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Standardizing Value Through Products with Kai Davis

Standardizing Value Through Products with Kai Davis – 058

August 18, 2015 by Kirk Bowman Leave a Comment

http://traffic.libsyn.com/artofvalue/058-Standardizing-Value-Through-Products.mp3

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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

Filed Under: Creative, Episodes Tagged With: Internet marketing, Self-confidence, Web development

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