Art Of Value

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The Value of Social Media with Mojca Marš – 079

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Mojca Marš is a social media consultant who founded her own consultancy, Super Spicy Media. She resides in Slovenia and works with customers worldwide. She started out as a copywriter at an advertising agency and is proud to say she wears a dinosaur one-sie.

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Raising Your Rates

  • What is the most important thing you can share about pricing?
    • Raising your rates is something you can do on a regular basis.
    • She initially charged a fixed price, but it was a low one.
    • When she became faster at getting better results, she gradually began to raise her prices.
    • As she is building her own brand, there are people who only want to work with her and she can charge higher prices because of it.
    • She was busy enough to offer to schedule with prospects 3 months later or refer them; they chose to wait and pay a higher price.
    • She built her personal brand through Twitter with the dinosaur onesie pictures and her unique view of life.
  • What was the business model you implemented to double your income?
    • It was a very basic model, as she was not familiar with business plans.
    • She charged low prices to get customers, but she raised them over time.
    • Once she started creating more value for her customers, she raised the prices and her customers had no problem with it.
    • She raised her price 200% for a new customer and got it.
    • She has consistently raised her rates.
    • She read Brennan Dunn‘s book, Double Your Freelancing Rates, to learn about value pricing.
    • She sought out – intentionally – different people with the same mindset.
    • Jonathan Stark, Kai Davis, and Philip Morgan all connected with her on Twitter and that is where she learned more.
    • You will stumble upon people who tell you to charge by the hour, but she gets higher value from those who are not.
    • Before she got fired from her advertising agency, she got paid by the hour and thought it was stupid.
  • Why do you publish your consulting prices on your website?
    • She wanted to cherry pick the people who want to work with her.
    • Publishing the rates helps her weed out the companies that cannot afford her or had low budgets.
    • She productized Super Spicy Sessions at a lower rate.
    • When prospects contact her now, they know what to expect price-wise.
    • Currently, she does not go above the posted range, but she tailors the packages and prices per customer's needs.
    • She has one customer who has been with her over a year, but usually she works with a customer for 1-3 months and then provides a detailed strategy for them to continue on their own.
    • Providing the price for the lowest level of engagement allows her to charge higher prices.
    • If the customer wants to do a “test drive”, they are able to hire her for a Super Spicy Session to see how she works; she does not do it for free.
    • The initial customers she was working with at very low prices were the worst.
    • The customers who pay her higher rates now recognize the value and are better customers.
    • You can make more money with less work by focusing on value, creating a win-win situation and making work fun.

Social Media Conversations

  • What are the steps in your sales process?
    • The prospect contacts her via Twitter or through email.
    • Initially, they would email back and forth and then write a proposal, which was time- and effort-consuming.
    • Now, she schedules a 15-minute Skype call and asks them questions.
    • Based on their answers, she provides options in an email with a brief description.
    • The email is very goal-oriented with options that suit the prospect's business.
    • Her ROI is much better now that she talks to the customer.
    • She pushes them to acknowledge their problems in the call and puts them into the mindset so she can help.
    • During the call, she drops knowledge bombs, which create value for the customer, to convince them to hire her.
  • What is one of your favorite questions to ask during a value conversation?
    • What is the most painful problem you have with your social media profiles?
    • The customer may need a little prodding to dig deeper to answer the question.
    • Once they dig deep, they often acknowledge that the problem is much bigger than they originally thought.
  • How can social media increase sales for a business?
    • If you are a freelancer or consultant, you can establish your personal brand via Twitter to increase your sales and prices.
    • Brand awareness helps people notice you and your offers.
    • Paid advertising is a way to ramp up your sales, like with Facebook ads.
    • She uploaded her email list to Facebook, and created an ad, offering a lower price if they purchased her book before it was published; she got a 300% return.
    • Companies these days are not creating value for their followers; they just promote themselves.
    • Teaching people and creating value will develop a bigger following.
    • Gary Vaynerchuk wrote Jab, Jab, Jab, Right Hook, that talks about how you have to give before you take or sell.

ROI from Social Media

  • How should a business measure the impact of social media?
    • Gary Vaynerchuk's video talks about what is the ROI of your mother to explain how to measure social media's impact.
    • You need to know how to use Facebook properly to get the ROI.
    • Sharing promotional posts will not get you what you want.
    • You have to nurture the followers first.
    • Once you are in the selling mode, you will be able to sell much easier because you gave so much.
    • The most important social network for your business depends on your business.
    • Facebook has a wide reach and is a good starting point for all companies.
    • Twitter is a great resource for software companies.
    • You can target your audience more specifically on Facebook than on Twitter.
    • The targeting is so precise that it is a little scary, but it can give you a great ROI.
    • Social media is evolving by the day, so there is not anything that is “hot” right now.
    • Companies and freelancers are not focusing on paid advertising, even though it is very inexpensive on Facebook.
    • Brennan Dunn has a great article on Facebook ads.
  • What is one of your best stories about creating value for a customer?
    • An advertising agency was doing a Facebook advertising campaign for a customer.
    • The agency was not able to meet the ROI they promised to their customer, so they contacted her for paid advice to keep that customer.
    • She provided another option, to modify the advertising campaign over the weekend for a fixed price.
    • Up until they had spoken to her, during the first 3 weeks of the campaign, they had reached 20% of the preset goals.
    • After she modified the campaign, the end customer was able to get 15,000 likes within 5 days to meet 50% of the preset goals.
    • The agency ended up surpassing their goals.

About Mojca Marš

The Story of My Pricing Journey with Carrie Dils – 054

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Carrie Dils is a WordPress developer and business consultant, a recommended Genesis developer by StudioPress, and an author of WordPress training courses at Lynda.com. Personally, she is a lover of rescue dogs and a craft beer connoisseur.

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Getting Started in Web Development

  • What is the most important thing you can share about pricing?
    • Every time she has raised her rates, she has increased the quality of her customers.
    • By charging higher rates, she attracts a different kind of customer – one who values her as a consultant, not just a technologist.
    • People who are at lower price points tend to not value the business side.
    • They are not looking for a business solution; they are looking for the lowest price to execute a specific task.
  • Can an NDA have a negative impact on the customer relationship?
    • An NDA can start off with an adversarial relationship with the customer.
    • Requiring an NDA demonstrates a lack of trust.
    • You cannot create high value if there is not trust.
    • The spirit behind asking for an upfront NDA is the equivalent to asking for a prenup before you go on a first date.
  • How did you get started as a web developer?
    • After college, she only knew graphic design and a little HTML.
    • She was a freelancer and worked on banner ads for KLTY in the late 90s.
    • Carrie did not like cubicles and left the corporate world behind, thinking she would start her own coffee shop.
    • She learned she did not want to open a coffee shop after working as a barista at Starbucks.
    • From there, she started freelancing as a web developer.

Pricing for the Web Developer

  • How did you price projects when you were getting started?
    • Initially, she was at a loss for how to charge.
    • She threw a number out there – $50/hour.
    • If no one tells you that you are too expensive, then you are not charging enough.
    • She pushed her hourly rate upward until people said she was too expensive.
    • The frustration of running out of time inspired her to search for another possibility rather than billing by the hour.
    • She moved to a flat-fee quote.
    • She is dipping her toes into the area of value pricing.
  • What were the advantages and disadvantages of quoting a fixed price?
    • “Scope” can be a scary word.
    • If you guess what a project will take and quote based on that, without digging into the scope, you can lose.
    • When you scope a project up front (discovery, road mapping, needs analysis), your customer can invest at a lower dollar amount.
    • At the end, the customer gets a document of what the core issues are and what the goals/outcomes need to be.
    • The document is educational and enlightening to the customer.
    • There is a comfort factor by starting that way so that the customer trusts you.
  • What is the difference between recommending a solution vs. technology?
    • If you are talking about what to develop, they will tend to go toward technology.
    • If you are talking about why, they will tend to go toward a solution.
    • Curtis McCale shared his initial prospect email with Carrie, that has three simple questions:
      • Why now?
      • What does success look like?
      • What is your budget?
    • Those three questions allow your customer to think more critically about his project.
    • From a comfort standpoint, it is a benefit to your customer to believe that they are not locked into the entire process with the consultant.
    • Due to purchasing requirements, the customer has to send out an RFP and can use your road mapping document to do so.
    • The IT Smile Curve by Ed Kless demonstrates that road mapping and delivery are where the value of a project is.
  • Where are you succeeding in your value pricing journey?
    • She is doing a good job with consulting:
      • Asking good questions.
      • Engaging in great conversations.
    • She is struggling with connecting the dots between the value from the consulting and the price being charged for the product.
    • She has pushed her numbers on the fixed price, but she is not basing her price on what value the project delivers.
    • She sees her journey as an evolution and appreciates that it does not have to be all-or-nothing.
    • Curtis used a weekly billing rate for a while and Carrie tried it out. It caused unnecessary anxiety for the customer.
    • You have to try things out, experiment and see what works.
    • Ed Gandia was also value pricing and did not realize it.
    • The History of the Billable Hour is an eye-opening episode, to realize from where the practice came.

Adding Value Through Accessibility

  • How did you land your training gig with Lynda.com?
    • When she left Starbucks, her dad bought her a subscription to Lynda.com for her birthday.
    • She learned WordPress from Morten Rand-Hendriksen.
    • In 2013, she was at WordCamp (community event for WordPress “nerds”) and met Morten.
    • Several months later, Morten recommended her to Lynda.com.
  • What is the value of accessibility to a website owner?
    • Web accessibility is the idea that your content is accessible to anyone, regardless of the device being used to access the content.
    • You enable more people to consume your content and provide a greater opportunity to reach the customer.
    • Some people believe that web content should be more accessible because it is the right thing to do.
    • However, the business case for web accessibility is that you have a more cutting-edge website.
    • A website that looks good on a mobile device is given priority over sites that are not on Google.
    • US government sites, as well as other countries, require accessibility.
    • For example, inserting the image ALT tag for screen readers provides an alternate description of the image.
    • Podcasts without transcripts prohibit the deaf from getting your content.
    • The business benefit is that Google likes transcriptions.
  • What is one of your best stories about creating value for a customer?
    • Carrie enjoys maximizing impact by doing something that can be used repetitively to be helpful, like her episodes on Lynda.com.
    • They continue to deliver value to people's lives, despite being a one-time investment on her part.
    • The lasting value has been personally fulfilling to Carrie.

About Carrie Dils

The Real Goal of Value Pricing with Ben Furfie – 049

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Ben Furfie is a web designer who specializes in front-end development. Business wise, he focuses on lead generation for small to medium size businesses. Technology wise, he uses WordPress and the Genesis framework. He started out as a writer and then began to pick up the technology while working on magazine projects. He recently spoke at WordCamp in London on value pricing.

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First Exposure to Value Pricing

  • What is the most important thing you can share about pricing?
    • There has been an explosion of people becoming interested in value pricing, especially in the WordPress space.
    • They are misinterpreting the purpose of value pricing as a way to increase their prices.
    • The real purpose of value pricing is that it enables you to match your price with what the customer can afford and where they see the value of the investment.
    • In the first 3-6 months, there is a significant jump in what you charge.
  • What was your first exposure to value pricing?
    • His sales director was taking a value price approach, but he did not realize it initially.
    • He did not understand it as “value pricing”, just as a good way to price services.
    • He realized what it was called in August 2014 when he listened to the Art of Value Show per a recommendation from Carrie Dils.
    • He knew the concepts and not to use hourly billing, but he was not using real value pricing concepts.
    • He started with project-based fixed pricing.
  • Why did you decide to implement value pricing?
    • He recognized it as the model his former boss had been using.
    • That company had won a large project on the basis of a value-based presentation.
    • The key point of the proposal was to reduce the cost of visas, staff, accommodations, and food.
    • They replaced onsite IT staff with remote management with the same benefits.
    • It improved the quality and reduced costs.

The Rewards of Value Pricing

  • What have been some of the rewards from value pricing?
    • The first customer he value-priced wanted a new website.
    • He quoted the site and the customer another provider whose price was half of Ben's.
    • The customer called back after their website was hacked.
    • He learned about their pain points and why they wanted the site to get an idea of the value.
    • He tripled his initial price, and the customer accepted it because the customer saw the website as a way to create leads instead of a cost.
    • He explained that it was not the price, but a percentage of the return they were expected to receive.
    • To get results, they needed to invest.
  • What has been the range of customer reactions to value pricing?
    • He has won deals he did not think he would.
    • He has left money on the table.
    • He has lost deals when the price was more than the competition.
    • Value pricing should be bound by the value of the results.
    • When he reduced the price to try to win a deal, he still did not win the project.
    • He learned from the mistake by analyzing aftward, discussed with his girlfriend and colleagues and realized the price was out of sync with the competition, despite proving the value.
  • What are some of the factors you consider when setting a price?
    • Ask to who else are they are speaking.
    • Some will answer; others will not.
    • If you can understand your competitors, it will help with the pricing.
    • If he learns there are RFPs being put out, he will not submit a bid.
    • Make sure you are talking to the decision makers and know who has sign-off on the project.
    • Going through a purchasing department can kill a project. Ben prefers to work with small to medium size businesses to lower the bureaucracy.
    • Look out for red or orange flags.
    • If the customer describes himself as a DIYer, it is an orange flag.
    • How much pain is this customer going to create? Prices are usually higher for high-maintenance customers.
    • Do they have content? If not, it is a red flag, and they need to talk about how to make that happen. It could increase the price.

Discovering the Customer's Value

  • What are some of the value questions you like to ask a customer?
    • His magic question is why.
      • Why now?
      • Why did you not do it six months ago?
      • Why are you not doing it six months from now?
      • Why are they looking to do the project at all?
    • Any permeation of the question “why” that gives you greater understanding of the value they are seeking.
    • You can even ask, “Why me?”
    • The more information you have, the more you will understand the value.
    • Look for easy wins.
    • How are you planning to measure the value you are capturing from the project?
    • If the customer is willing to have the conversation, it is more likely you can help them.
  • How do you respond when a customer resists a value conversation?
    • He channels Curtis McHale.
    • If the customer is not willing to have these conversations with you, then it probably is not a good fit.
    • The power of “no” is real.
    • Find out budget and timing if possible.
    • With more information, you can recommend a better alternative to do their project.
    • Decide if the customer is someone you can turn around or not.
  • What are some of the questions you have heard about value pricing?
    • Does it work?
    • Do I believe my lies?
    • A lot of people believe they do not create value.
  • What is one of your best stories about creating value for a customer?
    • With a previous customer, there were some major changes in the way the industry worked.
    • They have been able to capture more and better leads from the history of the searches.
    • They have been able to stabilize the company and have kept two people employed in an industry where they cannot grow.

About Ben Furfie

Clarity, Competence and Confidence with Kary Oberbrunner – 045

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Kary Oberbrunner left his day job to pursue his dream job. From that experience, he wrote his sixth book, Day Job to Dream Job. Because he has written six books, he now coaches authors through a program called Author Academy Elite. His next event, Escaping Shawshank, will be in August 2015 with Dan Miller.

The Three Cs

  • What is the most important thing you can share about pricing?
    • Pricing is a reflection of self-image.
    • You will never outperform your self-image.
    • You will never outprice your self-image.
    • If you see yourself as a “2”, you will not be comfortable charging higher prices.
    • Self-image is like a thermostat.
    • You will self-sabotage because you are not comfortable charging higher prices.
  • What is clarity, the first “C”?
    • Clarity is essential.
    • Clarity knows where you are going, what you value and represent.
    • Clarity is the accurate vision of yourself and your business.
    • Most customers want to see if you have clarity before they are willing to invest in you.
    • A customer wants to trust where you will take him.
    • Clarity is the outward reflection of the inner value.
    • Confidence comes when the external reflects the internal.
    • “What makes you think you are the next American Idol?” – Simon Cowell
    • Income follows as a result of clarity, competence, confidence, influence and impact – in that order.
  • What are competence and confidence (second and third Cs)?
    • Competence is the skill set that you achieve and bring to the relationship.
    • If you are competent, you have a mastery of a skill set.
    • If you have clarity and competence, you can still lack confidence.
    • False humility is when you lack confidence.
    • People will not buy if you do not have confidence.
    • Drive-through drill:
      • Think about yourself as a drive-through restaurant.
      • Someone asks what you serve.
      • You must quickly answer because confusion repels and clarity attracts.
      • Have a VPS (value proposition statement) ready.
      • As an example, Kary “ignites souls“.
    • After you have clarity, competence and confidence, you can gain influence, impact and then income.
    • Most people do not know what they can give others because they are too good at it.
    • When you share what is in your cup, you can have influence and make an impact.
  • What is the relationship between the three Cs?
    • On the return from a conference, Kary boarded a plane and sat next to a woman.
    • He focused on a project as he had a deadline.
    • The woman engaged him later in the flight, and they discussed writing books.
    • He asked how she was stuck, and he worked with her for the last hour of the trip.
    • Kary helped flesh out her book and did not charge her or sell her.
    • She thanked him and asked for his card.
    • She emailed him and at that point he offered to take the coaching to the next level.
    • She sent him $5000 without being invoiced or priced.
    • Jimmy Dean Sausage Strategy – give people a taste and work from an abundance perspective.

Taking Action

  • Why is the language we use important?
    • “The early bird gets the worm” is a story of scarcity.
    • There are a lot of worms out there.
    • You can share your wisdom in a collaborative way.
    • Thanking someone for their time is a poor use of language.
    • The result is worthwhile, not the time.
  • What is a one-sheet and how do you create one?
    • Take action; it will never be perfect.
    • As you act, clarity will come.
    • Questions to ask to create a one-sheet:
      • Who is the market?
      • What are you offering?
      • When? – Do not say TBA or “coming”. That is confusion.
      • Where?
      • Why?
      • How much? How will it happen?
    • Create just enough information to ask people to lean in and ask for more.
    • Have the discipline and ethics to follow through.
  • What are the types of guarantees?
    • Limited Time Guarantee (like Best Buy) – You can get a refund, but it needs to be quick. There are several rules to follow to get it.
    • Extended Guarantee (like Lowes or Home Depot) – Buy the appliance and see if you like it. If, after 90 days, you do not like it, they will come and pick it up.
    • Risk Reversal Guarantee (like Zappos) – Buy the shoes and wear them for a year in your house. If you do not like them, they will take them back.
    • Bad hires cost a company three times their annual salary, so Zappos offers a Risk Reversal Guarantee for employee training.

Market Before You Manufacture

  • What does it mean to “market before you manufacture”?
    • It is a philosophy, a mindset.
    • It is the minimal viable product (MVP).
    • In a content-creation space, you do not need to spend a lot of money to manufacture and then market.
    • A movie trailer sells to you before they manufacture.
    • A one-sheet is the vehicle to get your best thinking on paper before you manufacture.
    • When you get your first sale, someone says, “I believe in you.”
    • Sometimes, the first sale is to yourself.
    • Simon's question is a mirror. The new question, “Are you the next American Idol?” is not the same.
  • What is one of your best stories about creating value for a customer?
    • Early in his career, Kary left a comfortable job.
    • There was financial pressure when he went out on his own.
    • He met with a customer and listened.
    • He returned with a proposal and explained why it would help and what it would hurt if he did not act now.
    • He dated the proposal – always use an expiration date.
    • He took massive action to deliver outstanding value.

About Kary Oberbrunner

Pricing Tips From Real Estate with Casey Lewis – 019

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Casey Lewis is a consultant, helping people get out of debt. Additionally, he is a real estate agent. This episode shows his perspective on value in those areas.

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What is the most important thing you can share about pricing?

  • If you can't help solve a problem or add value, it is OK to walk away from a sale.
  • Sometimes the best way to serve a customer is to not serve them.

How does pricing work in residential real estate?

  • Real estate agents can charge the percentage they choose between the real estate brokerage and the buyer, so there is an opportunity to add value.
  • Pick your own commission rate (8-9%) by enticing the buyer's agent to show your house over the other houses.
  • Price is one of the biggest parts of a real estate transaction.

How does marketing affect the real estate price?

  • The real estate agent is responsible for helping set the price marketing. The seller is responsible for the condition of the house.
  • Condition and marketing are the other two parts and you can increase price based on those things.
  • You can add value by taking pictures with a professional photographer.
  • Under promise and over deliver is a general rule of thumb that can apply to all businesses.
  • Coaching, with a money-back guarantee, has some perks that Casey doesn't bring up during the initial consultation, like getting his books and some tools.
  • Airplane ticket pricing is a good example of how different people are priced differently.

About Casey Lewis

Value Pricing Is Good for the Customer with Troy Dean – 012

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Troy Dean is from WP Elevation, which is the first and only business accelerator program for WordPress consultants. He is a musician (guitar) and voiceover artist. He began building websites in WordPress in 2000 and transitioned to running an agency in 2009. Two of his most prominent customers include Jessica Watson, who was the youngest girl to sail around the world, and they recently redeveloped the QuickBooks Blog.

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Pricing is Arbitrary

  • When you were a kid, what did you want to be when you grew up?
    • On Troy's show, this is always his first question.
    • When he was a kid, he wanted to be a performer – a rock star or an actor.
    • He was and still is addicted to connecting with a large audience.
    • While he has played music and acted, he leads a tribe in his business as part of this addiction.
    • After running a workshop from 7am to 9pm, he was completely exhausted, but on a high from having such an impact on people's lives.
  • What is the most important thing you can share about pricing?
    • It is completely made up; it is totally arbitrary.
    • Melbourne is the home of coffee and every café has a different price for the same soy latte.
    • You have complete control over your own pricing because there is no formula.
    • Pricing can free you to think creatively about how to attract the people you want and repel the people you don't.
    • If you trade time for money, there's a ceiling on how much you can earn as an individual and a company.
    • You are restricting your income if you have an hourly rate.
    • If you are asked for an hourly rate, you are probably being price-shopped for the cheapest rate.
    • An hourly rate is an arbitrary figure that two parties agree on when they can't agree on the value being transferred in the transaction.
    • Your job is to highlight, illuminate and tell the story of the value you will be adding.
    • Bartering and negotiating becomes an issue when you quote a number of hours and an hourly rate.
    • Tom Willmot of Human Made, whose customers include Skype, gave him the best advice when it comes to competing on price: look around and make sure you are deliberately priced higher than everyone else.
    • If you want premium customers, to produce a premium product, and to be in a premium business, then make sure your price is premium.
    • If you can understand the problem you are solving and the value you are adding, it becomes easier to set a price.
  • How would you counsel the freelancer who is billing by the hour?
    • Just stop billing by the hour.
    • With new customers, you simply reinvent yourself.
    • With legacy customers, it is more difficult.
    • To switch to value pricing, stop mentioning features and technology, and start mentioning benefits.
    • If you can consistently highlight the benefits or the headaches that you can solve for them, you can then present investment options and avoid the hourly rate conversation.
    • If your customers won't switch, you might have to fire them.
    • Most customers don't want to switch providers and will have a conversation with you about changing the way you do business together.
    • You are doing your customers a disservice by not having a sustainable profitable business.
    • Value pricing aligns the customer and the provider.
    • As a web developer, charging by the hour, you don't have to worry about what happens after the website launches.
    • If you are value pricing, you are more invested in the customer and care more about the result.
    • Stop being a hired hand and start being a consultant, asking value questions.

Asking Great Questions

  • What is one of your favorite questions to ask during a value conversation?
    • Why do need a new website?
      • What are the objectives?
      • What are the goals?
    • Go wide on the answers, then go deep to discover the truth.
    • What is the most important of those things?
    • What does success look like in 12 months?
    • Once you start asking the questions, it changes the perception of the prospect.
    • Be an entrepreneur, not a technician, as mentioned in eMyth.
    • Humans have published more information in the last 2 years than we have in the history of the world, due to the internet.
    • Your customers are well-informed and have access to technicians through marketplaces, causing a price war.
    • There will always be someone who will do it cheaper than you if you leave your technician hat on.
    • You can't buy someone through oDesk, who cares about the success of your business and understands the value you are adding.
    • Deeper questions you can ask include:
      • What is the conversion rate after you get a lead?
      • What is the average new customer worth to you?
      • What does your business look like in 12 months?
        • How many hours per week are you working?
        • How many staff do you have?
        • Who is your perfect customer?
        • How many customers do you have?
        • What are the customers worth to you?
        • What kind of projects are you working on?
        • What's happening in the media?
        • Are people asking you for interviews because you are a thought leader?
        • Are you working 3 days a week because the business is running like a well-oiled machine and you are spending more time on the beach with your family?
    • Small business owners love talking about their business and their success stories: Tell me about a home run you hit out of the park.
    • The more you understand the people behind the business and their drivers, the more value you can create for them.
    • Get comfortable asking uncomfortable questions.
    • “People don't care how much you know until they know how much you care.” – Dan Kennedy (internet marketer, quoting Theodore Roosevelt)
  • How do you overcome the fear of asking value questions?
    • Practice a lot.
    • Get comfortable saying the questions out loud.
    • Preface by saying that you are determining whether or not you can help them succeed.
    • Assure confidentiality.
    • Explain why answering the questions is important.
    • The quality of a relationship is defined by the quality of the questions that we ask.
    • Get comfortable sitting in the awkwardness.
    • Be quiet and wait.
    • Be willing to walk away.

101 Ways to Elevate Series

  • What was the catalyst for the “101 Ways to Elevate” series?
    • WP Elevation is the only business accelerator program for WordPress developers.
    • Many people in the WordPress space are coming from a creative background and need business training to help them be good consultants.
    • Rework encourages you to look around your business and see what you can package up and sell.
    • Their customers were asking for their business expertise, so they created the members-only program.
    • They deliberately priced the service so that people would actually pay attention and want a return on the investment.
    • 101 Ways to Elevate is a free podcast to inspire WordPress developers, but it is applicable to other businesses.
    • Troy was asked to speak at a conference and decided to inspire people rather than being a “how-to” person.
    • He came up with the idea of elevating yourself in the eyes of the customer, allowing you to increase your prices.
    • He got through all 101 slides in his session, which was recorded, but with bad audio.
    • He shot a new video in his office and put it online, giving away the slide deck as a PDF lead magnet.
    • He made the same content into a 101 individual video blogs, launching the podcast at the same time.
    • Get creative in your marketing. For example, a New York City pizza place set up a members-only premium option giving members the opportunity to buy more pizza.
    • Premium pricing and positioning can occur in any industry with courage, creativity, and work.
  • What is one of your best stories about creating value for a customer?
    • WP Elevation teaches the importance of getting recurring revenue into your business by selling maintenance plans.
    • One of the members said that for the first time in a long time, she took a 4-week vacation on the beach while money still came into the business because of the recurring revenue.
    • Another new customer said they were twice as expensive as any other proposal on his desk, but he went with them anyway.
    • Theirs was the only one mentioning return on investment and adding value while the others mentioned only technical features.
    • They were seen as the experts because their pricing was set accordingly.
    • Any great price comes with greater value to the customer.

About Troy Dean

Pricing Covers a Multitude of Sins with Matt Riopelle – 009

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Matt Riopelle is a project management and creative specialist. He helps creative professionals create value for their customers. In fact, he helps match customers with a team of creative professionals who can deliver the most value. He started with experience in the financial sector, where he was working directly with customers and managing teams. Five years ago, he moved into the creative space. He received his B.A. in Management from Northwest Christian University.

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Getting Pricing Right

  • What is the most important thing you can share about pricing?
    • It is more fun to make money than try to save money.
    • You can only cut costs so much.
    • Growth and profit are where you find the most opportunity.
    • Pricing covers a multitude of sins.
    • If you get your pricing right, it is almost impossible to not run a thriving business.
    • Pricing is the best lever you have to influence your business.
  • What was your first exposure to value pricing?
    • He went through a workshop with a business coach who followed Alan Weiss.
    • You are not selling time; you are selling value and results.
    • He read Value Based Fees a few years later and realized that he had already based a lot of his business around those theories.
    • Afterward, he joined a creative agency, where he became the face of the company to the customer, putting pricing in his hands.
    • He did not know how to price the work he was doing and did a fixed-price based on hourly rates.
    • As he got better at writing proposals, he started to listen to the customers and then convert their value needs to a price.
    • Value pricing hinges on taking a deep dive with the customer to understand why they are hiring you.
    • Why me? Why now? Why this thing?
    • Understand the value you offer and be willing to walk away.
    • First, you need to see the value you help create.
    • Then explore value with your customer.
    • Lastly, provide the pricing.
    • Take your time understanding the customers needs.
    • Slow down and get to the root of the problem.
    • All kinds of money-making opportunities will expose themselves if you are patient.
  • What is your counsel to someone who is skeptical about value pricing?
    • How is your current business model working for you?
    • Is it making you the kind of money you want?
    • Are you working as a professional or an order taker?
    • Are you giving each project your best work or are you busy punching a timeclock ?
    • Try it and see how it works with your next customer to see how many opportunities arise where you can offer more value.
    • Every rate (by the deliverable, hour, etc.) has a ceiling.
    • You have already set an artificial limit on your income.
    • Value pricing is limited only by your ability to uncover value for the customer.
    • The conversation is non-linear; it is an art.
    • You have to learn the art of conversation to master value pricing.
    • Your curiosity about value has to drive you and be woven into your ethic.

Value Pricing Questions

  • What are some of the questions you like to ask during a value conversation?
    • What got you into this business? Why did you start this business?
    • Why did you come to me?
    • Why is now the right time to do this project?
    • What would the next 6 months of your business look like if we do not do this project?
    • Identify the urgency and potential effects on the business (numerically and otherwise).
    • How will this help your image/brand if you do this?
    • You need to find multiple levels and streams that have brought the customer to reach out to you.
    • Get Matt's 10 favorite value questions by signing up for his newsletter.
  • How can an online questionnaire help quality a customer?
    • Qualifying questionnaires should not be about defining scope.
    • They should, more, set the tone with the customer and give the customer a way to opt out.
    • He had a customer refered to him and he assumed the customer would be a good fit.
    • Red flags came up while they were talking, so he sent them his questionnaire; they opted out.
    • Your process should be a turnoff to certain customers, to allow them to disqualify themselves.
  • Why should you say “no” to a bad customer to remain available for a good one?
    • If the customer does not fit into the holes of your process, then you should not engage. It is not the best for your business.
    • You cannot let a scarcity mindset forfeit what makes you successful.
    • Fundamentally, what we have to deal with is fear.
    • Taking on good money with a bad customer is not going to get you the return you want.
    • You do not know what price context the customer has when they come to you.

Freedom lies in being bold.
– Robert Frost

You Are Not a Flatbed Truck

  • How is freelance pricing similar to renting a flatbed truck?
    • You can rent flatbed trucks from Home Depot by the hour.
    • When we charge by the hour, we are no different from that flatbed truck.
    • You hire the truck to do a certain task and you pay for the amount of time for that task to be completed.
    • If you are billing by the hour, as a creative, you are doing the same thing.
    • You could rent the truck from Home Depot, Lowe's or U-Haul, and it would all do the same thing.
    • You commoditize yourself that way.
    • With value pricing, price becomes a non-issue, depending on how well you position your value to the customer.
    • When you demonstrate value by saying you can solve the pain, price becomes inconsequential.
    • Being beyond competition puts you beyond price comparison.
    • Implementing Value Pricing by Ron Baker is a great book, but Matt is trying to target creative clients.
    • The existing books do not talk about how to sell the service to filter out the good customers from the bad, so Matt's will focus on that.
    • He wants to the book to help every creative turn “pro”.
  • What is one of your best stories about creating value for a customer?
    • He helped a team price a proposal to the customer.
    • As they got into the discovery process, the customer made it clear that meeting face-to-face was very important to him.
    • All of Matt's proposals have three options.
    • Matt suggested that, within the three options presented to the customer, they add a once per week, in-person meeting, which the customer had to travel for, to the highest option.
    • The customer chose the highest level option because he wanted all their attention.
    • The customer paid 50% more than he originally intended for that project.
    • The customer's budget is never the budget, once you discover value.
    • You can triple a customer's budget if you truly discover value.

About Matt Riopelle

The Impact of Strategic Pricing with Jim Medema – 008

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Jim Medema is a software consultant and trainer with over 20 years of experience, specializing in the FileMaker platform. He went to school to get an English degree at Westmont College. However, he got into technology when he started selling Macs to schools.

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Pricing With Confidence

  • What is the most important thing you can share about pricing?
    • Learn how to talk about your pricing, and validate it confidently and clearly to your customer.
    • If you cannot articulate it clearly, you are lost.
    • Validate that what you are providing and how you are providing it will be worth every penny they will pay.
    • People can smell fear.
  • What did you do to build your confidence with pricing?
    • It took a customer asking why in regard to pricing to figure out how that they needed to provide validation upfront.
    • Because an IT department resisted a solution, they identified how much money each feature would save them.
    • After that experience, they learned to deliver an ROI statement with each estimate.
    • Make your price look like a bargain.
    • Always talk about the value of what you are doing vs. the desired outcome.
    • Customers need to hear the benefit they will receive, rather than what the cost is.
    • When they present an estimate, it tells the customer what they need to budget, rather than what it will cost.
  • What questions do you like to ask during a value conversation?
    • A developer can listen to a customer and know how to reduce a situation from 3 hours to 3 clicks if you ask the right question.
    • Examples of questions to reduce cost or increase profit:
      • How many sales quotes do you generate per week?
      • How many employees are generating quotes?
      • How many quotes does the best employee generate per week?
      • How many quotes does your least experienced employee generate per week?
      • How much vacation do the employees get?
      • Do the math.
      • How much time per week do you spend looking for paper in file cabinets because you do not have it electronically?
      • Is there stuff you cannot find?
    • Examples of questions to reduce risk and minimize loss:
      • What is in an employee's head vs. what is documented?
      • How can you mitigate training time?
      • How can you document to prevent loss?
      • Is the lack of communication causing lost work?
    • What is the value of the customer's company, should the customer choose to sell?
      • Do not own a job, own a business.
      • The E-Myth Revisited is a great read for creating processes in a small business.

Managing Software Projects

  • How do you price your software projects?
    • They work hourly on very small projects.
    • If there is a larger project, they create a scoping document.
    • The scoping document is billed at 25-35 hours and delivers a 30-page report, including:
      • Executive summary of business
      • ROI statement
      • ERD (entity relationship diagram)
      • Documentation of tables, layouts and reports
      • Integration with other software
    • Because there is a blueprint, they can plan different phases and stay in scope.
  • How do you avoid scope creep in a software project?
    • The scoping document is used as a reference throughout the project.
    • If something unanticipated arises, you can weigh it against the value it would create.
    • Then, you can provide the price and the customer can weigh the cost vs. the value being created.
    • Create a scope change document that reflects the outcome of the discussion.
    • Make it easy for the customer to say yes.
  • Why is pricing so hard for software developers?
    • Pricing is extremely difficult for creatives because establishing the value of a logo or a piece of art is a challenge.
    • For non-creatives, you can look at time and risk.
    • Hourly billing, especially for new developers, is a pricing challenge because you try to think of the whole thing at once and it is impossible.
    • You need to know what kind of questions to ask and have the experience to ask them.
  • How has strategic pricing impacted your business?
    • He had to figure out how to talk to two customers about working together to create a product. They were in the same industry and needed the same thing.
    • Jim experienced a 35% increase in one year due to strong pricing, following to Kirk's advice.
    • If you have an idea of where you fall within your field, you can explain and justify the value you bring to your customer.
    • If you are just competing on price, your customer can find someone else cheaper.
    • If you are looking for bigger projects and customers who have money to spend with you, you have to be able to speak knowledgeably about value.

Business Tips for Developers

  • What was the subject of your business session at FileMaker DevCon?
    • The session was called Starting and Growing Your Business as an Independent Consultant (Requires paid membership to access).
    • The purpose was to explain to developers on how to run a business.
    • The developers at the conference are great developers, but not experienced business owners.
    • Passion is not all needed to start a business.
    • Do not quit your day job until you have a structure in place.
    • Make sure that you have sales coming; build lead generators to drive sales your way.
  • What did you learn from your research for that session?
    • He was surprised by how many businesses fail in year one (37%) and year two (25%), specifically in the IT industry.
    • People, who were well-known in the community, have also struggled.
    • Build your own community: Accountant, attorney, insurance agent, mastermind group.
  • What is one of your best stories about creating value for a customer?
    • The largest system he built was $250,000.
    • The business requirements were massive and it is an enterprise system.
    • It became the poster child for the sales conversations that he now has.
    • They cross trained fifteen staff and prevented hiring another 3 people because of the solution.
    • One of the employees had not taken a vacation in a decade due to her workloads.
    • Whenever she left, her desk would get so piled high that she chose not to take any vacation.
    • After running for a month side by side with the new system, she took a 3-week vacation and she came back to only that one morning's work.
    • The Company A/Company B project previously mentioned was the best price he ever got paid.

About Jim Medema

Pricing Is Important for Freelancing with Curtis McHale – 007

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The typical freelancer spends his or her energy on the technical craft–writing coding, design UI, creating plugins, etc. Yet the most important skill for your success and livelihood is pricing. By learning to price well, you can be selective about your customers and the type of work you do. And, you can actually work less while making more money.

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Learning to Price

  • What is the most important thing you can share about pricing?
    • Serve your customers well by making sure that your price is worth the return on investment.
    • Focus on serving the customer well and pricing will follow.
    • Refer the customer to someone else if they will not receive a good ROI.
  • When did you realize pricing was a skill you needed to learn?
    • Become technically proficient at your job first and then focus on the business.
    • Double Your Freelancing Rate was his inspiration to change his business model.
    • Start reading to learn about pricing and business.
    • His business doubled after he shut off the TV and started reading.
  • How did you price when you first started your business?
    • He blindly guessed using an hourly rate.
    • The faster you get at your skill, the less you make billing by the hour.
    • Many developers learn this and switch to flat-rate billing.
    • When you become faster and more knowledgeable, you should be making more.
  • What was the next step in pricing for your customers?
    • Flat rate was his next step.
    • Initially, he did not charge for scoping.
    • He was guessing and sometimes made as little as $25/hour.
    • Curtis now does weekly pricing.
    • The business is not just his business; it is a partnership with is wife.
    • Your spouse or partner should definitely be part of your business.
    • Mastermind groups can help you with your business.
  • How do you apply weekly pricing in your business?
    • Context switching is a challenge for Curtis.
    • He is able to maintain focus on a project and start where he left off the previous day.
    • Experiment with pricing and find what works for you.
    • Curtis considers the customer, what is needed, including adjusting up for dealing with bureaucracy.

The Value of Onboarding Customers

  • How do you start the value conversation with a customer?
    • If a customer has not evaluated what their membership site is worth, they start there.
    • He asks about the current value they are receiving and how they want to increase it.
    • Cart drop is another area. 50% abandonment is normal, but you can recoup up to 30%.
    • When there is resistance to the questions, he will accept a range.
    • If the customer will not answer the questions, it is a sign of an adversarial relationship.
    • If he cannot verify with numbers that he can help, he is not willing to guess.
    • Caveat: Sometimes you need to eat.
  • How do you conduct the onboarding process with a customer?
    • Every customer, with a very rare exception, gets the same email with the same 5 questions:
      • Why do you need this feature?
      • Has anyone internally been asking for the feature?
      • How are we going to measure success?
      • What is your budget? (Curtis is willing to work with ranges.)
      • What is your timeframe?
    • He may revise the first three questions based on the specific need.
    • If they claim there is no budget, he will offer a price range until he hears it is too much. (Then you know the budget.)
    • You have to like the customer.
    • Financial stability helps you say “no” to customers you cannot serve well.
  • Do you take value into account when you are setting a price?
    • He is just starting to take value into account.
    • He is looking at intangible value as well as a technical standpoint.
    • Reducing time spent in certain activities is a value gain as well.
    • You can discover value that the customer has not even considered, which can increase the budget.
    • Enter the relationship as a consultant and partner, not a coder.
  • Why is it important for a freelancer to learn about pricing?
    • Do not guess.
    • Pricing feels hard.
    • Be bold with your pricing.
    • Guessing does not ensure that your customer is getting an ROI.
    • The Price is Right by Chris Lema will help you price your business.
    • Charging hourly is the biggest mistake a freelancer can make.
    • For weekly billing, Curtis gets paid in advance for the work.
    • By billing weekly, both the customer and Curtis can walk away if it is not working.

Customer Objections and Software Bugs

  • How do you answer the question, “Have you ever done this before?”
    • This question references his blog post No, I Haven't Built ‘Exactly' Your Solution Before.
    • The answer is probably not.
    • Curtis builds things that have not been built before.
    • The customer must make a magic leap to see how the other things apply to them.
    • No one is your business; no one has your exact needs.
    • Every situation is truly unique.
    • Part of a previous solution might be able applicable, but not often.
  • Why is it your fault if the customer does not recognize value?
    • Any good contractor will look for the reason it is his fault.
    • If you have a bad customer, it is your fault.
    • If you are an expert, act like it.
    • Do not let the customer drive the ship.
    • As a hobbyist photographer, he was able to advise a customer on how to improve a video presentation to create value.
    • Because you serve your customer well, you get paid well.
    • Do you send cards when you begin/end a project?
    • Provide service so good that your customer will not go somewhere else.
  • How do you explain “bugs happen” to a customer?
    • In custom software development, there will be bugs.
    • Buy off-the-shelf software if you do not want bugs.
    • You should account for bugs in your budget.
  • What is one of your best stories about creating value for a customer?
    • On a Friday, they could not sell a $10K piece of software.
    • By Tuesday, their online store was working and they made the ROI with the first sale.

About Curtis McHale

Curtis McHale has been a web developer in the WordPress space for six years. He specializes in e-commerce and membership sites. Often he is the “go-to guy” when nobody else can get it done. He pursued a counseling degree at Columbia Bible College, but later discovered his true calling was web development. He enjoys bike riding and made a 4-day bike ride from British Columbia to the Oregon coast for BeachPress.