Jasmine Star (00:00:01) - Welcome back to The Jasmine Star Show, a place where we discuss a lot of things about business and how they intersect with mindset. And today we are going to be mixing it up by talking how all of this is connected by pricing your offer. But first, I want to address the elephant in the room when it comes to pricing. A lot of times people have a hard time talking about money, but they have a much harder time talking about money in relation to their offer and a much harder time talking about how money is correlated with their offer and correlated with them providing that offer. And so I first want to acknowledge that it is a choice, probably not the best way to start this podcast, if I'm going to go out and like put a line in the sand, but that's what I do. There are facts. And the fact is, in order to stay in business, you must charge something fat. Now here's where it gets tricky. A lot of us hold beliefs around a fact, and so you and I could both charge ex for what it is we offer.

Jasmine Star (00:01:20) - But my feeling, my belief towards it is, well, I have studied, I have learned, I feel confident, I'm open and willing to test and this is what I believe my time is worth considering the type of profit that I would like to make the same, similar, same offer is a fact. You must get paid for what it is you do, but the belief you have around that might be slightly different. It might be complicated with well, I'm not sure if people would pay well. I think I'm charging too much. I might be charging too little. I don't have as much experience. I don't actually have a storefront. I don't have a degree. And so what happens is that we apply beliefs towards a fact. The fact being, we all need to charge something for the thing that we provide. Now, what I want to do with this podcast is I'm not here to change any facts. I can't change your mind. You are the only person who could change your mind.

Jasmine Star (00:02:13) - But what I would like to present would be a series of different beliefs that we might have towards our pricing. And at the end of this episode, all I want to do is present different ways of looking at and testing your pricing so you feel very confident. And before I actually get on further from that point, I actually want to start off by stating what I know to be true. Over a decade I have built businesses and I have to tell you that there is never, not once in over a decade, a time where I ever did not think about pricing. Pricing is part and parcel of what it is we do. And so I think that when I started my career, I had this deep desire. It's like once I figure out that pricing thing, who am I to feel confident? I don't have to change it? And all I can tell you is that the only thing constant about your pricing is that it's always going to change. So if it's always going to change, why would we not feel empowered? Why would we not feel this ready willingness to say every year, every six months I'm looking at my pricing and I'm constantly testing my pricing because the market changes, demand changes, my experience changes, my cost change.

Jasmine Star (00:03:21) - So if we know that this is the thing that we do in business, let us not have any of our beliefs convoluted what is in fact true. And I think that I kind of came out of the gate hot because I came across a statistic in Rachel Roger's book, We Should All Be Millionaires, and Rachel said that 55% of women discount their offers without being asked, okay, now, this is not like a gender conversation, but there are major facts and statistics that I should kind of be pointing out to be like, if you're a woman and you're listening, more than half of women are discounting without being asked. So let's just imagine how many women discount their offers when they're asked, like, have mercy. And I am here to tell you, without changing your belief about the fact. The fact is, you must get paid to be in business, but you have these beliefs tied to the facts. I am here to ask you to think about, to embody, to challenge yourself, to change the belief you have around the facts.

Jasmine Star (00:04:29) - Now, I completely understand any business owner black, white, Asian, Haitian, male, female, like everybody has a desire to be accommodating, right? We want to make our offerings accessible. We want to be in business. But how do we do this? By not devaluing our offer. How do we do this without losing money? So, you know, I think about this from two perspectives, from when I first started my career to something rather recent. And so oftentimes when I started my career as a wedding photographer, a client, a prospective bride would come in and she would say, hey, this photographer is offering the same that you're offering, but they're charging $5,000 less. Now, I could say, oh, I'll. Match it. I could say, oh, well, you know, I have this photographic training, and while that might have an impact, if she's looking at just dollars and cents, it's not going to have that much of an impact. So how then, was I able to create a wildly competitive business charging a lot more than the average competitor? Well, what I needed to do was present value that wasn't associated with the price.

Jasmine Star (00:05:37) - And so, for example, if somebody came to me and had an apples to apples comparison, I wasn't going to drop my price. But there were things that I could do to make her feel that she was making a better decision, and it was equitable to both parties. So, for example, if I said, okay, my collection comes with eight hours of coverage and another photographer is charging $5,000 less for $8,000 of coverage, what I would be more than willing to do would be to add an hour or two to your wedding day, so you'd get more coverage. In addition to that, I have a second shooter that's my husband, and we have been shooting since the beginning, and many photographers will bring in other second shooters. Well, my second shooter has been consistent, so that in and of itself is valuable and trustworthy, that we have a cadence that is different than the norm. And so I didn't lower my price, I didn't compete on price. I simply came back with a different value offering.

Jasmine Star (00:06:34) - Now, lots of things have changed in my career and over my life. And so I often think about what might I be able to do now to not devalue what it is I do, but to give more value to the party who's interested? So let's take an example. As a speaker, I'm booked to teach, give keynotes, things like that, and oftentimes very similar in the photography world. Events will come and say, oh, well, there's another speaker who talks about the thing that you do and they charge X amount, which is thousands of dollars less than what you're charging. Now, I could say, and maybe, maybe one day I will. But as of right now, being a mom of a toddler and running multiple businesses, I'm not in the market to, you know, be the bargain barrel speaker. I'm just not. This is the cost that it would be for me to get on a plane and go somewhere. But instead of me saying, oh yeah, I'll compete on price, I would always be able to come back and say, what might I be able to give in excess of? So I might say, hey, I would do a prerecorded 30 minute training in preparation of my keynote as a value add for the attendees, or when I'm there, I would be able to do a 30 minute Q&A session or a panel after my keynote as a way to express gratitude and give more value to people that are there now.

Jasmine Star (00:07:51) - I didn't compete on price and I didn't lower it, but I said I might be able to do a little extra to ensure that both parties feel seen. Okay, so we've kind of gone through spectrums of my personal examples, and today we're going to be covering why pricing is one of the most critical components of your business strategy. And also my love language psychology of pricing. Y'all, I love the brain. I love psychology, but when psychology and business become interconnected, I am like, let's go. And then we're going to tie things up with a four step pricing framework. You guys hang on to your hats. This is the wildest ride in the West. Okay, so I want to start by talking about why pricing is so critical for your business success. Now I'm going to state the obvious your price directly impacts your bottom line. Now sometimes people feel like, oh, I feel it's awkward. It's this like, no, no, no, I understand. Maybe it's a delicate dance between the value you provide and what your customers are willing to pay.

Jasmine Star (00:08:49) - Now, when you price something correctly, your business not only covers the cost, but it generates a profit. Now here's where I want to have a little bit of a caveat. I speak to many business owners who say, well, my offer is worth this much, and I'm like, great, wonderful. Has the market paid that much? Because we have this direct connection to what it is we produce. If you paint, if you write, if you take photos, if you sell dentures, if you sell contracts, you're part of that process. And so you say this is worth that much. But if the market doesn't pay for it, the market has spoken. It's not worth that much. Now, on the other hand, if you put something out and it's flying off the shelf or you have so many sales you can't keep up or you're just like blown away at how fast it's growing, it means that you've probably underpriced your offer. So in basic terms, as you build a business and you're saying, I want to make money and I want to continuously grow, you must cover your costs.

Jasmine Star (00:09:51) - So know what those costs are, but then also allocate for profit. Now, I am never wanting to say you must be doing X amount of profit every year. Not at all. But I will say that generally speaking, if you're just getting started and you want a healthy trajectory of your business, you should be allocating planning setting for anywhere from 10 to 15% now. That usually makes it worth your time and the energy and the creating and maintaining your offer. Now, if at the end of the year you realize that you're not profiting anything, you basically have a really expensive hobby. Now for people in the digital space courses, memberships, e-readers, ebooks, education. I've seen profit margins upwards of 40 and 50% on those offerings, so there's not an industry standard. But to make something worth your time, always be thinking somewhere in the ballpark of 10 to 15%. Now, if you're in a rapid growth mode and you're constantly reinvesting, those numbers might drop here and there. But to have a clear path of how you're going to get back to where you want to go now, what you charge can shape how your potential customers see you.

Jasmine Star (00:11:00) - It's the difference between being perceived as an exclusive luxury brand, like a high end designer, versus positioning yourself as an affordable, more accessible option like a budget friendly store. Okay, I have to tell you, there is not a right or wrong. When I started my career as a photographer, I was so desperate to get work that when somebody would ask, what are your prices? I would say, what's your budget? And I'm like, huh, great. Funny, that's what I charge. I was taking anything because two things mattered the most to me. I wanted to build my portfolio and I wanted to build my name. And in order for me to do that the fastest way possible, I needed to get proof of concept. I needed to prove to myself that somebody would pay me in exchange to do something I so desperately wanted to do. And then over time, I quickly started raising my prices. And so I'll come out and say, when I started my career as a photographer, I was the bargain barrel photographer.

Jasmine Star (00:11:55) - I would shoot a wedding for $1,000 and other people would scoff at that, like, oh my God, you're basically the Walmart of photography. And perhaps I was. But two big things happened. I stacked proof I didn't just book one wedding, I didn't book two weddings. I booked over 50 weddings in less than two years. And over that time, my skills got better. And over that time, my portfolio got so much better. And over that time, I continued to raise my prices. So much. So I continuously change my prices again and again and again that I moved into the luxury market in less than three years of my career. So while people were like, oh my God, she sold the Walmart. Later on, clients of means saw me as like the Neiman Marcus or the Saks Fifth Avenue. So what happened there? Sure, my skills got better, and sure I got a lot more education. But what really happened? My price reflected status. In an industry, nothing is right or wrong.

Jasmine Star (00:12:58) - Louis Vuitton is very profitable and so is Walmart. It just depends on the business and how you want to be perceived. So we kind of got to this point like pricing is important, which we all know. Right. But I want to talk about the psychology behind it. When you're going to be using psychology in your pricing, you're going to be able to evoke an emotion that makes people feel really good about buying. And I just don't take this in a transaction between myself and a customer. I am taking this psychology to evoke an emotion. When somebody is doing a business deal with me. Two business deals lead to money, even if it's not a clear transaction at that moment. So this is a real time example. I've been partnering with other companies on a project that we're going to be announcing in February, and I'm so excited about it. But as we get into these contract negotiations, I literally made a video and I sent the video to all the stakeholders, and I individualized it to each company who I want to work with.

Jasmine Star (00:13:57) - And I said, my goal in us partnering for this project isn't so that it's a 50%, 50% win. My goal is that it's a 5149. I want you to walk away from this experience thinking, man, we got 51% value. What am I doing? It's the psychology. I'm stating the psychological belief, the psychological hope, the psychological emotion that I want that party to be associated by working with us. Now, that was the psychology of building out a relationship that I also want to be applying towards the customer experience. After somebody buys something for me, I want them to feel, wow, 51%. This is incredible. Now, here are five different psychological pricing strategies that you can use to help you get more sales. Now y'all know how we do with our frameworks here in the podcast. Before I dive into each one, I'm going to tell you what they are so that you can take notes. Strategy number one is the decoy effect. Strategy number two is odd versus even pricing. Strategy number three is bundling and adding bonuses.

Jasmine Star (00:15:02) - Strategy four is creating a sense of scarcity and urgency. Strategy number five is showing that your offer is in demand. And strategy number six is offering tiered pricing. Y'all you know how I do. You're. Going to hear examples. We're going to break this down because this podcast is about taking action. I don't want you listening. I don't want you watching. And then being like, that was cool. No no no no. Just one thing. One thing from every episode. And you are going to end up a stronger entrepreneur, a stronger founder, a stronger business owner with a lot more confident, not because you know it all, but because you're taking small, tiny actions every single episode. Strategy number one, the decoy effect. Okay, I love this. Now I don't use it, but I love when I see it. And now you're going to start seeing it everywhere. So when you introduce an additional, less attractive option, it can make the other options that you're putting out seem more appealing.

Jasmine Star (00:15:52) - Now, this effect is usually used to highlight the value of a specific product or service. Okay, let's get into an example. So I read a study. Starbucks wanted to sell more vents. So they used this decoy strategy effect. So um vents it's their large size right? Starbucks is so fancy they can't say large. They say venti. And they said we want to sell more vents. And this is how they do it. So they offer their 12 ounce drink. Let's just say their 12 ounce drink is $3.50. They're 16 ounce drink is $4. And their 20 ounce drink that's their venti is 450. Okay. Now they introduced a larger size, the Trenta, which is a 31 ounce drink priced at $6. Now, they don't really want to sell more trendies. They want to sell more vents. The higher price point and the unnecessary amount of caffeine in the trenta makes the venti seem like the biggest value and the best choice. By placing it as a it's in the middle. It's not the most expensive.

Jasmine Star (00:16:59) - Ah, that's how they're positioning that option, even though the Trenta is technically the cheapest per ounce. So now let's take it back. We see Starbucks go from three options when psychology tells us that most often people feel comfortable choosing the middle option, so they were selling more of their medium. The Grande. Is it the grande? Is that what the medium is? Anyways, we're gonna hold y'all. You can tell I don't really drink Starbucks. The middle option. The medium. They were selling more of the medium. They said, how do we get more people to buy the large? Well, let's introduce the extra large so that the standard large looks more appealing. Y'all, that is the decoy effect in full effect. Now take a look at your offerings. Do you have three tiers? Do you have three offers? Is there any way that you can add a fourth to make a third option look more appealing? Hmm. Okay, let's move on to strategy number two. Odd versus even pricing y'all.

Jasmine Star (00:17:57) - This is like classic pricing strategy 101 prices ending in odd numbers. For example 989 they're perceived as more affordable. And you're going to see a lot of the big box retailers like target, Walmart, like, you know, they have like a ton of options. When they really want to push a product, they'll simply add a 0.99. It's interesting. Now, on the other hand, prices ending in even numbers like $10 can be perceived as higher quality. Oh, right. Crazy. Why even numbers often feel like a standard. So you're going to find this a lot in higher end designer stores. You're not going to walk into a high end designer store and see something. 4.99 you're not. So let's break this down with an example. Imagine you are shopping for a new pair of shoes and you come across two options. Now the first pair is a pair of running shoes, and they're priced at $99.99, and the second pair is priced at $120. Now, the store owners strategically used odd pricing for the first pair of running shoes in two different ways.

Jasmine Star (00:18:55) - Number one, they set the price to end with a nine, number two, with them being $99.99. They're perceived as more affordable due to them being under 100, even though the price difference is just one penny, right? This owner has a harder time selling a pair of shoes for $100 than he or she does selling that same pair of shoes for $99.99. Now, on the flip side, the shoes that cost an even $120 they're most likely statistically perceived as better quality and more high end. Okay, but let's get into the psychology here. This is crazy. If I wanted to buy a pair of Nike's on a deep psychological level, I know that the Nike's are not all that different from each other. If I am comparing the $99.99 to $120, I know that there isn't some magical air in the $120 shoe, but the $120 shoe? Well, surely it must be higher quality. Surely something must be different when it's not. It is psychological framing up of price to. Differentiation using odd and even pricing.

Jasmine Star (00:20:16) - Now let's think about what your offers are. How do you want to be positioned? How do you want your offer to look? We are in the process of putting out a very y'all. I keep on talking about it and I feel like I can't spill the tea, but I will tell you that this offer is ending. Not in $0.99, but in 99. Why? It's a debut offer and the price will increase after a time period. So what am I doing now? I'm framing up the odd price so that it looks and appears like this thing is at a discounted rate, and in the future I will use even pricing to anchor it. So let's go back to our strategies, because I do a lot of like I'm going off in different tangents and I want to make sense and follow along. Make sure you're following along with the notes. Strategy number one was a decoy effect. Strategy number two was odd and even pricing. And now the third strategy is bundling and bonuses. Y'all, this is my wheelhouse.

Jasmine Star (00:21:16) - Like I love this stuff. And it took me so long to actually understand how powerful it was. So when you bundle different products and services together, it creates a feeling. It creates a feeling. I want to pause there because we're talking about psychology is when you bundle things, it creates a feeling that your customers are getting more bang for their buck. Like, the whole package seems way better than buying everything separately, and it's a really smart move that benefits both the businesses and the customers. Y'all remember how I talked about 5149 I love this, so imagine you're considering to sign up for a digital course. Option number one is a single course for $100. In option number two is a bundle of two related courses for $180. And option number three is a package with three courses, additional resources, and exclusive webinars for $220. Now, options two and three look like the best deals because they're getting more knowledge and resources for a price that's less than if they bought each course separately. It triggers FOMO.

Jasmine Star (00:22:19) - Okay, now when we talk about bundling, psychology states that people are more inclined to want to avoid the loss of something more than they're inclined to save money. So, you know, like this bundling. People often say, oh, well, people should bundle so that they save money. Yes, that's true, that does work. But the reason why bundling and bonus is work so well is people are psychologically more adverse to losing something. So now let's talk a little bit about bonuses because this plays into why somebody is going to buy immediately for fear of FOMO, fear of missing out, offering something for free no matter what the size can trigger a psychological response known as loss aversion. People are more likely to make a purchase to avoid missing out on a free item, even if it's small. Okay, so back in 2016, I launched a course and it was an Instagram for business course. It was called Insta 180 and we launched Insta 180 and it did really well. I was really surprised. It was phenomenal.

Jasmine Star (00:23:23) - And then we launched it again about 6 or 8 months later, when we decided to launch it for the third time. We were in the middle of the launch and I really wanted to make a splash, but people had already seen the offer and I wasn't sure how to talk about it differently. That was going to drive things home, so I was having a conversation with my mentor, not about the launch. We were just having a conversation, and in the process of our conversation, he had said something, oh yeah, like, I wish you could just write that caption. I was like, oh, sure. I'm like, I could write a caption like, look how easy. I just have a hook. Some insights. Your call to action. What do you want them to do? There you go. And he's like, man, I wish you could. Wait a minute, Jasmine. I wish you could write me 100 captions. And then I was like a light bulb went on over my head and I said, I can write caption templates that could be customized for different business owners.

Jasmine Star (00:24:14) - Now, this wasn't necessarily done for you, but it was like a done with you. And so with 48 hours left in the launch, I stayed up. You all like I stayed up so late. I put together a PDF. I wrote not 100, but 101 y psychology of pricing. It was. I wanted to end on an odd number. It wasn't 100, it was 101. And the bonus was called 101. Instagram Caption Templates with less than 48 hours, I added the bonus. I went on my social platforms talking about this bonus, and people wanted the bonus as much or more than they wanted the course itself. That was hands down the biggest launch that I had ever done for Insta 180. That Instagram for business course. Now I don't have that course anymore. But I look at that and it was like everything shifted in my perspective because I had experienced other launches where you make an offer and people were excited about it, but I had never made a offer. With a bonus that was perceived as more or the same value as the course itself.

Jasmine Star (00:25:21) - And that's when I said, oh my gosh, every time I put something out. This bonus should drive as much value as the course itself, or as much desire as the course itself. Because when people want to lock that thing in, they're just so much more closer. Not just a closing the transaction, but to feel so good about that transaction. So I want to now move on over to the fourth pricing strategy, which is creating a sense of scarcity and urgency, creating this loss, right, where everybody's like, oh, I'm going to be risk averse. When you can create a sense of urgency or scarcity, it encourages faster decision making. And as business owners, that's what we really want. It's the people who vacillate and take the longest. They have a tendency to be the most uncertain. They ask the most questions and become the most demanding. It's like, have you ever experienced when somebody comes in, they look at your offer like, boom, done, got it. This is what I want.

Jasmine Star (00:26:15) - And you're like, how do I get more of that? How do I attract more of that kind of customer? Now, I have noticed over time and I've done this again and again and again. Using limited time offers, low inventory alerts, price increases, disappearing bonuses, a limited amount of seats, or the door is closing. Now we've seen like low inventory. We see like Amazon do this like only three left or buy your ticket now before the price increases things along that nature. So this strategy in particular it makes potential buyers think they will never be a better time than right now to buy this. And that's what we all want our customers to think. We want everybody to think, wow, now is the time to get this. Wow, I'm making such a great decision. This is why things on Black Friday do so extraordinarily well. There's this commonly held belief that now is the right time to buy, because I will never get a 12% discount on this eye cream again. Most likely, statistically you will, but you feel a lot better about it on Black Friday.

Jasmine Star (00:27:15) - Y'all. The psychology of buying. So let's get into a little bit of an example. An owner of a small bakery makes these delicious red velvet cheesecake cupcakes, and she only makes them on the first Saturday of the month, so they sell out fast. Actually, scratch that, I don't want to use this as an example. This is like a made up example when I could use a real one. There is a restaurant here in Newport Beach. It's a cafe. They only stay open till 130 in the afternoon, and they only do cinnamon buns every weekend, but they do a limited amount. And so it's a tiny little cafe. And oftentimes you'll see a line out the door and people in the line. It's like pandemonium. It is the craziest experience. People are saying like, can you hold my order? And the hostess, bless her heart to the front, she's like, sorry, we can't hold any orders. You can only make the order at the table. And then other people will say, I'll pay double, just hold my order.

Jasmine Star (00:28:08) - I want to pre buy my order. Can I order it to go and then have them heat them up when I get into the cafe? You guys, I was in this line being like why, what are these cinnamon buns laced with? This is crazy. But people were driving orders due to the limited amount. That is scarcity. And I mean, y'all, we experienced during the pandemic, right? It's like you see pictures of people in Costco buying 897 rolls of toilet paper. Like, how many years do you think you will not be using toilet paper? But what was it? Scarcity. This is the psychology of buying. So if you know that there's a psychology buying, look at your offers and think, is there a particular point in time that I might be able to drive a limited amount of time to buy a limited amount of offers? So you want to start thinking what is going to make a person make that decision faster. And this plays into the fifth strategy. So I think that the fourth and fifth strategy are very similar.

Jasmine Star (00:29:00) - But the slight difference and this is going to be showcasing your product and service. And then you want to show like, whoa, there's a lot of demand for this. Okay. As much as we would hate to admit it to be the truth, it is just the truth. People associate popularity with value. It makes you cringe right? Because you're like, yeah, but how do I become popular? So I'm more valuable? Like, why is my offer not as valuable as that other offers? Just because they have more followers, they have a bigger newsletter list, or they're just having to be friends with those famous people? Listen, I don't make the psychological game, it's just how people often perceive it. So people associate popularity value and it makes him seem more exclusive and prestigious when other people want it. Okay, hold on, time out. Is it prestigious or is it prestigious? See, I say prestigious, but maybe it's just because I think that's the way the Brits say it. And I just think everybody in England sound smarter when they talk like prestigious or prestigious.

Jasmine Star (00:29:58) - Let me know, let me know. Send me a DM, let me know. Do you say prestigious or prestigious? I'm so roll with it. So popularity makes themes seem more prestigious. And what happens during this is something is floating along that lines. People have fewer hesitation, right? Because they're just like, man, this thing has. Had sustained popularity. This thing has been more exclusive. It's been so much more successful in the market. When people see that again and again, they're more likely to make a decision faster. So let's bring out an example. Let's say they're this really popular taco truck called Tomas Taco Truck. And Tomas has homemade pickled radishes, mango jicama or I'm sorry. Okay, hold on a second. I say mango jicama because that's how you say it in Spanish. But I'm probably going to get people being like, what did she just say? Let me try that again. Mango. Jicama slaw. Mango jicama. Okay. Yeah. It's like the whole nine yards.

Jasmine Star (00:30:52) - Like Tomas has a taco truck. Or actually, should I say in espanol? La toda la enchilada, right. Like you go to his taco truck and he has it all. Now, every night there's a line stretching around the block for his specialty tacos. There's a lot of hype on social media about the masses. Tacos. And they're like, oh, these are a must try. And then people are taking photos and they're like proudly sharing it. Like, look it tacos. Atomos says it was worth the wait. You know, that kind of content is worth its weight in gold because the constant demand and the social proof, it makes the taco truck seem like a really special treat. It's worth the way you want to talk about it. So how can you apply this to your business by your most popular offer? Why not? Why not label it for what it is, label it as the most popular or the most loved? Now we see this a lot happen in like tech offerings. Like if you want to buy like a SaaS offering or a software product, you'll go in and be like, they give you like three monthly options or four monthly options, and they'll label it like best value, most used.

Jasmine Star (00:31:52) - And I'm like, call me basic. Y'all call me basic. But if I go to an online retailer and I'm very unfamiliar, I will click on the tab that says Best Sellers. Does that make me basic? It probably does, but I don't have time to go through and like, let me find the voice of this brand. I'm really just going to be like, let me see your best stuff. If I like your best stuff, I might order it, test it out. But basically what they're saying is, here's the fastest way to get to a yes. And you've probably seen this like on Amazon when they're like the stores choice or X amount of hours to get it before Monday. This is inciting people to make a psychological decision faster. And this leads us to our sixth and final pricing strategy, which is to offer tiered pricing. This doesn't work for everybody, but kind of log it away and see could it apply to your business when you're offering different pricing tiers for products or services, you're going to be catering to different customer segments.

Jasmine Star (00:32:42) - It provides options based on customer's needs and budgets, and so when you have a few more options is going to be increasing the likelihood of conversion. So if you want a full breakdown on tier pricing, I recorded another podcast. That podcast was focusing on creating a digital course. I loved creating it. We got a lot of great feedback. If that's of interest to you, I'm going to link it for you in the show notes because we go much deeper into it. But there's a few things that you might want to consider when you're if you when if you are offering tiered pricing. Number one, tiered pricing creates accessible options for more users. So even if somebody is joining at your lowest tier, it increases the chances of them upgrading later or buying another product in the future. When you create other things. And studies show that somebody who bought from you is four times more likely to buy from you again in the future. So getting somebody in on a lower tiered might really help in that ascension model for your customer.

Jasmine Star (00:33:40) - Number two, it can create a higher ticket volume. So having 2 or 3 options leverages the psychology of perceived value. So this is going to motivate a buyer to go for the higher tiers to gain access to additional features additional benefits. And it also applies with tiered pricing simply for savings. I have seen, uh, let's just say a digital product offered for, let's say, $1,000 pay in full. And then I have seen that same offer offered for $1,300 in two pay. So you would be able to pay two payments of like $750, $750. Let me do that math. I don't do public math. No, $650. So one time payment, $1,000 or two payments of $650. Now that client is going to be paying more over time, but smaller monthly payments make it more affordable. And then if you went to like a three pay, they would be paying more a smaller amount per month, but they'll be paying more. Overall, this is just getting people into your orbit, knowing that if you do a great job, they're not going to be a one time buyer.

Jasmine Star (00:34:52) - And then the third one is that you can create a down sell or something has like a catch program thereafter. Now this is going to keep people from going to your competitors if they can afford your other offers. So think about this this way. I have seen somebody make an offer, and if somebody can afford the offer, they will follow up in an email sequence offering them something considerably less expensive. That is somewhat satiating the desire but not offering the same solution. This is what you call like a down cell is. If you have an offer, say, for $1,000 and people can afford it, well, then later on in the sales cycle, you might be able to pitch them an offer for $250 that has less benefits, less teaching, less bonuses, things like that, just to initially get them in and as a customer and then get them started on the Ascension model within your organization. Okay. Are you're like Jasmine, you're talking so much. I know, I know, I care about this stuff because I've made so many mistakes over the years.

Jasmine Star (00:35:43) - I've learned a lot over the years. And so this is my distillation. I can't wait to rerecord this podcast in a year or two years, and talk about all the other stuff that I have learned. So you might be wondering, how do I use this pricing strategy for my offer? And first let me tell you, there is no right or wrong because no business looks the same. I want you to take one thing and test what works best for your audience. You might even use several of these strategies just for one offer. So I'm going to tell you for our upcoming offer your biggest launch ever. Y'all do do do do do. I feel like I want some laser horns? Wah wah wah wah wah wah. I'm so freaking excited for this thing. But one of the reasons why I'm so excited is I have been able to launch in public, which means I am launching a program to teach people how to launch. So I don't want to get like super meta on you, but like, I am doing the thing I want to teach people how to do.

Jasmine Star (00:36:44) - For so long I had offers and there were digital offers, and I would put them out there and it was fine. It was getting me a little bit of money and I was like, whoa, look at me, I'm doing something. And then all of a sudden when I shifted the structure and the strategy and followed things diligently and then spent, like no exaggeration, hundreds of thousands of dollars over the years on consultants like I paid a consultant $50,000 just to go through an email sequence for me to figure out how to optimize it. That's bananas. That is not accessible for a lot of people, but it was definitely worth it for me. And I started learning how to strategically amplify how to do this. And so as we put out this offer for your biggest launch ever, and now that I know the psychology of pricing, I want to talk about how we're implementing a lot of these decisions in what it is we're doing. So this is a live course experience. I am teaching this course live.

Jasmine Star (00:37:32) - It is not recorded in advance of like I'll be teaching it and then is recorded and people can watch it, but I'm doing it because I want people to finish it. I'm doing it because I want people to not feel alone. I'm doing it so people have accountability. I'm doing it because I'm sick of people buying courses and then not finishing them. So it's just like, dang, let's do this. Put the fire under your booty. You got an offer? Let's go. Let's get more people to do that. And so what you're going to see is how we have priced this offer. You're going to see it priced with the 99. Why we're telling people that we're raising the price after the doors closed. And that's if we actually decide to launch it again in the future. If we decide to do that, we have the option and we will use the option. We will absolutely charge more. We want people to be like our like first sojourners. We want to do this and say like we want big case studies, we want big testimonials.

Jasmine Star (00:38:18) - And so it's like, let's get in, let's do this. And so first we are going to be offering bundling and bonuses. And we're going to have different incentives for purchasing. We have different incentives and bonuses for showing up live for paying in full. I'm literally using this podcast as an example of what we're doing in real time. And going back to that, y'all, every bonus that we have put out, I wanted to look at that bonus with the same eyes that I did. That 101 captions. Is that bonus just as valuable, or do people want it just as much as the course that they would just be like, I need this thing now? Secondly, we're creating a sense of urgency with a hard deadline to join. We are closing the doors and we don't know when or if we will launch this. I am looking at all of this as an opportunity to test the market. What does the next level entrepreneur want? How do we get people doing six and seven figure launches? Based on the things that I have learned over time? Okay, so now I want to decide and we're going to talk about deciding the dollar amount to charge.

Jasmine Star (00:39:22) - Here's my y'all. This is so super simple. Now I do not pretend at all to be a pricing strategist or, you know, the go to price analyst. I just am here to offer new ways to look at similar things, to create a new belief around the fact. Step number one is to consider your cost. Step number two is to compare to others in the market. Step number three is to consider your ideal clients willingness to pay. And step number four is to test and iterate. Okay. Let's start with step number one. To consider your cost, I want you to look at both your direct and indirect expenses. So what does this mean. Well software materials team hours your labor. So now let's talk about deciding the dollar amount to charge. Here's my super simple framework to price your offer. Now I am not pretending like this is the supreme way all I am. Proffering to do is have you think slightly differently about how you've processed and price things in the past. So remember, the goal that I stayed at the beginning was to help you form new beliefs around facts.

Jasmine Star (00:40:28) - So I'm going to name each step before diving in. Step one is to consider your cost. Step two is to compare to others in the market. Step three is to consider your ideal clients willingness to pay in step four is to test and iterate. Starting with step number one. Consider your costs. I want you to look at both your direct and indirect expenses. This means software, materials, team hours, your labor if you've invested in a mentor, and any additional expenses that played into creating your offer, calculate your total cost and then add on a profit margin that you find fair and reflective of the value that you provide. Again, I went back and I'm like at minimum as a good, safe place to set a standard as a gauge. That would be 10 to 15%. As a suggestion, step number two is to compare others in the market. Now I want to start off by saying clearly from the outset, this is not at all intended for you to say, well, I can't charge that much because that person charges that much and they have more experience, they have more followers, they have more credibility, they have more education.

Jasmine Star (00:41:34) - No, no, no. But then at the same time, I don't want you saying, well, I must charge more than that person because I have more experience. I've been in the game longer. I know more what I'm doing. Heck no. Do not set your prices in comparison, but have a general idea of what the market standards are. I always believe the more educated you are about your market, the better and more confident you're going to feel about your pricing. So to start, maybe finally three competitors offering similar products or services and check out the features, the benefits, the duration, support level or anything else that they're adding to their offer to create value, identify patterns in their pricing structure, and use that insight to inform, not change. Not set just to inform your price. And this is going to help you from under or overcharging your offer. It's going to help you stay competitive in the market without devaluing your product or service. But remember how we said there is luxury pricing and there is not so luxury pricing, and both business models are totally profitable.

Jasmine Star (00:42:35) - Louis Vuitton and Walmart still totally profitable, but they understand their market and they understand who they're serving. Step number three is to consider your ideal clients willingness to pay. It's important to understand their preferences and perceived value. And there are two ways that you can do this. Number one, you can ask them directly. I recently did this for that upcoming course that we're launching. It's not even a course. It's a live course experience. Yes. Don't get it twisted. You all will hear change in the game. But I reached out to people who I want to buy this course. I legitimately told him straight out, I am creating something for you. Let's talk about your pressure points. What have you invested in? What are you missing based on what you've invested in, what has not transpired, and what value would you put on that? I'm not asking, can you tell me the court like how much I should charge? No, no, no, I'm just trying to get aggregate data of what they spent and what they want solutions to and what they would pay for that solution, to see if my offer can get in alignment with that, or if you're not asking anybody directly, you can indirectly gather insights through Instagram polls.

Jasmine Star (00:43:42) - You can do email surveys, you can do Google searches for data and analytics. Literally go to Google and type in your question. Any question, you would be surprised what data exist out there that people are sharing. Now, this is going to let you in on historical buying decisions, somebody's willingness to pay market trends, what people are willing to pay more for, and, you know, they might even be listing some of the objections they have towards a particular thing. I'm telling you, Reddit and Facebook groups are a trove of valuable information for reading and getting into the minds of prospective customers. Now let's break it down. For example, think about it this way if your career coach for people graduating college trying to find their first job in their field, they probably don't have a lot of money to pay for a premium price for private coaching, but they might be able to afford a lower ticket, lower touch offer. Now, if you find out that your price isn't reflective of your ideal clients willingness to pay, you can do one of three things you can adjust your ideal client.

Jasmine Star (00:44:46) - You can adjust your offer, or you could adjust your price. Now, please understand that I listed them in that order, because what happens is somebody's first reaction to not getting the purchases that they want from an offer immediately is, oh, I've overpriced it, but have you really? Or could you just change who your marketing to? Somebody who has more money? Could you change what the offer is to attract somebody? Who's looking for slightly different things. Or perhaps when you know that you're fully drilled in on the offer and you're fully drilled in on who is buying, well, then maybe it's time for you to assess pricing. But remember, there's three different ways of looking at the changes that could be made. And so settle in on that before you get to step number four. And this is where a lot of people are like, oh, I'm uncomfortable. Yes. Step number four is to test and iterate implement your pricing strategy. It's only after you put out an offer and you put a price on it that you can make adjustments.

Jasmine Star (00:45:44) - Please understand. Very few people get it 100% right 100% of the time. It is so normal for people to engage with their customers. It is so normal for people to adjust pricing. It's so normal for people to adjust the offer. That is normal. And sometimes as business owners, we want to say, I should have this figured out or other people aren't struggling with this, or why do I always feel like such a fool? Like, do not place those beliefs on a fact that 99.99% of entrepreneurs are fluctuating their prices, depending on a myriad of factors. This is normal. You are normal. This is the norm. So buckle up baby. We're building out how to price or offer for today, which it was. Flash might change in the future. Now, like I've said, this is not one and done work. You just want to make sure that you're constantly looking at your pricing and aligning with your business objectives, and you want to say, how do I serve this business and how do I serve those customers? So once you've done all four of those four steps, you can then make an informed decision about pricing your offer.

Jasmine Star (00:46:55) - Now we're going to review what we just talked about in a moment. But what I really want to do is I want to invite you to my free masterclass, how to create a promotional Launch Plan to Double your Revenue in 60 days. I don't know if you can hear in the background, but JD and Luna are just. I think they're having a like a dance party and JD is yelling and if you can't hear it, God bless it, because I'm raising my voice into this microphone hoping you don't hear the salsa dance party that's going on. Because I'm trying to keep this Uber professional. Okay. But you want to know what, let's salsa dance. You know, it's like I'm just going to show up exactly how I am. One of the things that I talked about was when we were placed with adoption for our daughter in 2020, we had 24 hour notice to get to Las Vegas. And despite our best efforts to plan when you're in the adoption process, there's no such thing as planning for maternity leave or paternity leave.

Jasmine Star (00:47:46) - There's no time like you're in it, and all of a sudden a child drops into your lap. And so I was so proud that when we were replaced with our daughter, we were in the middle of a pre-launch promotion. We were in the middle of gearing up for one of our biggest launches, and I am so proud that the structure and the formation in our plan that we've been using for years was going and moving without me having to be the driving force behind it. And so for years I was like, this thing has changed my life. This launch plan, the way that we do it in the particular methodology and why we are hard nosed about following what we know freaking works is because it works. And so I'm teaching a master class. I am teaching you everything that I learned in all the mistakes. Creating a promotional launch plan because I want you to double your revenue in 60 days. I know you're saying wait, wait, what? And I am saying, oh, yes, absolutely.

Jasmine Star (00:48:46) - In this life class, you're going to learn the exact four pillars that I use for my seven figure lunches. And I want you to learn how to implement them. Like you're not going to come here and like it's going to be a walk in the park. Oh no, no, no, you're going to come and you're going to learn how to create a sales page that keeps people understanding what you're offering and keep them interested. And then drilling down, like what we talked about today. Oh, yes. And finding out that dream price for what it is. Good. It's getting you prepared for this. Exactly what you need to know to create a master class that converts to sales. Which is why I'm teaching a master class, because remember what I said? I'm launching publicly. I want people to see what the heck that we're doing. Also, the key to building an email funnel that converts your readers and keeps people interested. Y'all, I am telling you, we have frameworks of what actually is palpitating to get people to continue to read.

Jasmine Star (00:49:31) - And I will say all day, every day that the emails and funnels and communication from myself and the team are what converts customers, not the biggest splashes, biggest social media marketing opportunity. That totally helps in awareness. But right now, when you are in a sales mode, your focus, the way that you show up and what you're doing specifically in your business to promote your offer has to change. Also, you're going to learn my step by step framework on defining a crystal clear conversion message. Okay. You can go to Jasmine Starcom forward slash launch. I want you to secure your spot. I'm going to be teaching these live classes. You can come on for business coaching and Q&A. I'm going to be opening my launch model. So you see every dang piece of it and then learn all the mistakes to avoid that I have made over the years. Okay, so now let's review what we've talked about today. And if y'all are noticing. Speaking of launching, I am putting out content in advance of these live classes to prepare you to make a financial decision that's going to change your life and business.

Jasmine Star (00:50:31) - So I want to be very forthcoming that I want you to do for your offer what I am doing for my offer. I am literally living this launch out loud, telling you simply follow the framework. Work because this framework has been proven again and again and again. Remember earlier in the episode when I talked about. Insta 180. That was the very first course I ever launched and I had had. I had other physical products, I had launched ebooks, I had launched video tutorials, I had launched email templates, I had launched systems and productivity resources for photographers. So, you know, I just thought that putting out a course would be very similar to other stuff that I've done. I created courses for other organisations to sell. I just didn't know what I was getting into. And then when I actually put together, after learning all of these tiny pieces, making content for other people, making courses for other people, I thought to myself, I think I want to try this thing myself. I was not expecting, on that very first launch to make $255,000.

Jasmine Star (00:51:38) - I was not expecting that. And that is the power of having a launch plan, and that is the power of showing up with a strategy. And that is the power of putting your nose to the grind and saying, I'm tired of playing small. Okay, y'all, I am like, I'm so excited for this class. Uh, okay, let's go back and let's review what we talked about today. We talked about why pricing is so critical for business success. And it's because it directly impacts your bottom line and it can impact the perceived value in the market. We went through five different psychological pricing strategies that can increase conversions. And I'm going to go through them again. Number one was the decoy effect. When you introduce an additional less attractive option to make the other options seem more appealing. Strategy number two was odd versus even pricing. The third strategy was offering bundling and bonuses. The fourth strategy was creating scarcity and urgency. And the fifth strategy was showing your product or service has demand. And the sixth strategy, the final one was perhaps offering tiered pricing if it's in alignment to your offer.

Jasmine Star (00:52:42) - We then went over a simple framework to price your offer, and those steps were number one to consider your cost, number two, to compare to others in the market. Number three was to consider your ideal clients willingness to pay. And finally, step number four, which is my favorite and least favorite test and iterate. Understand that nothing is set in stone. It is normal to always evaluate and reevaluate your pricing into. All I want to provide in this episode is a way for you to apply a new belief to effect. Thank you for joining me on The Jasmine Starr Show, y'all. I make these solo podcasts. They are a labor of love. The team, and I think to ourselves, what do you need to hear right now? What conversations can we have that are going to open your eyes to a different possibility? What if, by some chance, this one podcast episode is the tiny key to unlock a new way of thinking for you? I would be so eternally grateful for you to subscribe to this podcast and better yet, join my live class at Jasmine star.com/launch.

Jasmine Star (00:53:49) - Y'all, I want to see you. I want to see the podcast contingency show up. Like always. Thank you for listening to The Jasmine Star Show. My.