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The Business Lounge Podcast with Kim & Chris
Welcome to The Business Lounge Podcast! Each week we'll share proven marketing strategies to help you build an audience of buyers, create impactful content, and grow a profitable business without compromising on your values with your host, Kimberly Ann Jimenez!
Kim is an Online Marketing Strategist, Educator, Founder and Thought Leader in the online marketing industry.
Having worked with 33K+ small business owners & entrepreneurs across an array of industries over the past decade, Kimberly and her business partner Chris Michael Harris are obsessed with helping you level up your marketing game, and grow your bottom line.
They co-lead their flagship program, The Business Lounge, which teaches business owners & entrepreneurs like you how to navigate the confusing & often overwhelming world of online marketing and build an unapologetically profitable business on your own terms (and without compromising your faith, your family or your freedom).
Join us at thebusinesslounge.co
The Business Lounge Podcast with Kim & Chris
S8 EP2: Smart Pricing Strategies— How to Charge What You’re Worth & Convert More Clients!
If you're undercharging, it’s costing you more than you think. In this episode, we break down the psychology of pricing and how tiny tweaks can boost your conversions by up to 15%. Learn how to confidently charge what you're worth with smart strategies like price anchoring, value-first positioning, and irresistible package design. Stay tuned!
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One small tweak can make all the difference when it comes to pricing.
Speaker 2:Yeah, pricing and positioning 100%.
Speaker 1:All the time gets stuck on. When it comes to pricing, the number one thing is you are greatly undercharging.
Speaker 2:In what world would you ever think that buying 53 digital download pictures for $130 is a good deal? But you get them because the psychology is so strong in how they position everything.
Speaker 1:Everything is marketing psychology, and if you know these, these principles, you can apply them to so many things.
Speaker 2:You need to at some point pay yourself an hourly rate, 100%, even if it's four bucks an hour like. Start paying yourself something. We don't know how to justify the price until we've actually justified the price to ourselves.
Speaker 1:True. What's up? Amelia It's's Kim and Chris and you're listening to the Business Lounge Podcast.
Speaker 2:In each episode, we'll break down all the latest in online marketing, give you all the deets on what's working now to turn your content into customers, boost your leads and sales and scale your business fast.
Speaker 1:All without compromising on what you care about most faith, family and freedom. And listen, it's all real, raw and unfiltered. So let's start the show. What is up, familia? Welcome back to the Business Knowledge Podcast. I am pumped. Today we have a cool topic and we might do a little bit of banter before right, but I want you guys to know that we don't do banter, we don't do banter at all.
Speaker 2:Strictly business.
Speaker 1:We're going to talk today about pricing strategies.
Speaker 1:We see this problem all the time in coaching, and so, if you didn't know, there's actually some really cool studies that have proven that you can actually increase your conversions by up to 15% just by changing the way that you present your prices, which is really crazy. But if you want to learn how to actually organize your pricing and present it in a way that is exciting to people, that makes them feel like, oh my gosh, I have to jump on this right now you're going to want to listen to this episode because it might not be the sexiest thing, but it's absolutely something that can totally break like make or break your entire uh service or course or and this works with like high ticket things, low ticket things across the board so I'm really excited.
Speaker 1:That's it.
Speaker 2:It's gonna be a good yeah, we've, uh, we've actually had some clients that we've worked with that uh, just by making this subtle tweak alone and learning some of the mechanisms like price anchoring. For example, we had a client I can't give specifics because it's kind of a HIPAA thing, but was working with people wanted to raise the price substantially because they were like higher end let's call them athletes per se and so was previously charging a certain rate, wanted to greatly increase that because it felt worthy of an increase in the price, and so he used a price anchoring. He actually learned it from a boot camp that he attended to learn that that one strategy alone took that there and got immediately what he was asking for, and it was a sizable increase yeah like a 7x increase in price for people who was already.
Speaker 2:So it's not just stuff you can use for new sales, it's also you can price justify an increase if you feel like you're not charging what you're worth. Which who's ever heard that? Who's ever? Who's ever sold something that they felt like it was under what they were worth?
Speaker 1:that's never happened, ever, especially in the history of business.
Speaker 2:Everybody feels very, very well compensated and treated fairly and the compensation yeah so so that, so that alone could, should be something like you can use this literally this some of the things we're gonna teach you today, just today.
Speaker 1:I love this because, like y'all, everything is marketing, psychology, everything I know for us even in negotiations with, like our everyday kind of situation, right, whether it's like Chris trying to figure out how to sell his parents, having someone come in and help them, you know, once in a while with things around the house, or, uh, you know us negotiating.
Speaker 2:They watch this show.
Speaker 1:I know, I know they do.
Speaker 2:Hi mom, hi dad.
Speaker 1:We sold we sold you exactly when we're trying to like negotiate renovations because we're doing renovation projects or whatever. Everything is marketing psychology and if you know these principles, you can apply them to so many things, like I can't wait for us to be parents because we're so going to use this on our kids guys, if if you're, even if you're happy about what you're getting paid in business.
Speaker 2:Stick around just for selling the kids on things you want them to do, Like marketing. I tell people this for the nerds in the room, not just me. I always say that adding the marketing infinity stone to my infinity gauntlet, like Thanos, was like the last. You're such a nerd Like I'm powered up, I'm ready. It's like I like had all the other skills, but it was like man having the marketing thing. You feel like you can sell anything to anyone and it feels dangerous.
Speaker 1:It's true. With great power comes great responsibility going down the further nerddom you got to.
Speaker 2:You got to sell with an integrity, yeah you have to and um guy, uh, never split the difference. Chris voss, he talks about that. He's like what I'm going to teach you is going to come with some responsibility, like you need to be responsible with what I'm going to teach you, because you can be dangerous.
Speaker 1:I like that.
Speaker 2:So it's 100 true, and you can use it in all areas of your life, not just in your business, and you can get what you want which is always important if you need to keep the doors open.
Speaker 1:I think this is like kind of leading into like the mistakes, the pitfalls, the things that we see people all the time get stuck on when it comes to pricing.
Speaker 2:And I think.
Speaker 1:For me, especially because we coach so many women, the number one thing is you are greatly undercharging, and for the most part, this is because we don't actually sit down to think about how much time and energy we're putting into our services, our courses, our membership, our offers, and so one of the first things we do when we onboard clients is we will send them an actual calculator, a revenue calculator.
Speaker 2:It breaks their brains.
Speaker 1:I want you to put all your offers into this thing right.
Speaker 1:It's going to spit out some calculations on your time into this thing. Right, it's going to spit out some calculations on your time, but essentially just pulling out a piece of paper. If you want to do this right now and start writing your offers, like if you have services and you have multiple packages, or if you have different courses, or if you have, um, let's say that you do coaching and consulting what are your offers? How much are you charging for them right now? And then how much time does it take for you to actually deliver on those offers?
Speaker 1:I think most people are blown away when they find out that they're spending 14, 15, 20, 30 hours rendering you know a service that for 150 bucks Right and so then you want to calculate, based on that price point, how many hours you know you are actually investing into that offer, and then make sure you divide the hours that you're working to deliver that offer by how much you're charging. So, for example, if you're spending 10 hours and you're charging a thousand dollars, that's one hundred dollars an hour.
Speaker 2:Yeah, we never so, as, as founders of companies or leaders of companies, whatever you want to call yourself, whatever vernacular works for you, we never measure our time no we don't, and we never put a dollar association with it. You know we're forced to do that and I actually tell people this you need to at some point pay yourself an hourly rate, 100%, even if it's $4 an hour Like.
Speaker 1:Start paying yourself something we see people that are five years in and they've, they have. I'm not joking you.
Speaker 2:They have five thousand dollars in payroll and they're not paying themselves. They have literally equipped their. They have five virtual assistants, yep, which I'm here for it like get the help you need, but, good riddance, like you got to be paying yourself something and so we don't treat ourselves like an employee of our own business. Right, and you would never, would never, hire somebody as a CEO of a company and be like oh, by the way, like you're doing this for free and there's never going to be a payoff.
Speaker 2:You're just going to work five times more than you did in the job that I hired you from. You're going to make nothing or next to nothing, and yet you're going to have to demand more and more. You're gonna work 90 hours a week. It's just totally unfair, and so a lot of our offers. We don't know how to justify the price until we've actually justified the price to ourselves.
Speaker 2:How are you going to justify the price of somebody else if you haven't done the math to figure out? Hey, this offer, at the rate I'm charging, I'm literally making minimum wage or less. You'd be shocked, seriously you'd be shocked how many people they're like. But I said I charged $500 for this program.
Speaker 1:I was like nope.
Speaker 2:Yeah, and you deliver for six months, yep.
Speaker 1:What are you doing, and so?
Speaker 2:divide not only the time to market it, put it together, deliver the service. Some of it's a one-time thing. You develop the product and then it's over like a course or whatever. So you have to factor that in it's R&D. Put it as R&D.
Speaker 1:You still got to host it. That kind of thing.
Speaker 2:The hustle work. You're doing the podcast you showed up on the webinar that you hosted. You've got to factor that stuff in for your justification of your pricing. Now, I'm not saying you pass it on to the consumer, but definitely with the deliverables. And so a lot of people are delivering a six-month or let's say, a five-week sprint accelerator-type program where it's a group coaching capacity and they're only charging 12. They're like I'm charged 1200 but when you break down the time commitment you're really making like 20 an hour.
Speaker 1:You were making less than you were in a job and now you work for a crazy person, aka you right, and if you can't tell, we both have made this mistake in our businesses, you know like from the moving company days I think that was like the first one we're like no, we're gonna put everything into the business and we're going to invest in the business, and it's like I just called feed the beast. Yeah, we just we, just never, we, just never got paid until the beast stomped me to the curb.
Speaker 1:Exactly, and so like we learn this the hard way, but we also see so many people like staying trapped in it and it sucks because it's like you're expert, you're someone who can deliver value, deliver results. You should be charging accordingly, and there's a way in which you can do that, because I think there's also an argument, chris, for some people come to us with the opposite problem and this is very rare, but sometimes it happens, especially with the dudes.
Speaker 1:they come out with these figures that they're going to charge when they've never worked with anyone they've never had a single client before and they're like like oh, I'm going to charge people $10,000. We're like hold up, wait a minute. You have no proof, you have no like framework, you haven't solidified your process, you haven't validated your market. And there's also something to be said about market. You know resistance to pricing.
Speaker 1:I think for us we've seen this a couple of times too, with clients where just shifting their market being like listen, you have a great service, but you're selling it to people who can't afford it and therefore, you're killing yourself to deliver on the expectation that they have, because, listen, I don't know if you guys have heard of this, and Chris and I have been definitely witnesses of this but the people who usually you charge the least to have the most crazy expectations.
Speaker 1:It's ridiculous, right, the lower your price the lower quality your client base is going to be. That doesn't mean, though, that you just jump up to $10,000 having no experience. You have to go through a path of validating what you do and being a true expert, and there's something to be said about that?
Speaker 2:Yeah, there's something that I'm working on. It's called the mastery growth curve.
Speaker 1:Oh, it's so good. It's a nerd thing you have to show them. I'll show it to you guys.
Speaker 2:I'll do a video on it because it's so important, because a lot of people, the reason they tell themselves they can't charge what they're worth or what the market's charging, is because of what Kim just said they what Kim just said? They've never done it before.
Speaker 1:Right.
Speaker 2:And so they completely mitigate themselves and their value.
Speaker 1:Or they've been doing it for like five years and they're like I still need to learn more.
Speaker 2:Yeah, because it's comparisonitis.
Speaker 2:You're in the same industry as someone else that's been doing it for a lot longer than you, and so you're like I have no business charging what they're charging.
Speaker 2:Now, a lot of the bros, the brosefs, they come in and they're like, oh well, this person's charging six grand a month, so I'm going to charge five, like they'll just go right in underneath their price and I'm like, bro, you've never done this before, like you'll be lucky to get two, so anyway, so there's definitely some things you can do. But that mastery growth curve it kind of tells you where you are and kind of how to niche yourself and position yourself for each level of that growth curve, and so that should help. When I release that video, if you're in like a more coaching, well, in any capacity actually, it'll be beneficial. But not a physical product I think that's kind of straightforward but more of like an expert, uh, there's gained knowledge to be acquired in your pursuits, uh, with what you do in mastery. Hence mastery growth curve, um, but yeah, so that should be helpful as well to kind of help you justify where you are in that evolutionary cycle.
Speaker 1:I think also like the third mistake. We see a lot, so we talked about. You know how a lot of people will either do one or the other.
Speaker 1:They're over charge, right right from the gate or they will undercharge perpetually. But then we also see people who I want to touch a little bit on the previous one I mentioned, which is you just have a mismatch between the market and your offer and you want to make sure that you are operating in the magic zone where what you bring to the table is something that people value enough so that you can charge and make a lot of money doing it. And I think sometimes we live in La La Land, especially as women. I'm sorry girls, but we have to call it out like we gotta be honest about you know our attack the bros attack the bow.
Speaker 1:It's not an attack. Use that word, I'm such a bro.
Speaker 2:It's not an attack, has to be so abrasive severe violence.
Speaker 1:Yeah, it's not an attack, it's a call up. It's a call up. It it's a call up, it's being like listen, this is a problem. Let's be better, because I think sometimes we just get so caught up, really, you know, in this cycle of trying to help people who can't afford our help.
Speaker 2:Yeah.
Speaker 1:And that's a huge mistake. That doesn't mean that you don't get to help people who can't afford your products or services, but you have to reframe your mindset because you don't have a business, you have a very expensive hobby and even maybe like a charity, and I think sometimes our heart, like our, our helper, and our heart is always to like serve and help people, and I think, I think you and I both have enneagram, I think it's threes uh, you're a one, two, I'm a three, two.
Speaker 2:I alwaysrees You're a one, two, I'm a three, two. I always get that confused. Yeah, she's a one, two, I'm a three, two. So we share the helper, so we can get out of control.
Speaker 1:We will absolutely get each other riled up about helping people, and the reality is first-.
Speaker 2:Save your syndrome.
Speaker 1:Exactly Not everyone who you want to help wants your help. Number one we want to help wants your help number one and number two not everyone who needs your help can afford your help, yeah, and so one of the things that I always try to coach our girls on is like listen, your content is still a ministry you can help people, and we do have we do have guys too.
Speaker 1:Your content can help people for free, and there's a lot like this is how I think about it. I've put out thousands of content pieces in the last 10 years Crazy good advice, super valuable stuff. People can get results just by watching our YouTube videos. They don't have to come you know and work with us right away, unless they're trying to like shortcut their their growth, and so a lot of people can afford it Like I want to help them through my content.
Speaker 1:I don't want them in our programs. Why those people complain the most. They have the most crazy expectations. They turn into nightmare clients really quickly. Why? Because to them even just a couple hundred dollars is like the world right.
Speaker 2:We were shocked by that.
Speaker 1:We want to work with people who can easily afford your service or product. So it's an easy yes. Their expectations are not ridiculous. They don't expect you to have a magic wand and fix all of their problems. Um, and they have the disposable cash to reinvest for the long term. Remember when people would yell at me for nine bucks for nine bucks, like they'll come back.
Speaker 2:No legit guys. They'll come back five years later after buying a nine dollar product and like ream us because their access expired. I paid $9 for that. They don't even say $9. I paid for this in 2019 and now I don't have access. This was a total scam. It's like you paid nine whole dollars, like you spent that at Starbucks this morning.
Speaker 1:I know there's people who leave us negative reviews on the show, on this podcast. Go look at them.
Speaker 2:They're in all caps. So that's like the screaming version of like. When you're online and screaming, you just be like bam. When you know, when you engage all caps, you're ready to drop some thunder. You know what I mean? Like here, I am thunder, yeah no, they're about to drop bombs all over it. That all caps button is like locked and loaded baby.
Speaker 1:So ridiculous, so stupid. It's freaking true. Sorry, go ahead.
Speaker 2:I was going to say this, and this is in conjunction with that. We always say know your person, and what we mean by that is know your ideal client avatar. The reason, guys, is when you're actually trying, when you know who you serve and you know the ways that you serve them and you're in alignment with those things, the conversation about money is so much freaking easier. It's unbelievable. Yeah, so that's not a cry to say like just serve, so for us, right, we don't necessarily work with newbies, no, we don't. The content part of it, the free content, that's for the noobs For sure. Like dip your toe, figure it out, stay in the kiddie pool, whatever you want to do, but the people that really pay us and hire us, they're earners.
Speaker 2:They're earners and learners, baby, they want it all and they want it applied for them specifically. Because now to them, time is more valuable than money, because they're actually to a point where that makes sense for them yes, but a point where that makes sense for them.
Speaker 2:Yes, but you have to know where you fit. So we have a client recently shout out to Nikki, one of our clients dietitian, and she said I think I have permission to share this. I don't know why I wouldn't, but she was saying she's like for the love. Yeah, the people that aren't all in, that's not their mindset. She's like I'll get on a call and, like I can't get them to follow any of it, it's like did you drink water? No, I didn't drink water. And it's like what?
Speaker 2:Like I can't even get you to drink water Like human survival, like literally your existence is reliant upon you consuming this liquid. But I don't like it. I you consuming this liquid, but I don't like it. I don't like how it tastes, you know so like there's no meaningful progress. The problem is is that if you're a rah-rah life coachee, you want to help people get motivated, you know whatever, then great, you can do it. Water's great, h2o right like, so that would be your game. And then what you would do is have a volume game, so you would serve newbies that have that need that motivational thing right and get a community of 1,000 people paying $17 a month and start a membership around the water drinkers. But the problem is for this client, nikki, she's a super nerd.
Speaker 1:She is one of the best, I would say she's probably the best dietitian I have ever met. She talks about stuff that I've never the best dietitian I have ever, ever met. She's incredible.
Speaker 2:She talks about stuff that I've never heard a dietitian even think. I don't even know if the dietitians and other dietitians I know know how to pronounce the things that she's talking about.
Speaker 1:There's dietitians, and then there's like Nikki, who's into all the science and research of biohacking. She's incredible.
Speaker 2:She's talking about genotypes and stuff that things that I nerd out about. Like I'll read like medical journals in my spare time, like a weirdo, but like I'll be like Nikki what do you think about this? And like she knows, like she knows all the things and she's basically grok for me, it's like hey Nikki, she's grok Ask ask Nikki. So you know that so for and so sometimes a lot of you. You're trying to serve too many people. Oh my gosh, you're trying to so it's called.
Speaker 2:it's called a total address, home market. So you're trying to address everybody Right and so everybody said my earliest, earliest exposures to entrepreneurship. They says the riches are in the niches.
Speaker 1:Right.
Speaker 2:And so, or if you've got niche, whatever, the riches are in the niches, whatever you want to say, but the riches are in the niches, the reachies, the reachies Still make it work, oh my God. So if, if that alone, guys, if you're in alignment. So I told Nikki, I'm like you're the pesky problem solver, you're, and I would use that.
Speaker 2:You're the person when the prodding and because we both have had health because we both had health things that we've had to deal with and we're serious about being our best and sometimes we feel underserved because there's people that don't understand how to solve a really, really deep problem that only like a really serious health nerd will solve. Now here's the kicker if nikki puts out content because she's like everybody health, a diet for everybody then I'm not going to resonate with her content, right I'm not going to be excited for her because it's way too watered down and basic for me and so.
Speaker 2:But if she positions herself as like when you can't solve the problem, I'm the nerd genius guru that helps you figure out what that is and like boom immediately I'll pay ten thousand dollars.
Speaker 1:That's what I was gonna ask you. How much money would you drop?
Speaker 2:I would pay her ten thousand dollars if I had when I had my pesky problem. Guys, it cost me over five years and it was. I had to be my own advocate and kim has had to do the same thing.
Speaker 2:Like that's opportunity for a business owner a whole for an executive, for an entrepreneur, that opportunity costs, like I said, time and money. And so now, instead of saying like, hey, please buy my $19 recipe book because you're trying to sell everybody, well, guess what? The person that you want to work with the me's of the world, that will drop the $10,000,. I'm not interested in your strawberry smoothie recipe. What I'm interested in is figuring out my X, y or Z problem that no one has been able to solve, that I'm willing to spend $10,000 for.
Speaker 1:Come nerd out with me and tell me all about genotypes and map out my whole genetic. I don't know.
Speaker 2:Predispositions right, yeah. So positioning, knowing where you fit in your market alone is going to solve like half the problems of pricing Right and that's something that you.
Speaker 1:So you talked about two things that were really important. So when you know your pricing and you know your person, that allows you to position your message correctly. So, we got to do the seven Ps of marketing in the next episode.
Speaker 2:Yeah, we'll do the seven Ps.
Speaker 1:But what we really want you to understand is that you got to know your person. If you don't know your person your pricing is going to have a mismatch. If you're not clear now, here's the thing. Do you remember? I will never forget. Um we came, so we had this with this client. Um, they were in our, in our membership the business lounge. And um we flew out to austin for a different event. We didn't live here yet and they were like absolutely.
Speaker 2:TBL Academy. Now, by the way, tbl Academy, the business lounge, is a company. Now, guys, Now it's a company. If you didn't know that, we did a whole sign about it.
Speaker 1:I'm pointing Uh-oh, the business lounge is a company, uh-oh.
Speaker 2:We have Academy, which is the membership.
Speaker 1:Oh he coaching and one-on-one coaching.
Speaker 2:I just want everybody to be known Soft pitch. No, that's just a little commercial break. Okay, back to the clients in Austin.
Speaker 1:Okay. So anyway, we met up with them. They were just really struggling. I remember they were like listen, we're sleeping in like friends' couches right now.
Speaker 2:That's how bad the situation was.
Speaker 1:They had a social media agency at the time and I was like, hey, so tell me what you're doing. Um, and so they were like, look, we're offering this service, this service, this service, this service. Um, I was like, okay, cool, that's a lot Like they were actually showing up live for events for their clients.
Speaker 1:They were filming all the content. It's like how much are you charging? And they're like three to $500 a month. I was like, wait, what A month. It's like listen, you have a major niche disconnect between your offer and what kind of person is willing to pay for that, and so I remember being like you have the wrong audience.
Speaker 1:You're targeting restaurant owners, small businesses that have just gotten like opened and you know they're getting started their startups. They don't have the actual disposable cash, the cash flow, to invest in an agency. You need to go to established businesses like you know surgeons or attorneys or car dealerships. I I just rattled off a bunch of different potential niches yeah and they were like okay, we got it.
Speaker 1:They made the change. Within four weeks they were making six figures in that business, just because, like they were charging ten thousand dollars yeah, they were super energetic super excited. They both got apartments. Like things turned around because they did one thing they both got.
Speaker 2:they got a place, they got a home, they got a home.
Speaker 1:Yes, they got a home, important, important. So it just goes to show you like one small tweak can make all the difference when it comes to pricing.
Speaker 2:Yeah, pricing and positioning 100%. And keep in mind, guys, so we know this. So if you're at a point now and you're like, oh my gosh, I've been undercharging for a long time, one, please note, it can change fast.
Speaker 1:It can.
Speaker 2:Two, and this is the name of the game, and I think this is something that I've just maybe as men, I think we do this more just, instinctively, but we leverage, it's true, we leverage.
Speaker 2:And so, whatever your situation is now, let's say you're like, oh my gosh, I've worked with like 100 people that have only paid me 200 bucks a off blah. Um, get, go get case studies right. Or rather, go get testimonials and then build case studies around those right, because what we want to do is we want to leverage every opportunity that we can.
Speaker 1:So you're talking about the other p, which is proof. Proof.
Speaker 2:I love that so yeah, so if you're gonna go pitch somebody new like the car dealership, and you're like, hey, kim and chris said position, person pricing, pricing 10 grand. And they're're like, well, who is you Right? And then you're like, well, I'm nobody Like, but I should, but I'm worth it. Kim and Chris said I'm worth it.
Speaker 1:Kim and Chris said Kim and Chris said. It's like no y'all, that's not how it works, and Nikki did this, so don't do that.
Speaker 2:Something that we do that's really smart is we want to find out. What are we selling at every level? Yeah Right. So what do I need? What can I leverage at where I'm at right now to build the thing? I need to go sell the thing that I want.
Speaker 1:Absolutely.
Speaker 2:And I did this on LinkedIn. I remember telling Kim like 15 years ago, maybe like 13 years ago, it doesn't matter.
Speaker 1:We've only known each other for 14 years.
Speaker 2:Yeah, well in my dreams before I met Kim, because she was in my dreams always, oh honey. So I remember I was just connecting with people on LinkedIn. She was like what are you doing? You don't even use LinkedIn. I was like I don't know, but one day it's going to pay off.
Speaker 2:I'm just constantly leveraging connections or relationships or exposures to things and then it turned into me getting an insane lineup on my podcast and it was all inroads through linkedin connections that I had made. I met damon johns, like now his right hand man.
Speaker 2:At the time he was like I don't know, he wasn't an intern but he but I connected with him and he was like in the shark branding type, you know and you stayed in touch for years and I stayed in touch with him and then later I had an ask and he's like oh, yeah, dude, like oh, because my show was trending when I first started, was trending on a new and noteworthy, and then I was like leverage, and so immediately I went nuts. I'm like I've got eight weeks because I heard like eight weeks is like the new and noteworthy time frame, right, and so I was like cool, like if I get this person, then I can leverage that to get this person and then I can leverage that to get this person. And sometimes it was like a multi leverage situation. So I like create roads to Tony Robbins and then who are the people that know Tony that I have direct access to, that could get me to Tony eventually.
Speaker 2:Sometimes it was years of building to these people, right, but the bottom line is this is that I leverage new and noteworthy, I leverage a platform to make a connection, then I leverage whatever to go from Damon to Barbara Corcoran to Grant Cardone, to all these guys that I've had.
Speaker 2:All these people, these amazing people, guys and girls that I've had on my podcast, and all these guys that I've had, all these people, these amazing people, guys and girls that I've had on my podcast and that's just one example about leverage. So always be thinking about um, what's the current situation? I have that I can leverage, so if you've got an in with somebody and that's an opportunity for you to make money, because if you're not making money, it's a hobby, like Kim said. So how do you use that as an opportunity, even at a muddy boots or a founding member rate, which is a discounted rate, to get some proof, to learn the ropes, to hone your skills, to then take those case studies and be like I need 10 case studies, okay, I'm going to charge a very deeply discounted price. I'm going to charge $300 a month, I want to charge $1,000.
Speaker 1:That's my eventual goal.
Speaker 2:Perfect, the first 10 seats. It's a 70% off discount. Founding member or muddy boots rate Boom, close those out. You know you're giving them something of insane value, but it comes with strings attached. You want to do follow-ups, you want testimonials, you want to use them as a case study? Right, Boomski, and then you have the ability to say Boomski. And then you have the ability apparently I'm Russian, you have the ability to then go take that to somebody that you do want to charge $ials. So people kind of did you a favor, but you also did them a favor with the discount. So we see people do that all the time to kind of get their feet wet, so to speak.
Speaker 1:Yeah, we always talk about the competency confidence loop, and that's super important. I think, like the more competent you become, the more confident you feel.
Speaker 2:And so sometimes-.
Speaker 1:And the more momentum you get, the more motivated you feel sometimes you just need to work with a couple people for free and that's what we did, you know, when we first started on both of our businesses. When I first started the agency, I just started working with chris like he gave me the opportunity was like run with marketing. I had no idea what I was doing. I was in school for dietetics, no one had taught me marketing and so I just started going through webinars and listening to podcasts and trying to implement everything that I was learning and eventually I started buying courses and like current kind of learning that. But I leveraged that portfolio into having an internship and then I started working. This was a paid opportunity, but if you can get paid to learn, that's even better.
Speaker 1:Some people, some of you guys, are like trying to enter a whole new industry or like pivoting your business and you don't have the humility to say I don't know what I am doing. I need to learn from someone who actually does go shadow people, go like volunteer somewhere, like just say hey, like I would like to work with you on the weekends and figure out like what you do. A lot of times I think we're just so in our heads about perception and I think the price of becoming an expert is actually starting from the bottom sometimes. So I worked with people for free. I took on clients for a lot less Like. My first client was like $80 a month. It was our gallery and I was managing their entire Pinterest account for $80. I was like I'm gonna go crazy, why did I do that? But I learned a ton and then I leveraged that into a portfolio where I could charge more and I think sometimes we think that we stop becoming, um, you know people who who learn new things because we reach a certain level.
Speaker 1:Chris, you and I, every time we release an offer, even after all these years of doing online business and different businesses and different industries, we still will discount something new and be like guys, we're starting this new program. Do you want to be like our beta founding members? You're going to get an amazing deal and then we get to test our strategy. Then we get testimonials and we leverage that into an actual product and sometimes, guess what? The offer or the product doesn't work out. We're like, ah, we're going to scrap this and do something different, but we've learned and that really makes a difference. I think you have to be willing to actually leverage things in your life that sometimes, because you don't have the expertise, you're going to have to leverage your time and put a little sweat equity into it.
Speaker 2:Yep, it's funny because they feel like they're getting such a good deal and they are, but they're also paying us three and a half times more than they used to.
Speaker 1:A hundred percent, and sometimes you're. Oh, are you saying that we're taking advantage of people?
Speaker 2:I'm saying when you do the things right and you deliver the service and you develop the expertise, people will start paying you three and a half times more and still think that they're getting a deal.
Speaker 1:I still think you're undercharging.
Speaker 2:Cause when you use the selling mechanisms, they sometimes realize, like, wait a minute, I am paying three and a half times more for something different. It's totally different in capacity, but we definitely anchor the price stack bonuses and it makes it an absolute no-brainer, specifically when you deliver on what you promise you're going to deliver on.
Speaker 1:So let's talk about that practical aspect. Let's get to the practical application of it, because I think we see this all the time, chris. Let's start off with like packages, how people especially because we have a lot of service providers how people make mistakes with positioning their packages and we did this at the beginning when I had my agency. But we'll see like three plans right, and they'll be like $1,000, $2,000, and $3,000. And the pricing psychology for something like that is completely off, because none of the packages seem attractive, they're all kind of like bland, and for me at least, I know we're always talking about price anchoring and why it's so important that you figure out which package is going to serve the majority of people.
Speaker 1:It's going to get the best value for people, and then how can you price it to where it looks most attractive? So we see a lot of software companies, for example. They do this. They have, like you know, the best value package and it's usually in the middle Um, and so they discount that the heaviest um and they feature it in a way that's more attractive. I think sometimes people do not understand the psychology of price anchoring and so they'll just kind of assign random prices to their packages and there's no, there's nothing special about the way they present it.
Speaker 2:I think you have to figure out which is the one that is your, your most profitable.
Speaker 2:A hundred percent, that's where you start, what do you want? What is the thing you really want to sell, and then build around that. So Kim and I just got back. We went on a cruise for our 10-year anniversary and we did the. She made it. We did the dolphin, the swim with the dolphin stuff in Mexico, right, which was awesome and I highly recommend.
Speaker 2:But what's crazy is that one. So we bought the experience first, which was like 100 bucks 89 bucks I think, because the swim with the dolphins thing was like 200 or 220 dollars. So they're capitalizing on the onset of people that like, I don't care, I want to do the dolphin thing, I want to swim with the dolphin, I'll pay 220 dollars, don't care. And there's people like us that are like do I really want to spend 220 dollars just to swim with a dolphin? I'll do the experience, which is 89 bucks, right, so still it's. It's still a lot of money just to be in there and be like, yay, dolphin.
Speaker 2:But so we were like, let's do that, that sounds awesome, right, so something that I want. They anchored it like a really high price for those that don't care, this is what I want to do. And then a lower price. It was under 100 bucks and again usually gonna look different. It's case by case, but I'm just giving you an example, right? So 89 bucks. Well, guess what they did? We're in the line and the guy was looking at people and I could tell, unless there was people with little kids that wanted to, probably wanted to do the swim thing, you know, not just because kids they're, you know, they don't get dragged by a dolphin in the water when they're seven.
Speaker 1:That's kind of scary so, yeah, a dolphin that's like 300 pounds yeah, literally, and the kids, I mean, they're moving the dolphins are moving. It was awesome, yeah, it was really cool, but anyway.
Speaker 2:So we're in the line and the guy's like hey, like you know, do you guys want to? For like 30 bucks extra per person? Do you want to, like you're? Gonna get six extra exercises for 30 bucks he was hustling the, I mean he really did a good job.
Speaker 2:Like he really did a good job, I'm like that's a no-brainer. So now we went from 89 a person to, let's call it, 120 for easy math, 120 per person, right. So they've already upsold us. Now other people are finding out they pay the 220, that we only paid an extra 30 bucks each and that really pissed them off. So be careful with some of that stuff because, they're hearing the conversation we're having. We're all in line I would not do that no, so so be careful about how you do that.
Speaker 1:But sometimes you'll get people into the lower tier and then but the example is to send them right, the example's still good, so, anyway.
Speaker 2:So we do the thing we swim with the dolphins. Everybody's excited. They took a billion pictures. Well, then they bring you to these kiosks and they literally select all of your pictures and there were 53 pictures that they took of us doing all the poses and swims and all the things with the dolphins, right between the two of us. And then they show you a chart of what it costs, right? And so what they want you to do is they want you to just buy all 53. That's what they want you to do and that's why they gave you the whole list of them. And you go through and you pick what you want.
Speaker 2:Well, the pricing and the psychology of the pricing is so crazy. You would think people would just walk away and throw their hands up, but that's not what happens. For one picture, it's $28. $8 per like. So if I got one and Kim got one, right, we've all, we've basically already spent 60 bucks. Easy math. Let's call it 60 bucks, right? Or buy the whole thing for 130. I mean, you get 53 for 130, or you get two for 60. Right. And then if you do three, I think it's like 95. Right, like.
Speaker 2:It makes absolutely no sense to not just go ahead and buy, so going into it after you have this incredible experience. Now did they ascend you after down, selling you on the dolphin experience versus the swim with the dolphins, which was brilliant, but then they're going to sell you something because now you have this incredible experience, like I have to show these pictures. I swam with a dolphin right, like literal, a huge, like an actual, real dolphin. Uh, so I'm gonna buy the pictures and some people maybe take the $28. But guess what? They just made $28 freaking dollars off of a digital picture.
Speaker 2:You download it on your phone. It's not even a physical picture, but it's, so it's anchored as such and they do it and they present it in such a way that we spent the $130 and we're like it's a no brainer. In what world would you ever think that buying a hundred or 53 pick digital download pictures for $130 is a good deal? But you, you get them like because the psychology is so strong and how they position everything in the timing that they present the offer they present to you. You go from oh, my gosh, the audacity, to oh, this is a great right, and I love that because it's a psychological principle.
Speaker 2:Yeah.
Speaker 1:I was like pulling up some of these kind of stats, and this particular article says that the cognitive bias behind price anchoring is so powerful because individuals start relying heavily on the first piece of information, aka the anchor. In that case it was like the $28. They showed us, one picture is $28, right, and so we were already associating the value of the one picture to the price. And so when they actually told us later on, oh, you can get all of them for 130 bucks, we're like well, that makes too much sense because they actually help educate us on the value of one photo.
Speaker 1:If they would have just priced each photo at $5,. We'd be like, oh well, let's pick our best five. That makes a lot more sense, but we ended up buying it because it made sense how they positioned the actual pricing. Now it says this is really important to kind of know. It also says that not just the first piece of information becomes the anchor, but it also informs how they make decisions from that point on.
Speaker 1:For example, if a high initial price is presented, subsequent prices are perceived relative to that anchor influencing purchasing behavior, and so you could do this. I don't want you to only think, well, you got to start with a low price.
Speaker 2:or high price.
Speaker 1:It's not about low versus high. It's about the relative value that something has. So, for example, in some of our sales presentations, when we talk about our pricing, we'll talk about the value and what we charge our highest paying clients first, so people can anchor and understand. They got to be educated on how our business works, what our time is actually worth. If you don't educate people on the value that you're presenting, they're coming out, you know, with no preconceived notions of what you do and they have no idea. So in the case of the client that you were talking about before, when he was trying to increase his prices, one of the things that you helped him do is educate people on why he charges what he charges. So then when he talks about his price being higher, they understand oh shoot, he works with no athletes, for example yeah she works like Nikki, for example.
Speaker 1:She works with busy executives and she charges tens of thousands of dollars to work with those people so they have an understanding of who you are and what it is that you offer.
Speaker 2:Yep, no, a hundred percent. That the how you start, guys. If you go straight, I'm telling you right now, I've done pitches and I've done a million things like this. But if you go straight to your price, you're people are going to be like it's too expensive and you're going to believe that. And then guess what happens? You start pushing your price down and it's never enough. It had nothing to do with the price not being appropriate or being too expensive. There's guys in Mexico hustling $130 pictures, digital download pictures to swim with dolphins.
Speaker 2:You can do this right, but it's a matter of how you're framing. It's all about framing and you can build your credentials. You can actually even use competitors Like we would do that a lot right. So when we ran, our first business was a moving company if you're not familiar with our story and I would use the nationwide van company, the van lines, because they're not touching your job for less than $20,000. They do the big monster moves.
Speaker 2:And so we would say we don't charge $20,000 because we're not a national van line. In fact, we don't even charge a fraction of that. We actually charge that. And then you have to validate why. How do you get away with that? Because otherwise it seems too good to be true. And so well, we have a hybrid approach, so we actually you can rent the U-Haul and we just provide the labor and we show up and we meet you where you're at and we can be more. We don't have all this fixed overhead that they have where they're requiring these big nationwide moves and these large insurance policies, and so we're able to be more malleable with meeting you with where you're at and accommodate your move, because we're built to do that kind of thing, a hundred percent.
Speaker 2:And then when they hear a price, when I anchor it now you're thinking $20,000, right Now, when I tell you that it wasn't $20,000, it wasn't even half of that and we can actually accommodate a move that fits their needs. We can actually move an entire four to five bedroom home, multiple stairs, across town. We do everything, we'll even drive the van for you and in fact it's only going to cost you right under 700 for the entire thing, which actually, if you did it on your own, you're probably going to spend at least 400 just in supplies and boxes to begin with.
Speaker 2:So you're really paying 300 for the labor and they're like oh done, deal right, so they don't realize that I just sold them a $700 move where I'm going to make a ton of money off of it. They don't know that, right, but I've walked it down and I've anchored it and I've justified it and I've built it in, and then we'll even say bonuses and guess what? We actually can sell you bonuses or say bonuses, sell you boxes that are lightly used and you'll pay a fraction of what you pay if you got them at u-haul or walmart or wherever you got home depot, wherever you got them right.
Speaker 1:So I love the price justification aspect of it because it's just educating people. It's like, hey, this is how we normally operate, this is what our competitors charge this is how much it would cost you to do it on your own.
Speaker 1:Here's our price point. Now you've set the table and you actually have a presentation that makes logical sense. Because, remember, we purchase everybody, human behavior, we purchase based on emotion and we justify with logic, right. So you need to give both an emotional and a logical argument.
Speaker 1:Now for people who are, you know, kind of going back to the packages, one last thing I wanted to say. Before we kind of talk about building value, stacking bonuses and all that good stuff, when you are trying to position your packages, to summarize, make sure that you price the package next to the one that you want to sell appropriately, just as in the example that you shared. So, going back to our previous example, where we have like $1,000, $2,000 and $3,000. Example where we have like a thousand dollars, $2,000 and $3,000. If you want to sell the middle package because it's the best value for your clients, you're going to really over deliver for them and it's going to make a lot more sense, profitability wise, for your business Then what you do is, essentially, the price gap between the middle package and the top package needs to be substantial, right.
Speaker 1:Because you're pointing people to that middle package, and then the middle package and the top package needs to be substantial, right, because you're pointing people to that middle package, and then the little package needs to also be closer to the middle one. So, for example, I will price my first package at like $900. The second package I will price at like, let's say, $1,200 or $1,100. And then my third package I will price at 5,000, so that it's very obvious, right, that the best deal is the middle one, because they're getting so much more than the little package, but the price is like $300 difference exactly, it's only $300 difference but, the difference between the, the big package is it's just yeah, way too much you want.
Speaker 2:You want to get them thinking about the decision between which offer they're going to go with, rather than whether they're going to buy or not.
Speaker 1:And even ideally, chris, I would present two instead of three, wouldn't you?
Speaker 2:Yeah, you can present two instead of three. It just depends on what you're selling, yes, but sometimes we over.
Speaker 1:For service providers it's too much of a decision fatigue. And you don't want people to have to exert so many calories.
Speaker 2:Making a decision yeah, so we'll have this happen a lot, where people I, I've been lovingly clung at this brain, brain method, uh but they think like, well, I don't know, people might want everything, and again this comes back to knowing your person, what we started with, um, and so they just put a list of services and they've got 17 services that they render and all these, well, I can do this and I can do this and I can do this, and nobody knows what the hell you do for one. But then, on top of that, you have no ability. It's fatigue, it's decision fatigue. They don't know which one to buy. And so, yeah, sure, there's nuance and there's things that they have to like. I have questions about this. Do you do this, do you do this-on menu and things you can do?
Speaker 2:Right, but, I think, yeah, depending on what you're selling, it's typically going to be two options. Uh, and even if you're selling a physical product, you could have just the item, or the item plus the complimentary item, like the spaghetti to the meatball, and you get both for this Right and they I talked about. Billy Mays, you know, but wait, there's more more. All the infomercial stuff from back in the day in our group coaching session yesterday, and if you look at what they did and how they sold those products, there is always something where like, oh, but for right now, if you call the number on your screen, you can get three for the price of one right bundle the bundle right, so the bun or it comes with a
Speaker 2:value pack. It comes with the other thing, so not only does it plug the leak, but also it, you know, evaporates the water out of the tank or whatever. You know what I mean. Like whatever it comes with it. And so you then start having them psychologically make decisions about whether they want the one thing or the both things, and now they're not even thinking anymore about whether they're going to buy or not. They're like but that's too good of a deal and that puts them over the top. And so we often talk about bonuses with like hey, we'll actually even give you the boxes because they're lightly used and you don't have to go buy your own. We'll include that in the move cost. So right now, for example, um, our group coaching, the bonuses are so juicy that they're actually buying because of the bonuses, and that's like I think most of our offers most, most of them but?
Speaker 1:but I think, like most people buy for the bonuses, most people are buying, buying for the bonuses, especially in the online space.
Speaker 2:The bonuses make it the absolute no-brainer. Yes, and they slam, dunk it and then the offer is like, oh, but I'm getting it. But also the bonuses are what they really get excited about. In a lot of cases we could do a whole episode on bonuses alone. I know we could, we should and could.
Speaker 1:Because so, oh my gosh, I have to add more things. It's like no you can pull something that is valuable from your core service, your core offer. Position it as a bonus, because most of the time it is, and stop putting so much into your core offer that you're like dying with the delivery process it usually is going to be an objection.
Speaker 2:So let's say you have three major objections. You hear from people about why they don't buy your product. Counter those objections with a bonus, like if they're not tech savvy, for example, and you have a program that they require some tech savviness. Like make it a tech call that you're going to give them. Or you have pre-designed templates that they can just upload and use. Like make it easy. Remove those objections that you know you're going to have because you've had these conversations.
Speaker 1:Yeah, or like if you're a I don't know a web designer and you have a hard time getting people to give you updated photos. Partner with a photographer, pay for like a $50 or $100 photography session. Nothing crazy, just some headshots.
Speaker 2:And you pay for it.
Speaker 1:And that's perceived value. That's so much more, and so collaborations are great ways of doing. Bonuses too.
Speaker 2:So it's interesting you say that because the perception of value according to a study by Journal of Marketing, price anchoring can increase sales by up to 15%. So just the perception of value alone presents prices in a more attractive way.
Speaker 1:And if you check out what Robert. Cialdini said I love this. He says implementing. He doesn't say this specifically, but he's talked about how implementing pricing anchoring strategies can lead to 20% increase in sales. Pricing anchoring strategies can lead to 20% increase in sales, and so just by following some of these principles, you could boost up your sales by 30%, 35%, maybe even more.
Speaker 2:I know for us it's made a huge difference, too, when we learn these principles.
Speaker 1:So, yael, I hope that you found this episode helpful. Should we land the plane now?
Speaker 2:Land it. Land the plane I think we covered everything we wanted to cover.
Speaker 1:Yeah, we covered a lot of things, so let us know in the comments what questions do you have about pricing? What questions do you have about products? We'd love to do a Q and a and kind of answer some of those questions for you we also have. Are we doing marketing makeovers?
Speaker 2:We could do marketing. Yeah, If you want to. If you want to, where do you want me to put those? Where do you want me to put those?
Speaker 1:Oh, we'll put a form underneath the video.
Speaker 2:All right, we're going to put a form.
Speaker 1:And you can enter with your conundrum, whether it's with your business or your content. And we'd love to give your business a little bit of a glow up, a marketing glow up, yeah, guys if you are ready to take next steps.
Speaker 2:You're like I'm all in.
Speaker 1:I'm ready, ready, let's go fast, let's do it. Let's like personalized advice.
Speaker 2:There's what like an 866 return on investment in coaching. I love that. It's a ridiculous, like ridiculous study and we've seen that to be true in our own business. No, it's the number one thing. It's the number one thing, people think we're nuts.
Speaker 1:We spend crazy amount crazy, like stupid money.
Speaker 2:I remember a friend of mine. I told him uh, he was like why don't you go like use, I think? I think I was trying to figure out where to spend $50,000 at the end of the year because we were going to get blown away with taxes. And I'm like I need to dump $50,000 of tax exposure. And he's like dude, buy a Tesla. I was like no, I think I'm going to go pay Ryan Levesque for one-on-one coaching. He's like what? He's like $50,000?. I'm like, yeah, but it's a full day and Levesque.
Speaker 2:And then we 10x that yeah we 10x that We've never not gotten a return on investment. Yeah, so definitely something that if you're interested and you're looking for that and you know you want to improve your sales or you're getting that objection a lot, this is what we do all day, every day, guys. We help people all the time to do it, so we'll always include that in every episode. We'll include that it's an application for coaching. It doesn't mean we're going to say yes to everybody.
Speaker 1:We're going to tell you we're honest yeah, if you're not ready for it, we'll be like listen, you need to go through watching the free stuff. Go through the free stuff. Yeah, for sure, um, but we love you. Thank you so much for being here with us. The application is going to be in the description box below. We will see you in the next one and, hey, there's also going to be a video right here handpicked for you. For what? Where to go next? So we're gonna handpick one of the episodes for you. Make sure that you keep watching um the podcast, because we're gonna keep bringing you awesome topics that you probably don't hear a lot about um in the online space, so we're pumped about that. And then there's there's some interesting uh state of the creator economy reports coming out that we're going to unpack.
Speaker 2:Do you have to dress formal for the state of the economy presentation?
Speaker 1:No, I mean, it's the creator space. Come on we got to show up like we do. But, that's going to be fun. There's really interesting stuff happening right now behind the scenes, so you want to make sure that you're staying up to date on that, so subscribe, leave us a comment. We love you and we'll see you in the next episode bye for now.
