creating Standardized Services
- How did you create the first productized service for your business?
- He looked at his offerings before and after his value pricing conversion, based on the audience and type of work he was doing.
- Website X-Ray (SEO audit) for a business came first – fixed scope, flat-rate offering.
- While not “value pricing”, it allows him to do a few things very well without having to write proposals.
- RoadMapping workshops have also enabled his customers to purchase discovery more quickly.
- As he improves on delivering the services, he gets a better hourly rate.
- By standardizing the process, he can get a stream of customers who want that value for their businesses.
- For RoadMapping, the customer needs to invest effort upfront on a questionnaire.
- He then sets a boundary on their call time.
- He gives them an idea of the length of the report, which is about 50% reusable (educational) and 50% customized to the customer (how to implement it for their business).
- Any reusable intellectual property continues to deliver value to the customer; there is no shame in reusing it.
- What should a consultant consider when creating a productized service?
- The key problem to implement a RoadMapping session is that people believe they have to show up with solutions.
- Instead, show up with a list of questions and allow the customer to talk most of the time.
- You want the customer to believe that you asked a lot of great questions, like:
- Where the customer is
- Where he wants to be
- Where he needs to be
- What value is present now and in the future in the business
- Go through a diagnostic procedure, rather than a prescriptive procedure. (Blair Enns episode.)
- When you find the root and source of the customer's pain, you can start to identify value.
- Do not talk to your customer; talk with them.
- Asking great questions is like coaching the customer to a deeper level of understanding in his own business.
- How did you create the three options for your Website X-Ray service?
- The options were developed based on interviews with past customers and then feedback as they worked on projects.
- He realized that there was a need for a scaled-down version of the initial service, so created Website X-Ray Express.
- Small tweaks to each item allow for more value to customers.
- Validate the amount of money that they customers are willing to pay.
- You can then scale up or down to provide more services.
- Access to the consultant is part of the value.
Writing Great Sales Copy
- How did you learn to write your good sales copy?
- The best method is to practice.
- The first sales page was not that great, but it was revised over time.
- He copied the experts(Ramit Sethi, Brennan Dunn, Nathan Barry) by hand to see how their copy was structured.
- Practicing music is a metaphor for practicing writing.
- The Brain Audit, by Sean D'Souza, taught him the importance of structure and framework in sales copy. Target these elements: Problem, Solution, Target profile, Audience, Objections, Frequently asked questions, Why you are unique, Risk reversal
- Free bonus for AOV listeners at doubleyouraudience.com/aov:
- 20-Page Guide on Value-Based Pricing Questions
- Swipe File of Value-Based Phone and Email Scripts
- Sample Value Based Proposals from Alan Weiss
- What is one of your best stories about creating value for a customer?
- A Roadmapping workshop helped a customer to sign-up four new customers, increased recurring revenue by 200% and signed a huge name in their industry to elevate their business in three days.
- The customer was able to do that before the report was even provided to them.
About Kai Davis
- Websites: doubleyouraudience.com
- Twitter: @kaisdavis
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