Transcripts
Welcome to Live With The Pricing Lady.
Speaker:I'm Janene, your hostess.
Speaker:This show is all about helping you build a sustainably profitable
Speaker:business while making an unbelievable impact on your world.
Speaker:Learn from my 20 years of experience and from my guests as we discuss their pricing
Speaker:challenges, failures, and successes.
Speaker:Pricing is a way of being or behaving in your business.
Speaker:My mission is to help you confidently charge for the value you deliver.
Speaker:Pricing is either hurting or helping your business.
Speaker:Let's make sure it's helping you reach your dreams.
Speaker:When your strategy isn't aligned with your goals, your pricing can actually
Speaker:make it harder for you to reach them.
Speaker:So in this episode of the show, we're taking a look at how to
Speaker:align your pricing strategy.
Speaker:Sit back, relax, and enjoy the episode.
Speaker:I'd like to start with a story.
Speaker:When I was in the corporate world, I was working for, with a company
Speaker:and they had a sales team and they also had a pricing problem and they
Speaker:couldn't quite get to the root of it.
Speaker:They had a strategy but year after year they weren't meeting their
Speaker:business objectives in spite of the pricing strategy that they had.
Speaker:Now part of that pricing strategy actually was related to how they incentivized
Speaker:the sales team and it turned out that that was where the problem was.
Speaker:The sales team was incentivized based on how much they sold in volume.
Speaker:And that meant that even though the strategy of the company was to go after
Speaker:profit, that any sale the salesperson made, regardless of the quality or
Speaker:the profitability of that sale, it got the salesperson closer to their goal.
Speaker:So that meant that their pricing strategy was actually at war in a sense with how
Speaker:they were incentivizing the sales team.
Speaker:And that's why in the end, they weren't able to achieve those objectives because
Speaker:the sales guys were making decisions more towards how they were going to
Speaker:be incentivized with their bonus.
Speaker:And that incentive was not aligned with the business's
Speaker:goal of improving profitability.
Speaker:And this is a perfect example.
Speaker:Even though your business may not have a sales team and you're not out there
Speaker:incentivizing them, it's a perfect example of this misalignment between the
Speaker:business goals and the pricing strategy.
Speaker:Your pricing strategy is there to help support you in achieving those goals.
Speaker:That's why it's so important, in the process of setting your prices, that
Speaker:you sit down and you think about, what are my goals and how is my
Speaker:strategy going to help me get there?
Speaker:There are different aspects of alignment.
Speaker:We're not just going to talk about the business goals today.
Speaker:We're going to look at some other areas where alignment is important and
Speaker:it's important for different reasons.
Speaker:Like the example we just showed, it's important so that your strategy
Speaker:actually helps you reach those goals.
Speaker:It's also important in terms of congruity, that you are aligned with what's going on
Speaker:and you feel comfortable and like you're doing the right things in your business.
Speaker:That kind of alignment is also important and often people feel a sense of
Speaker:misalignment in that context when it comes to topics like pricing and
Speaker:profit or money in their business.
Speaker:Now, ultimately your pricing strategy is there to help you
Speaker:meet those business objectives.
Speaker:But what goals and what types of things should you be aligning to
Speaker:when it comes to your strategy?
Speaker:Now, the first thing I said is business goals.
Speaker:So let's think about this in the context of some of the businesses
Speaker:that we are talking about here and that we're here representing today.
Speaker:So if one business goal could be to get your first five clients, and you might
Speaker:choose to do something different with your pricing strategy, then if your
Speaker:business goal was to earn a hundred thousand in a year, now those don't
Speaker:have to be mutually exclusive goals, but one business might have the first
Speaker:and another business have the second.
Speaker:And they might be offering the same thing in a similar way to a similar
Speaker:target audience, but they may end up pricing differently as a result
Speaker:of having different business goals.
Speaker:Or maybe the business goal is to earn or gain 5 percent market share.
Speaker:Again, you may have a very different strategy in your pricing in order to
Speaker:help you gain that market share than someone who's going after getting
Speaker:just their first five clients.
Speaker:Now the second area that it's really important to consider
Speaker:in your small business or startup is your personal goals.
Speaker:So what personally are you trying to achieve?
Speaker:Are you trying to fully support yourself financially?
Speaker:Are you trying to make enough to hire a cleaning lady?
Speaker:That's always been one of my favorite goals.
Speaker:You know, these different types of personal goals that you have may
Speaker:also influence what you do with your pricing strategy and how.
Speaker:Now, generally they will be somehow linked to your business goals, but
Speaker:they don't necessarily have to be.
Speaker:You may have other personal development goals related to your business that
Speaker:may also impact your pricing strategy.
Speaker:Another area where you want to align is in what I call impact goals.
Speaker:Now, in today's space, there are a lot of people who have what we call
Speaker:purpose driven businesses, where they're trying to achieve some higher
Speaker:purpose behind what they're doing.
Speaker:Oftentimes they're aligned with these sustainability development
Speaker:goals but they don't have to be.
Speaker:And these types of impact goals, as what I call them, can also
Speaker:impact your pricing strategy.
Speaker:So for example, if you want to be able to donate 10% of all the profits you
Speaker:generated in your business to charity, You may or may not choose to do something
Speaker:different with your strategy, or if you want to be able to afford to take on
Speaker:six pro bono cases a year, then you may need to do something slightly different
Speaker:with your strategy than if you're not.
Speaker:Again, it doesn't mean that you have to do something different or
Speaker:that you will, but it should be part of the consideration when you're
Speaker:thinking about setting those prices.
Speaker:And then there's one last area that It's not necessarily goals, but another area
Speaker:that's really important when it comes to alignment in your pricing strategy.
Speaker:And that's with your values, both business and personal.
Speaker:So for example, if in your business, where you list your mission, your
Speaker:vision, and your values, if your value is transparency in your business,
Speaker:Then you may do something different in your pricing strategy than someone
Speaker:who doesn't have that as a core value as part of their business.
Speaker:It can also be, you know, personal values can also influence in a similar
Speaker:way, although often they influence less.
Speaker:It really depends on what the value is and what it means to your business.
Speaker:So that's why I share with you these four areas where you want to look, am
Speaker:I aligned with my pricing strategy?
Speaker:Is there that congruency there?
Speaker:I was trying to make up a new word in case you didn't notice that.
Speaker:You know, is that congruent for you and does it make sense and is it aligned
Speaker:with what you're trying to achieve overall with your pricing strategy and
Speaker:in achieving your business objectives?
Speaker:I think one of the things that's really important.
Speaker:So the first thing that's really important to remember is that if you've sort of
Speaker:through your research, you've defined, okay, I think I can charge between, you
Speaker:know, 2000 and 5, 000, and you're not quite sure where in that range to be.
Speaker:If you go back to your business goals, which are usually going to lead what
Speaker:you define as your pricing strategy, if you're looking to gain market share
Speaker:fast, You may need to price closer to the bottom of that range in order to attract
Speaker:clients with lower prices, depending on who the clients are and if they will buy
Speaker:something that is less expensive, right?
Speaker:If they'll believe the value is still there.
Speaker:But if you're selling a luxury good, And if your strategy is more focused
Speaker:on profit and, and say luxury, we'll stick with the luxury goods
Speaker:example, then you will probably be at the higher end of that range.
Speaker:And that's why I said at the very beginning, it's possible for you
Speaker:to be able to calibrate where your prices are going to be within a
Speaker:range by understanding what your strategy is and your business goals.
Speaker:How can you go about doing this?
Speaker:The first thing is just to sit down with those four areas, business goals, personal
Speaker:goals, impact goals, and values, and write down, a couple of things in each of those
Speaker:areas that are actually important for you and your business, because then when
Speaker:you go back and you look at your pricing strategy, you can try and make sure, well,
Speaker:not try, you can ensure, Or take the right steps to be able to align to those things.
Speaker:Now does that mean that you'll always be able to make an alignment?
Speaker:Not necessarily.
Speaker:You may decide that you want to sell it really cheap and inexpensively, but you
Speaker:may later come to the conclusion that you can't make a profitable business and
Speaker:achieve your personal goals with that.
Speaker:So there's always a bit of give and take and compromise in there.
Speaker:What's really important is not to compromise your values, because then
Speaker:that will feel well, it'll feel icky.
Speaker:That was the word that came to my mind.
Speaker:It won't feel very good or positive for you, and that'll be reflected in how
Speaker:customers perceive what your offering.
Speaker:How they, react to the conversations they have with you, so on and so forth.
Speaker:It's likely that you'll feel that misalignment on a subconscious level,
Speaker:and that will be transferred into other things that you're doing in your business.
Speaker:Here's what I suggest to you do sit down with a piece of paper, or if you
Speaker:prefer, if you're an audio person with a recorder, And reflect on these four
Speaker:areas, your business goals, your personal goals, your impact goals, and your values.
Speaker:And think about what's most important in those areas when it comes to
Speaker:your business and your journey.
Speaker:Then you're going to take a step back and you're going to look at
Speaker:your pricing and see how your pricing strategy aligns with that, reflects
Speaker:those things and how it's actually helping you to achieve those goals.
Speaker:Or how it's helping you be aligned with those values.
Speaker:And that is going to help you when it comes to setting your prices, to make
Speaker:sure that you're not working against yourself with your pricing strategy.
Speaker:But your pricing strategy is actually supporting you in
Speaker:achieving what you want to do.
Speaker:That was what I wanted to share with you in this episode of
Speaker:Live with The Pricing Lady.
Speaker:Let me also share with you.
Speaker:That the next cohort of the customer compass is going to be coming up soon.
Speaker:So, if you want to understand your customers better and learn how to do those
Speaker:efforts, so important customer insight interviews than your one on one to check
Speaker:out thepricinglady.com/thecustomercompass.
Speaker:And get all the details so you can join me.
Speaker:I wish you a great day.
Speaker:And as always.
Speaker:Enjoy pricing.
Speaker:Thank you for listening to this episode of Live with The Pricing Lady, the podcast.
Speaker:If you enjoyed the episode, rate, review, and subscribe to it, then share
Speaker:it with your friends and colleagues.
Speaker:I love hearing back from you listeners.
Speaker:If you've got comments, questions, or topic ideas, go on over to thepricinglady.
Speaker:com and contact me there.
Speaker:Not sure where to start when it comes to improving pricing and profits?
Speaker:At ThePricingLady.
Speaker:com you can download a copy of my Self Assessment Pricing Scorecard.
Speaker:Find out where it's going well and where you can begin improving.
Speaker:Or just simply book a discovery call with me.
Speaker:There we can discuss what's up with pricing in your business and
Speaker:how I might be able to help you.
Speaker:Thanks once again for joining.
Speaker:Remember, pricing can hurt or help your business.
Speaker:Let's make sure it's helping you reach your dreams.
Speaker:See you next time and as always, enjoy pricing.