Transcripts
Hello and welcome to Live with the Pricing Lady.
Speaker:I am Janene, your hostess, and I am so excited to be here with you today.
Speaker:Now we are getting back into the swing of things after our summer break.
Speaker:And today I want to talk about a topic that has come up a lot recently.
Speaker:Actually, I've gotten this question quite a bit.
Speaker:Now in the past few weeks, I've given like three or four workshops
Speaker:and I've delivered two webinars.
Speaker:So there's been a lot of Q and A sessions and a lot of people have been
Speaker:asking me about time based pricing and or about going to packages.
Speaker:So let's have a conversation about moving from time based pricing to offering
Speaker:packages in your service based business.
Speaker:Now, this is a great topic for any business who offers services of any kind.
Speaker:So even if you're a product based business, but eventually, or even right
Speaker:now, if you're offering services, this is good for you, but it is especially
Speaker:important for those of you who are doing coaching, consulting, and freelancing.
Speaker:So why it is important for you to shift at some point in time
Speaker:away from time based pricing.
Speaker:Now I have another podcast episode where I talk about the fact that Time
Speaker:is just the wrapper your services are delivered in and that is so very true.
Speaker:That has to do with the value that you bring.
Speaker:Time based pricing isn't actually linked to the value.
Speaker:They (your clients) don't get value just from the time that you spend on things.
Speaker:They get value from your experience and your know how, your ability to help them.
Speaker:And so one of the reasons that you don't want to use time based
Speaker:pricing is it's not actually linked to the value that you deliver.
Speaker:And that's where I'd like to start this conversation because you
Speaker:know me, I am all about the value.
Speaker:Funnily enough, in the last cohort of my course, the fair price formula, one
Speaker:of the ladies said, Janene, you should call yourself a value evangelist.
Speaker:And it's very true.
Speaker:Value is important, especially if you're a purpose driven business.
Speaker:If you're a business that brings added value compared to the other guy
Speaker:(or gal), if you want to be able to differentiate yourself and what you
Speaker:offer, then you have to look at the value.
Speaker:It is so important.
Speaker:And if you're going to say, I bring more value than others, then you're going to
Speaker:want to know how to charge for that value.
Speaker:A lot of times when we're talking about pricing, we're
Speaker:talking about capturing value.
Speaker:And that's just a fancy schmancy way to say, get better prices, but value capture
Speaker:is actually you being able to say, yeah, my product or my service delivers this
Speaker:much more and my price refracts that.
Speaker:So that is the first reason why you want to move away from time based prices.
Speaker:The second reason is that time based prices actually make you a commodity.
Speaker:So then, you know, people can just compare one hour to the other, even
Speaker:though they don't really understand what they're going to get out of that hour.
Speaker:So by Commoditizing yourself into an hour or a day rate, then you make
Speaker:it easier for customers to compare something, but they may actually
Speaker:not be comparing similar services.
Speaker:So then maybe you appear to be more expensive, but they don't understand
Speaker:that they actually get so much more.
Speaker:They just know that you call yourself a coach just like the other guy or gal,
Speaker:or they know that you just deliver, let's say, plumbing services, just like
Speaker:someone else delivers plumbing services.
Speaker:But we all know that there are different levels and different types
Speaker:of service providers out there.
Speaker:So if you move away from time based pricing, you actually take yourself
Speaker:out of this commoditized space.
Speaker:And the third reason and maybe even the most important reason over the long term.
Speaker:But what is the third reason here that you want to move away from time
Speaker:based pricing is time based pricing doesn't actually grow with you.
Speaker:So what do I mean by that?
Speaker:Well, when you start out and you're early in your business, you may not have all
Speaker:the wisdom and the tools, you may not have created systems, you may still be finding
Speaker:your way a little bit, and so things are going to take you a little bit longer.
Speaker:If you're paid by the hour then they're going to pay more.
Speaker:Simply because it takes you longer to do things.
Speaker:But, as time goes by, and you develop those systems and tools, and you develop
Speaker:the shortcuts and hacks and the ways of working that help them get results faster,
Speaker:because you work more efficiently and more effectively, then you're going to be
Speaker:charging them less to get better results.
Speaker:And that's what I mean by it doesn't grow with you.
Speaker:So these are three reasons why it's important for you Even if you're not
Speaker:ready right now to think about okay There's gonna be a point in time where
Speaker:I'm gonna want to make this shift from time based prices to packages.
Speaker:So why packages?
Speaker:Why do you want to consider doing this?
Speaker:So we looked at the reasons not to do time based, but let's talk about packages.
Speaker:One of the things that packages do for you is it forces you to
Speaker:get clear on what you're offering.
Speaker:Yeah.
Speaker:It forces you to create standard offers, it means that you have to be clear about
Speaker:what you're going to be offering and what the main group of people that you
Speaker:are going to be working with, so your target customer group, really want.
Speaker:And having that clarity is a beautiful thing in a business.
Speaker:When you have that clarity, not only do you know what to offer them and how
Speaker:to offer it, how to deliver it, you would know how to price it as well.
Speaker:So that clarity, it really forces you to sit down and get really clear about that.
Speaker:It also forces you to test out some things as well, but that's kind of a side note.
Speaker:So the second thing that it does is it helps you to streamline how you have
Speaker:those first conversations with customers.
Speaker:So right now, if you're doing time based pricing only, then that
Speaker:conversation is usually focused around, well, how much time is it going
Speaker:to take for us to get things done?
Speaker:And what is that going to cost me?
Speaker:So again, you're focused on these two things that are really commoditizing
Speaker:your offer, which is time and costs.
Speaker:And what you want to shift towards is you want to shift
Speaker:towards value and investment.
Speaker:Yeah.
Speaker:So, okay, I got off topic here.
Speaker:Let me go back.
Speaker:So streamlining.
Speaker:What happens with a lot of people is when they don't have customized
Speaker:offers or when they don't have some standard offers, they spend a lot
Speaker:of time creating customized offers.
Speaker:So I've had some clients who have said, you know, it took them two,
Speaker:three, five, even 10 hours to prepare that first offer for that customer.
Speaker:And that can be like 10 hours over a week or two, right?
Speaker:So it could be that the customer doesn't actually get that first
Speaker:offer until, you know, seven, 10 days or more down the road.
Speaker:What you actually want to be able to do is get them an offer in their hands
Speaker:as quickly as possible so that you can start the conversation from there.
Speaker:And when you have some standard offers and you don't need a lot of them, we'll
Speaker:come to that in a moment, you don't need a lot of them, but when you have two or
Speaker:three standard offers, then you can sit down and you say, okay, This is typically
Speaker:what clients, you know, what, how I work with clients, let's talk about which of
Speaker:these might suit you best and that they say, Oh, well, I really like this middle
Speaker:one, but then, you know, to talk about that more and find out more about what
Speaker:interests them in that offer, right?
Speaker:Or if they say, well, actually we like, you know, offer number three, but we
Speaker:want With this and that, then you can say, Oh, well, that's really great.
Speaker:Now that would be a customized offer.
Speaker:Shall we talk more about that?
Speaker:(package offers) helps you to steer the conversation, but it also helps
Speaker:them to start understanding the value and the investment they're going to
Speaker:be needing to make based on what they choose as an offer, whether it be one
Speaker:of the standard ones or whether they decide to go with something customized.
Speaker:It actually helps you to navigate those conversations much better.
Speaker:The last reason I'd like to focus on for creating packages is it makes it easier
Speaker:for your clients and your customers.
Speaker:Yeah.
Speaker:So we all know that we are overloaded every day with making so many decisions.
Speaker:And a lot of times when I talk to my clients and we talk about, okay, how
Speaker:they're having these conversations with customers, they kind of go to the
Speaker:customer and say, well, what do you want?
Speaker:And that leads to like confusion because a lot of times customers
Speaker:don't necessarily know what they want.
Speaker:They know what they don't want.
Speaker:They may have an idea of the few things that they want, but they're
Speaker:looking for you to help as the expert, to help give them more guidance
Speaker:about what they need and what's going to help solve their problem.
Speaker:So, It makes it easier for them to make a decision.
Speaker:I always tell people it's like a child.
Speaker:If you go to a child and you say, what do you want for lunch?
Speaker:They could ask for just about anything that they can name, right?
Speaker:And you may not have that in the fridge or you might be too tired to prepare it.
Speaker:But if you say to them, would you like?
Speaker:a sandwich or would you like a soup, right?
Speaker:Then you narrow down and you make the decision process simpler for them.
Speaker:When you have standard packages, as long as you don't have 27 of them, but
Speaker:you show them all at one time, then by giving them or showing them these
Speaker:options, you actually help, but make it easier for them to make decisions.
Speaker:So that is what I wanted to share with you today.
Speaker:I want you to start thinking about, in your business, is the time right
Speaker:to start making this shift from time based prices to packages?
Speaker:Now you understand time based pricing, it makes you, it's not tied to the value.
Speaker:It puts you in the position of being more of a commodity and it doesn't
Speaker:grow with you as you become more effective and efficient in how you work.
Speaker:And packages have the advantage of forcing you to be more clear on your
Speaker:customers and what they want and what you're going to bring them.
Speaker:It helps you to streamline how you're going to have those
Speaker:conversations, and it makes it easier for them to make the decision.
Speaker:I hope you enjoyed this episode.
Speaker:Let me remind you before we close this out that the next cohort of the
Speaker:fair price formula My price setting course is starting on September 29th,
Speaker:and I would love for you to join me.
Speaker:So head on over to thepricinglady.com/setmyprices.
Speaker:Have a look and get registered today.
Speaker:I wish you all the best.
Speaker:Have a wonderful day.
Speaker:And until next time, my friend enjoy pricing.