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:In this episode of Live With The pricing Lady, we take a look at
Speaker:building a pricing strategy that creates long-term client relationships.
Speaker:This should be the goal of any good pricing strategy, so sit back,
Speaker:relax, and learn how you can go
Speaker:about doing it.
Speaker:It's Janene here, The pricing Lady.
Speaker:I'm excited to have you joining me this week.
Speaker:We are talking about pricing strategies that build long-term client relationships.
Speaker:One of the things that many people forget when it comes to pricing is that
Speaker:it's much more than just the number.
Speaker:A pricing strategy is there to help you achieve your business objectives.
Speaker:It's there to support you in achieving those objectives and
Speaker:it can work for or against you.
Speaker:For many service-based businesses, one of the main objectives you
Speaker:have is building and keeping long-term client relationships.
Speaker:This should in fact be the main objective in almost any service-based business.
Speaker:Therefore, you need to have a pricing strategy that's set
Speaker:up to help you achieve that.
Speaker:Now, your pricing strategy alone will not give you long-term client
Speaker:relationships, but it can be working against you in terms of achieving that.
Speaker:If it is not intentionally set up in a way that builds long-term
Speaker:relationships, then of course you're going to struggle to do so.
Speaker:Before we get into this topic, I would like to remind you of one thing.
Speaker:The next cohort of my program called the Fair Price Formula
Speaker:is starting on March 21st, and I would love to have you join us.
Speaker:This program is all about helping you set your prices in your business.
Speaker:I walk you through step by step how to find the prices that fit
Speaker:your business best and how to feel confident about what you charge.
Speaker:If you wanna know more about this, then head on over to The pricing Lady dot
Speaker:com slash set my prices and get all the details and get yourself registered there.
Speaker:Of course, if you wanna have a chat with me to see if it's appropriate for you, you
Speaker:can book a call with me at any time at The pricing Lady dot com slash book a call.
Speaker:To our topic for this week, the pricing strategy that builds
Speaker:long-term client relationships.
Speaker:So why pricing isn't just about numbers, it's actually about trust,
Speaker:about sustainability, and about relationships, especially when we're
Speaker:talking about service-based businesses.
Speaker:Now, in other types of businesses, these things may not be as important in your
Speaker:pricing strategy, although I would beg to differ in most cases they will be, but
Speaker:you have to take a step outside of just the numbers part of pricing and think
Speaker:about how pricing influences things like trust, sustainability, and relationships.
Speaker:As you probably already know, my listeners primarily are people like you, female-led
Speaker:service-based business owners who are looking for pricing strategies that
Speaker:are easy for them, that they can feel confident about, but that also foster a
Speaker:long-term relationship with their clients.
Speaker:One of the most important aspects of creating a strategy that builds
Speaker:these longer term client relationships is starting to shift your mindset.
Speaker:Now, there's a few areas that you are going to wanna be doing this,
Speaker:and the first one is, shifting the fears that you have around pricing.
Speaker:That could be the fear of charging too much the imposter syndrome you feel, the
Speaker:anxiety you feel about pricing, those sorts of common fears that you and some
Speaker:of maybe your colleagues feel when it comes to pricing in their business.
Speaker:You want to start taking steps to help you shift those.
Speaker:This is one of the reasons why I talk a lot about doing
Speaker:customer insight interviews.
Speaker:Why?
Speaker:Because they help you to understand the customer better, so you can bring better
Speaker:offers and you know what people value about them, and you know what they're
Speaker:willing to pay for them, and then you can charge the right thing for them.
Speaker:Sometimes that mindset sh mind shift mindset shift, I have to
Speaker:be careful about how I say that.
Speaker:It comes from knowledge.
Speaker:So having more knowledge about your clients or more knowledge
Speaker:about how to set prices.
Speaker:And sometimes that shift is going to simply come from removing some of the
Speaker:roadblocks that you have around things like money and success and worthiness.
Speaker:So first part of this mindset shift is working on those fears
Speaker:that you have around pricing.
Speaker:And of course you have to be able to identify them first.
Speaker:The second thing that's gonna help you with your mindset
Speaker:shift is valuing your expertise.
Speaker:Valuing what you bring to the table for your clients.
Speaker:And going beyond just the time that you spend, but understanding as well
Speaker:that the experience that you have, the way in which you work with people
Speaker:the speed with which you may get them results in different businesses will
Speaker:be different things, but you have to value those things first in order for
Speaker:your clients to be able to value them.
Speaker:If you don't think that what you do is so important, chances
Speaker:are neither will you clients.
Speaker:Sometimes this comes from taking a step back and looking at your
Speaker:experience and where that all came from and the time and the energy
Speaker:and effort it took to get there.
Speaker:And then how you've perfected it and created your own, or how much
Speaker:money and energy and resources you invest in keeping and building and
Speaker:maintaining that along the way.
Speaker:Valuing your expertise and valuing the time that you give people in
Speaker:the right way based on that value is going to be very important when
Speaker:it comes to shifting your mindset.
Speaker:Because right now, if you feel that what you do is not very important, then you're
Speaker:going to have a hard time feeling that you can charge a good rate for that.
Speaker:The more that you value what you do, the more you'll be open to raising your rates
Speaker:or trying new things, trying higher rates or bigger offers, and that's going to help
Speaker:you have a more robust pricing strategy.
Speaker:The third and last thing I wanna talk about when it comes to this
Speaker:mindset shift around pricing.
Speaker:That is so hard to say, is focusing on reframing pricing as an invitation for
Speaker:clients to invest in their transformation.
Speaker:A lot of times people don't wanna bring up price 'cause it feels icky, but
Speaker:that's because they're thinking of it in the terms of, or in the context of
Speaker:a cost for the client, where instead you wanna reframe it as an investment.
Speaker:They're making an investment in, let's say if it's a coach in their transformation.
Speaker:If you're a marketing consultant in, you know, getting more clients, whatever
Speaker:it is that you help your clients do, what they're paying you, you don't
Speaker:wanna present it as a cost for them.
Speaker:You wanna present it and think of it in your own mind as an
Speaker:investment and where they're trying to get to, not just a transaction.
Speaker:Those are three areas that are going to help you be able to start to shift
Speaker:your mindset around pricing so that you can align it with what's needed in
Speaker:order to create a strategy that helps you build those long-term relationships.
Speaker:Because let's face it, a big part of how your clients see your pricing is
Speaker:a reflection of how you see it, and that's why it's so important to not.
Speaker:Or important for you to understand that those mindset shifts are
Speaker:going to be worthwhile for you to spend time working on.
Speaker:Now let's shift for a minute.
Speaker:Let's look at the key elements of a relation base based pricing strategy.
Speaker:So the first element, key element is transparency and trust.
Speaker:Your pricing strategy should be clear, fair and build long-term loyalty.
Speaker:Recently I moved and I put some of my things in storage, and when I first looked
Speaker:at the pricing strategy of this particular company, you got a discount if you were
Speaker:renting for a minimum of three months, six months, or a year, I think it was.
Speaker:And then when I went to check out, I saw the fine print and I saw that after a,
Speaker:so if you booked it for one year, yeah, you got a special price, but you only got
Speaker:that special price for the first year.
Speaker:And after the first year, not only did your price go up,
Speaker:the amount of the discount.
Speaker:But another four or 5% more than that starting in the 13th month.
Speaker:And I thought, well, wow, that's not how you build a pricing strategy that
Speaker:builds long-term client relationships.
Speaker:Basically if you stay with them for longer than a year, then you end up
Speaker:paying 20 to 25% more automatically, which to me didn't feel very fair as
Speaker:the client, as the customer, right?
Speaker:But it also wasn't very clear because you didn't find that out until the very
Speaker:last moment before you clicked purchase.
Speaker:Transparency and trust have to be a part of the pricing strategy that
Speaker:build long-term client relationships.
Speaker:Does that mean you have to tell them everything and share everything?
Speaker:No.
Speaker:There is a certain amount of transparency that's going to make sense for the
Speaker:customer and for your business, but it doesn't mean that you have to show
Speaker:every detail, and there are good reasons that you would not want to do that.
Speaker:So for example, you don't have to line itemize.
Speaker:Everything.
Speaker:Sometimes doing that opens the door.
Speaker:The customer thinks it's a door opening for them to say, well,
Speaker:actually, we don't need that.
Speaker:When you as the expert, you know that you always need to do that.
Speaker:It may be that it's just.
Speaker:A check and you confirm that X, Y, Z is in place and you
Speaker:can move on for some clients.
Speaker:But for most clients that when you do that check, there's going
Speaker:to be things to correct in there.
Speaker:So you don't want to give people the option to opt out of it, so therefore
Speaker:you wouldn't want to itemize that item.
Speaker:That's just one example.
Speaker:So transparency and trust are key to a pricing strategy that builds
Speaker:long-term client relationships.
Speaker:Second element value-based pricing.
Speaker:So charging for the impact and the transformation, not just your
Speaker:time, is another key element of relationship-based pricing strategies.
Speaker:Why is time-based pricing not ideal when you're trying to build
Speaker:long-term client relationships?
Speaker:Well, it focuses both you and the client on time.
Speaker:And time is not the value that you're bringing to the
Speaker:table, it's your expertise.
Speaker:It's your know-how, it's your skill, it's the way you work with your clients.
Speaker:It could be your flexibility if you're super, super flexible.
Speaker:Well, you can price, price based on time, but the more flexible
Speaker:you are isn't necessarily going to make your rates higher.
Speaker:Right.
Speaker:And.
Speaker:So you're not pricing actually based on the value, you're pricing on this
Speaker:arbitrary unit of measure, if you will, pricing unit of measure called time.
Speaker:Whereas if you say had one rate for really a lot of flexibility and another
Speaker:rate for clients who don't need that flexibility, then you could actually,
Speaker:you know, build, you know, build two client bases, one who's willing to
Speaker:actually pay more for that flexibility.
Speaker:So value-based pricing is gonna help you build those longer term client
Speaker:relationships with the right people.
Speaker:I. Third element, tiered and flexible offerings.
Speaker:Creating different levels of services for different client needs.
Speaker:Again, it's similar in how it functions to, you know, help you have
Speaker:a relationship based pricing strategy, similar to the value-based thing,
Speaker:because really what you're doing with tiered and flexible offerings is you're.
Speaker:Customizing towards the value that suits them, right?
Speaker:If you have three tiers in your offerings, and one is for the people
Speaker:who want the least flexibility, the lowest priced one, and the the highest
Speaker:priced one is for people who want the ultimate level of flexibility.
Speaker:Again, you're creating.
Speaker:Different levels of service for different clients' needs, and that's going to
Speaker:help you serve each client group better.
Speaker:So maybe the ones who need more flexibility, of course, they'll
Speaker:be willing to pay for that.
Speaker:For those who don't, you still have a price point that fits their needs.
Speaker:And it means also in terms of your internal ways of working, that you
Speaker:don't have to prioritize them in the same way as someone who has
Speaker:your highest flexibility offer.
Speaker:So again, tiered and flexible offerings can help you accommodate
Speaker:very specific types of customers, and that will also help you to build those
Speaker:relationship based pricing strategies.
Speaker:The fourth element of relationship based pricing strategies are focused on loyalty
Speaker:and retention offerings or strategies.
Speaker:So offering special pricing for repeat referral or VIP type clients.
Speaker:Now, one of the things I wanna add here as a word of caution
Speaker:it's a little bit, let's say.
Speaker:Not on topic with what we're we're discussing here today, but something
Speaker:I've seen a lot recently is when people offer special pricing for repeat
Speaker:clients, for example, they tend to be.
Speaker:Way overly generous, that's really improper English.
Speaker:They are extremely generous to their own detriment.
Speaker:Oftentimes I will see 20 and 30% discounts just because someone is a repeat client.
Speaker:I would caution you to say that that's probably not always
Speaker:necessary to discount so heavily.
Speaker:However, if you have repeat clients in your type of business, then
Speaker:you may be able to offer loyalty and retention discounts that make
Speaker:sense for you and for the client.
Speaker:Or referral incentives to help them help you find clients later on or
Speaker:new clients to, to feed your funnel.
Speaker:And again, this is about building that relationship.
Speaker:For the long term and these sorts of incentives that you offer should
Speaker:help you to build that sometimes.
Speaker:People will build these in to be nice as opposed to being part
Speaker:of a strategy to build client relationships for the longer term.
Speaker:So you have to take a look at what you are doing and ensure that
Speaker:they are actually leading towards long-term client relationships.
Speaker:The last key element of relationship-based pricing strategies
Speaker:are payment plans and accessibility.
Speaker:Making your services accessible to many different types of people,
Speaker:but without undervaluing yourself.
Speaker:This is really about.
Speaker:Boundaries here.
Speaker:So a lot of times you, you know, people will think that they have to offer
Speaker:like a payment plan for everything.
Speaker:I think it's actually a good strategy to say, okay, anything
Speaker:under a certain amount is not going to be a payment plan, a standard.
Speaker:Then if you decide that it's right to offer that to a specific kind of client
Speaker:because you find out there's a situation that needs that, you can choose to do
Speaker:that, but you don't always have to.
Speaker:Payment plans can be very helpful in certain situations but you have
Speaker:to make sure that in the process of offering them, you're not undervaluing
Speaker:yourself and your services.
Speaker:So those are the five key elements of relationship-based pricing strategies.
Speaker:So transparency and trust, value-based pricing, tiered in flexible offerings,
Speaker:loyalty and retention, dis or strategies and payment plans and accessibility.
Speaker:So now let's take a look at some of the common pricing mistakes
Speaker:that hurt client relationships.
Speaker:So the first is underpricing and attracting the wrong clients.
Speaker:This is a big one.
Speaker:Most people underprice themselves at the beginning, and I confess I did in some
Speaker:areas myself as well, and every once in a while I make the same mistake again.
Speaker:It's easy to do and it's easy to put yourself in that situation where you feel
Speaker:like, okay, I can't do this higher price.
Speaker:The challenge is that when you do that, then you attract the wrong clients.
Speaker:You end up having to build the market again with the right clients.
Speaker:It's a really costly mistake, not just in terms of finances, but also in time.
Speaker:It can take you a year or more to rebuild a market if you've gone in the wrong
Speaker:direction, and especially if you've.
Speaker:Underpriced yourself.
Speaker:Then you've attracted and built a market of people who are willing to pay that
Speaker:price, and they're probably not gonna be willing to pay the higher price.
Speaker:So you're gonna have to find new people.
Speaker:Right?
Speaker:Second, over complicated pricing and causing confusion.
Speaker:I remember it was LA late last year.
Speaker:Someone sent me a a. An example of their pricing page and asked me
Speaker:to give them feedback on it, and I felt like I was scrolling for
Speaker:easily 90 to 120 seconds trying to find the bottom of the pricing page.
Speaker:It was so long, there was so much information and so much detail
Speaker:on this pricing page, and it was really complicated for the client.
Speaker:For my client to manage.
Speaker:But as a customer, when you look at such a page, you think, oh, I'll come
Speaker:back to this later and look at it again.
Speaker:I don't have the time right now, so they immediately will go away.
Speaker:You want your pricing to be very simple, whether you present it
Speaker:verbally or on a website or in a formal written offer of some sort.
Speaker:You don't have to communicate everything to everyone.
Speaker:In fact, often it's better just to say, well, okay, these are a couple
Speaker:of things I think would you know.
Speaker:Suit your challenge or be the best way to go about solving the
Speaker:problem you've told me about.
Speaker:Why don't I send you an offer for those two things, rather than giving
Speaker:them like the smorgasborg menu offer, which just puts people into decision
Speaker:overload and it causes confusion that can really hurt client relationships.
Speaker:Next, not setting clear boundaries around scope and expectation.
Speaker:This is a biggie in services if you're unclear.
Speaker:This is so they worry, oh, well what if it takes more time?
Speaker:Well, you know, projects sometimes do take more time and other projects take less
Speaker:time When you moved into package based pricing, which actually in many cases help
Speaker:build client better client relationships.
Speaker:But when you move there, you kinda have to let go of time as a, as a
Speaker:determination of price, and instead use time as a determination of your
Speaker:efficiency and of your effectiveness in scoping the projects right.
Speaker:So not setting clear boundaries with your client, with yourself first
Speaker:and with your client second, can really hurt clients' relationships.
Speaker:So sometimes even something as simple as this offer does
Speaker:not include market research.
Speaker:Yeah.
Speaker:If someone wants market research included in the offer that you're
Speaker:doing and they want you to do it, they need to pay extra for that.
Speaker:Right.
Speaker:So it depends on the type of business you have.
Speaker:I'm thinking of a, of a, a client who does social media and marketing.
Speaker:And the client wanted them to write the social media post, which was fine.
Speaker:So she said send me all the information you have about your
Speaker:target customer and who they are and what they value, so on and so forth.
Speaker:And she had written into the contract that market research was excluded,
Speaker:which in this turned out what in this context turned out to be right.
Speaker:The client signed the contract, read and sign the contract and everything,
Speaker:but then they said, oh, we thought you were gonna do the research.
Speaker:She said, no, it's clearly written here that it wasn't.
Speaker:She was clear about that boundary up front.
Speaker:She'd never had anybody.
Speaker:Expect that before.
Speaker:But this particular time, that was something the client.
Speaker:Thought she was going to do and then learn unfortunately afterwards that they
Speaker:needed to supply that information for her in order to, for her to do the work
Speaker:that they had actually hired her to do.
Speaker:Those clear boundaries and scope, if you don't write them down in advance or if
Speaker:you don't make them clear upfront, then when they come up later on, they can
Speaker:become a real sticking point with a client and hurt or damage the relationship.
Speaker:They may then later think about going somewhere else.
Speaker:It's important to be clear with these boundaries around scope and expectations,
Speaker:even ways of working sometimes upfront.
Speaker:Another example here has to do like if you do if you do services, for
Speaker:example, for a, a corporate client of some sort and you know, they pay you
Speaker:based on a daily rate, but expect you to be available sort of whenever they
Speaker:need it for an hour here or there.
Speaker:Or they're constantly, let's say you have a meeting you know, each Tuesday
Speaker:of the week each Tuesday of the month, sorry, there's only one Tuesday each
Speaker:week, each Tuesday of the month.
Speaker:But they constantly cancel like 30 minutes before the meeting, that's
Speaker:not respecting your time and the expectations around ways to working
Speaker:are probably being infringed upon.
Speaker:But if you never had that conversation with them upfront, then it's hard to go
Speaker:back to them later on without it affecting the relationship with that client.
Speaker:It's possible, yeah, to have the conversation still, but is
Speaker:going to feel very difficult.
Speaker:The last of the common pricing mistakes that hurt client relationships
Speaker:are constant discounts versus strategic value-based promotions.
Speaker:So what is the difference between a discount and a
Speaker:strategic value-based promotion?
Speaker:Well, a discount is, you know, often something you just do because you
Speaker:feel backed into a corner or you feel uncertain about what you're doing.
Speaker:There's no real business purpose behind it.
Speaker:It's kind of a move, desperation, if you will.
Speaker:Where a strategic value-based promotion is when you're granting... I always think of
Speaker:it as a price and value as a scale, right?
Speaker:If you think of them on a scale and you always want the price
Speaker:and the value to be balanced.
Speaker:When you're granting you know, constant discounts with no business purpose, then
Speaker:the, the price, you're adjusting the price side of the scale, but the value
Speaker:side of the scale is not adjusted at all.
Speaker:So price, you know, just gets lower and lower and the value stays.
Speaker:The same basically with strategic value-based promotions or even value-based
Speaker:discounts, you are adjusting both the value and the price side of the scale.
Speaker:So there's a, there's a good business purpose behind it, like an early
Speaker:bird discount for a program, right?
Speaker:If you book.
Speaker:In advance then I will grant you this discount.
Speaker:Right?
Speaker:So that's a value based promotion.
Speaker:There are lots of examples out there of what those are.
Speaker:A lot of times people offer discounts, one because they feel
Speaker:a moment of weakness, they feel a lack of confidence and uncertain.
Speaker:Other times people will grant them because that's what everybody else
Speaker:is doing and those are not good valid reasons to be granting discounts.
Speaker:Or even promotions for that one.
Speaker:You want there to be good business thought behind them, and you want to make sure
Speaker:that price value scale is kept in balance, that if you're adjusting the price, that
Speaker:the value is adjusted somehow as well.
Speaker:Let's start wrapping this up.
Speaker:What can you do?
Speaker:So the key takeaways from this are that, first of all, you need to be
Speaker:working on shifting your mindset.
Speaker:Working on those fears, reframing pricing as an invitation for clients to
Speaker:invest in themselves or their business.
Speaker:Or in the transformation that they're looking for.
Speaker:That mindset shift is so important.
Speaker:And it's absolutely key that you are clear on the value that you
Speaker:bring, not the benefits, but the real economic value that you bring.
Speaker:Now, we looked at the key elements of a relationship based pricing strategy.
Speaker:We talked about transparency and trust, about value-based pricing,
Speaker:about tiered and flexible offerings.
Speaker:Loyalty and retention strategies as well as payment plans and accessibility.
Speaker:So take a look at your current pricing strategy.
Speaker:Does it include some of these elements?
Speaker:Are those elements actually working for you or not?
Speaker:Because you can, you can have a lot of transparency, but it can
Speaker:also work against you, right?
Speaker:Or you can have really flexible offerings, but.
Speaker:Oftentimes, the more flexible you are, the more complexity we add.
Speaker:And so you may need to adjust that flexibility so that the
Speaker:complexity, complexity is reduced.
Speaker:Take a look at your current pricing strategy and these five elements of
Speaker:a relationship based pricing strategy and, and ask yourself, okay, is
Speaker:what I'm doing, are these elements there and are they working for me?
Speaker:And the last is to reflect on the common pricing mistakes We talked about four,
Speaker:pricing mistakes that can hurt client relationships, underpricing and attracting
Speaker:the wrong client, overcomplicating pricing and causing confusion, not
Speaker:setting clear boundaries and expectations around the scope and constant discounting
Speaker:versus being strategic and value based in your promotions and discounts.
Speaker:Ask yourself, you know, are, am I violating or am I making
Speaker:any of these pricing mistakes?
Speaker:And how do I think that they are impacting my ability to build
Speaker:long-term client relationships?
Speaker:With that, I'd like to close this session of Live With The pricing Lady.
Speaker:I thank you so much for Enjo for joining me here today.
Speaker:As I mentioned at the beginning of the episode, the next cohort of the Fair
Speaker:Price Formula is coming up on March 21st.
Speaker:I encourage you to head on over to The pricing Lady dot com slash set my
Speaker:prices and learn more about how you can join me so that we can help you get
Speaker:your pricing strategy set up so you can move on and do better, more fun things
Speaker:with more confidence in your business.
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.