#63 Experience-Driven Pricing
Wherever you're at in your entrepreneur journey, I want you to know that peaks and valleys are normal, and if you feel crappy right now, you're not alone. Instead of painting a beautiful picture of my highlights from the week, I want to share the not so pretty side...
I've been experiencing a really bizarre feeling the last few weeks. It's like I'm SO excited about what I'm building, and at the same time feeling unmotivated and sad (I can't think of a better word).
For the past few weeks I've been [what feels like] barely online. I log on to focus on moving client tasks forward, send proposals and delegate ... but I haven't been feeling creative or inspired.
I have tried ALL my remedies: unplug, clear the calendar, get outside, long walks, hang out with best friends, text my Mom, breathwork, reading, stillness, Grey's Anatomy (lol), eat good food, vacation, etc.
You might have noticed I didn't send my newsletter last week and I apologize if you look forward to it, I don't take that lightly. That was the first time I have ever done that and it felt like crap. But I just didn't have it in me mentally.
I told a friend yesterday at Creative Mornings that I think I'm approaching burnout – I said, "I'm not feeling inspired or motivated" and he said "well yea, you've been going hard for a long-time and your business is a lot of ... well YOU ... so you need breaks!"
Creative Mornings did fill my cup yesterday and I'm hopeful that I'm on the mend ... I've got a great issue for you here and I have some fun planned for the weekend.
If you're in a similar place, or you've made it through, I'd love to hear from you! What are you trying?
One of the ways to avoid burnout in your business is to price your services and offers appropriately.
And pricing is one of the things I am asked about most often!
There are plenty of people on the internet talking about pricing psychology.
They will tell you things like ... less than $150 is an emotional buy ... we associate anything between $500 - $1000 as a $1000 level purchase ... more people will buy if you make numbers *look* smaller
$49, $497, $997, $1997, 3k, 10k ... whatever.
I'm not saying these things aren't true (I follow most of them *hehe*) ... but the number at checkout doesn't matter as much as you think it does.
There isn't a magic formula, and you don't have to do what everyone else is doing. For example, I have plenty of woo-woo clients (said with love) selling programs for $484 and $1111. DO YOU!
But there is one core thing you have to get right...
Price for the experience that you're creating
You can't just pick a random price out of thin air either. You need to consider what kind of experience you're creating, and what is involved with that.
If you price a baller, VIP, high-touch experience low you're setting yourself up for burnout ... and you know what that turns into? A bad customer experience. You're doing a disservice when you can't give it your all. You won't be able to include surprise and delight moments because you priced it too low to afford help, client gifts, and a nice dinner, etc.
Pricing runs on a spectrum from low-touch, lower-quality experience to high-touch, higher-quality experience.
The easiest example to think of is a dive bar versus a rooftop bar that brings your drink out in a cage of smoke or something (ngl – I love that sh*t). There is a time for both and you may offer both in your customer journey. And both MUST be valuable. This isn't about "how valuable is the experience" – this is about "what experience are you curating"?
When you go to price your program or product, think about the experience you're creating. Use this chart to help –
Let's talk about results...
When people make a purchase decision, especially a high-cost one, they're thinking about the return on investment.
But not always – sometimes experiences are purely for living life to the fullest. There might not always be a tangible ROI but at the end of the day you have to think about the outcomes... even if they're intangible like the "connections you'll make".
For example, last year I was a speaker at CEX, a conference for content creators. By attending that conference I met creators that I ended up becoming friends with and we self-organized a mastermind that I still meet with every two weeks. Friendships are priceless.
Next week I'm headed to CEX again and can't wait to see what unexpected ROI I get this time.
What about competitors?
This matters a lot more in different worlds than ours ... like SaaS companies. But it's always good to have a pulse on competitors and what their price is.
How rare is what you are offering? Let's take a social media course for example ... not rare. There are a couple of strategies here...
Lean into personal brand – humans want to buy from other humans they resonate with
Hyper specificity – like Jera Bean who offers a short-form video editing course for social
Consider your competitors price AND experience as a total package in comparison to what you're creating.
Now I'll talk nerdy-tactics with you...
You know I can't leave you without super actionable takeaways. Here are some tactics you can apply when pricing your products –
Consider Your Costs
You need your price to work for both your customers AND your business. Look at the chart above – do you need a team? Make sure you're factoring their costs in.
MAKE A SPREADSHEET, FAM!
Jumping back to the top here... pricing can't just be chosen out of thin air or copied off of what others do – especially if it's hundreds of dollars or more.
You should be considering how many hours go into it from start, to "finish", to maintenance mode. What customer service will be required? Will there be ongoing maintenance? What software do you need? (consider the recurring fee) Will you send gifts?
Factor the costs in and then add margin – this is your buffer for when you get it wrong ... because you will (it's normal).
Anchor Your Price
Always offer two price options. Ok yes, this is psychology, but this one is really a thing ok?? When there are two prices it gives our brains something to compare to without leaving to compare to other things.
It can also make your "lower cost" tier look like a great deal in comparison to whatever it is next to.
Examples:
Two different plans like a two-tiered membership
Two service packages
Course versus course + community
Pay-in-full versus payment plan
Order Bumps
In e-commerce this is called "cart value" – you can increase your cart value, and therefore your revenue, by making additional offers in the cart experience.
For example, you go to purchase my $149 membership class and workbook. At checkout I offer a 1:1 workshop for $349 that usually costs $499 giving you a one-time-only deal. See what I did there?
I use the tool ThriveCart for this (the UI ain't sexy but it works great), and some of my friends use Lemon Squeezy (haha, get it?). There are lots of options but these two seem to be the latest trend.
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