Podcast Episode

TRANSCRIPT

Hello and welcome back to the Sales Show. I'm your host, Maree Kirkpatrick. And today I want to talk about something that I keep noticing every time I go to the shops. I've just been up the road with the kids. We are nearly finished school holidays.

So we decided to go out on a little adventure today. And I found it really interesting to have a look around the stores and it just got me thinking about pricing. Right? So today I want to dive into something that every business, I believe, every business owner needs to hear. And I see a lot of people also asking about it on Facebook posts, in business groups, all that sort of stuff.

And it's about pricing. Pricing isn't just about your product, okay? It's about your market. It's about your timing. It's about your customers' desires needs and wants.

It can also be based around location and who it is you're serving. Now, we have just had Easter here in Australia, and if you're like me, you may have had to buy some Easter eggs for humans. I was going to say small humans, but I also bought some for bigger humans too. So. And it really got me thinking.

A lot of people are talking about the increase in cost of living and everything increasing and all that sort of stuff. And I think that the Easter egg. Buying was the first time that I was like, wow, things have really changed. But because I'm in sales and because obviously I deal with a lot of businesses, it's so interesting to watch. To watch the way people buy and to watch the way people sell.

And so I believe that Easter is a perfect case study for this because a lot of us can relate to and understand it. We've just been through it and I think it's a really good indicator that pricing isn't just a one size fits all. And it's not just your price once and you forget about it. So when you think about it, right before Easter, the shelves were loaded. Not even the shelves, the stores were loaded with Easter eggs, Easter things, baskets, all.

All the things, right? They were everywhere. Big shiny displays, special offers. I don't know if you're aware, but even the way that people or stores colour their pricing makes a big difference. Or saying in her sales club, the other day, one, there was a display of Easter eggs.

One week I went in there and it was a big yellow sign, $10 for some eggs. I was like, okay, cool. Walking past, noticed it. I then go in a couple of days later and I walked past that same display. The price was exactly the same but the colour of the ticket or the document that had the price on it was white.

So they changed it from yellow to white. Okay. And it got me thinking, I wonder the difference in the amount of units they sold versus on the yellow and the white. Because in this particular supermarket they have trained us to be looking for yellow tickets. Yellow tickets mean sales, means it's on sale, means it's probably cheaper.

But if you don't actually read the ticket properly, subconsciously we're already making that decision based on the price, based on. We're making a decision on the price based on what we're visually seeing. So I think this is a perfect example. So big shot of displays and you're paying. I don't know, let's say that the Easter egg that one of the Easter egg I was looking at was $8.

And I was like, wow, that's really expensive. I swear I didn't pay $8 last year. But that's okay. There's a demand, right? There is a demand, there's urgency, there's emotional connection.

I need this for Sunday. I don't want people to wake up or I don't have a gift for someone. And so this happens all the time. It happens around Christmas, it happens around Easter, it happens around big holidays. But I don't if consumers are always aware of it.

And then what happens the day after these events? So the day after Easter, that Easter egg is then half price, half price. Clearance sales everywhere. The eight dollar egg is now four dollar. The Easter hunt baskets.

And I'm saying the baskets because I had to buy a basket for my 8 month old baby who wouldn't even know that it was Easter. But the mum guilty me was like, he's got to have an Easter basket. So I paid full price for this Easter basket. And the stupid thing is it took me so long to decide about this Easter basket. Ridiculous.

Because I knew on Easter Monday or the Tuesday after Easter that that basket was going to be half price, if not less. Okay? Same product, same quality, different, different timing, different market need, which then means different price.

And this is exactly what happens in business. And if you don't understand this dynamic, you're either undercharging, over complicating things, or you've completely missed a real opportunity to offer, to price your offers. Right. Okay. So today I want to talk about why pricing is about market demand, not just your effort.

And how timing and desire influence what people are actually willing to pay and why you're positioning matters more than what you think it does. And I always talk to my clients about value based pricing. Okay. And value isn't always what you put into it. It comes into exactly what I've just said.

It comes into the timing, it comes into the people that are purchasing it. It comes into what it is that they're needing from your products or services. Now I work with a lot of service based business. I also deal with product based businesses as well. But the concept is still the same across both different types of business.

Right. It's not just about your product. Often we'll think, well, it took me 10 hours to make this and so I'll base or charge based on my time, right? And I know some of you have done this, I've done this in the past. Okay.

When I first started out in business, I was like, okay, I'll charge based on my time. And I even went back as crazy as thinking, well, if I was earning this much per hour in corporate, then I should base my consulting services on that price per hour as well. Crazy. Absolutely crazy. Or I see courses are like, this is eight modules and 25 videos, so it must be worth X amount of dollars.

Now, pricing isn't just, just about how much you put into it. It's not about how much time you've spent developing it. I was talking to someone the other day and I was looking at buying one of their digital products and they’re like but it's taken me two years to buy to create this. And I was like, that to me doesn't justify the price that I'm wanting to pay. It wasn't even based on a price.

If it was $50 or $5,000, that wouldn't have changed the way that I was talking to her about her product because the product didn't meet my need at the time. Right. I couldn't see the value in it. And so it's not just about what you put into it, but your pricing also is about how much your ideal client wants and needs it. It's about how much your ideal client feels like they need it, the urgency around it, okay.

And it's also about how your offer fits into their current situation. So their life, their environment, their business, whatever that is based on your product or service. And so like just with the Easter eggs, when the demand is high, the perceived value is high, okay? It's like, oh yeah, we spent $8 on an egg, who cares? Until you walk into the store the next day and you're like, oh, $4, that feels rubbish.

Maybe you don't think that maybe it's just me that thinks that. But I want you to kind of keep that in mind when you're talking about your prices, your pricing. When demand drops, prices drop because the emotional connection isn't there, the desire isn't there. The way that people are buying has changed. Okay?

Pricing isn't emotional for you, but it's 100% emotional for your customer. Okay? And it's when we understand that, that we can price from the right place, not just fear based pricing. Okay? So we want to look at it from a value based.

Let's use another example that I recently saw, another one around Easter. Don't judge me. You know, when you go to buy a bottle of water, now I know every single person has experiences whether you've bought the bottle of water or not. You've, I'm sure you've noticed it. Okay, so you're at the grocery store.

Maybe a bottle of water is, I don't know, depending on the water, you're buying $50, maybe up to $3, $4 if you're fancy. Okay? Then you go to an event, something maybe like the Easter show. If we keep on the theme of Easter and they're like 7, 8, 9, $10 for the same bottle of water, there's nothing different about that bottle of water. There's nothing, there's no special magic in it.

There's no gold sprinkled through it so they can charge a few extra dollars. Same product, same brand, same plastic, same contents, same outcome that you're getting. Same hydration, different environment, different emotional triggers, different price. At the grocery store, you have options, you have time. There's probably no urgency at the Easter show.

You're hot, you're thirsty, you're desperate. There's not a lot of options out there. And the business that is selling this water absolutely knows it. Okay? And guess what?

They still sell water at the Easter show or at special events. People still pay, people still buy it. And it's not because it's about the logical side of it. It's because it's about the need, the environment, the timing and the desire. Okay?

So the value of that water has increased because people like, yes, I want that water and I need it now. I'm willing to pay for it. So pricing is about understanding the human behaviour and the way that your customers are buying. It's about understanding the environment that you're in more. It's so much more than about what's fair or what people will say to you on a Facebook post when you put it out there.

The amount of people that I've seen put posts into groups that say, how much would you pay for this? And I'm like, that is the worst way to price things. Okay? We want to look at the value, we want to look at the environment that your clients are in. What are their needs, wants, desires?

What is it that they're really looking for? That is how we need to look at pricing. And the same applies with all your offers, right? So how do we actually use this or how do we implement this into your business? But here's what I want you to think about.

When you set your prices, understand what your customer's level of desire and urgency is, ok? Are they window shopping? Are they actively shopping? Are they looking for a solution? A lot of businesses or service based businesses, people aren't necessarily kind of like window shopping.

They don't go on the weekend and be like, I'm just going to Google some random stuff and see how much things are. If I have no interest, no desire and no need or want for it, right? If they are needing something, they'll go looking for it. And a lot of the time people will pay a premium to solve their problem. Now the amount of clients that I have come to me and say, Maree, can you help me with my business?

I want to increase my sales. I don't think my messaging on point. I'm just not getting as many people through the door as what I would like. And they will say things to me like, I don't want another course, I don't want another programme, I want it solved now. I want hard, quick, fast results and they end up working with me one on one and pay a higher price for my time, my energy, in my specialties, okay?

I also want you to understand that positioning your offer is where it becomes valuable. Are you seen as a luxury? Are you a necessity? Are you a convenience? Are you a nice to have type product or service for businesses or for consumers?

And the way that we get that across is in your branding and your marketing and the confidence and the way that you put yourself out there. All of that influences how people perceive your value. Okay? If we go into the car manufacturing side of life, I'm telling you that a Porsche or a Ferrari does exactly the same thing as what a Toyota does. Okay?

But the way that they position those two cars is very different. Very different. Very different price tags too. So I want you to consider when you are looking at your pricing, what position do you want to be in your market? Okay?

Are you low end, high end, luxury, necessity, convenience, Nice to have. Okay, then what we want to do is we want to match your pricing with the current moment or environment. So are you launching a limited time offer? Have you got a product that fixes things with an urgency side of it? Because pricing can definitely reflect urgency.

Are we offering Evergreen Access? That pricing might look different again. What about timing? Timing isn't everything, but it's a massive part of the equation too. So we want to make sure that you are matching your pricing to the moment or the environment that you're in.

Okay. And then the other thing I want you to think about is don't apologise ever for charging based on value. Okay. When the penny dropped for me, and it's funny that I say penny when we're talking about pricing, but when the penny dropped for me, my business was. I first started out with my consulting pricing, being around what I was getting in a corporate environment.

And I was like, okay, cool, this is nice. Like, you know, m getting paid a little bit more than what I was earning before. Excellent. All bells and whistles. Everyone was happy.

And then what happened was I started to see the results that my clients got. Doubling their turnover, tripling their turnover. And it wasn't just like doubling their turnover while they worked with me. It was constant, doubling their turnover year on year. Because learning to sell is a skill set that they can apply over and over and over again.

And so it was like, well, my value is huge. This isn't just like a one on one hour that we're working together or three months that we're working together. This is ongoing knowledge, skills, and a service that they will never. You can never not know how to sell once you know it, if that makes sense. It's kind of like riding a bike.

I haven't ridden a bike for a very, very, very long time, okay? But when I learned how to ride a bike, that skill is now in my body, my muscle memory. I know that I could get on a bike tomorrow and be perfectly fine. And I may be a little bit of wobbly at the start, but I know that I know how to do it, okay? So I want you to look at your value, not the effort that you're putting in, not the hours, okay?

So stop trying to price based on your hours or the modules or the worksheets or the time you've invested in it, and start looking at that transformation and the solution and what it actually means for your customers. Like, I say this to my husband all the time. He fixes bodies. He helps people with their physical Body, right, injuries, rehab, all that sort of stuff. People will pay physios a lot of money to get fixed time and time and time again.

What my husband does is he will fix you and then teach you how to strengthen your body, how to stretch your body, how to look after your body so that it's ongoing, right? And he has the physios come to him, he has osteopaths come to him. He, he has Chiros come to him. He has elite athletes come to him. There's a reason why people are coming to him because it's not just based on a one hour service.

It's they now know more knowledge and the value is there for them. Okay? So remember, if we even go back to the Easter egg side of it's an Easter egg is literally just chocolate wrapped in foil, right? It's like, it's nothing special, but so delicious. Nothing special, right?

But it's magic for a child. It's tradition. It's seeing your kids on Easter Sunday morning with their face lit up because they've got a little treat. And you can never get those Easter eggs all year round, okay? You can get chocolate all year round, but you can never get those specific Easter eggs all year round.

So they kind of become a little bit exclusive or time sensitive. It's about the joy, it's about the memories and it's basically celebration wrapped in pretty foil, right? We're selling the outcomes and the emotions, not the physical product or the physical service. And we want a price accordingly to that. Okay Wrapping this up, I want you to understand that pricing isn't random.

It is purely strategic. So here's some of the key takeaways that I want you to know about today. Surprise, surprise. Your pricing isn't about what you think it's worth. Okay?

If you feel like you are trying to convince people on your products or services, I would highly recommend looking at your pricing. If you're not comfortable with your pricing, you need to change it. The reason why I say that is is because if you are going to talk about your pricing and you are stumbling and you're not confident in it, they're not going to be confident in what it is that you do. They're not going to believe in what it is that you're doing based on that. The way that you talk about it.

It's about perceived value in the mind of your client, not the perceived value in the mind of you, but in the perceived value in the mind of your client or your potential clients or your customers. Okay? And it's also about the environment you're creating around your offers. Okay? It's not just about throwing pricing out there and hoping it sticks.

And we also want to look at the timing and the need and the emotion that you're bringing to your clients and the way that you show up to meet it, the way that you position yourself, the way that you position your branding, the way you talk about your products and services is huge when it comes to pricing as well. So if I'm asking someone about their product and offer and they're like, well I've been doing this for 10 years, I don't care. 10 years doesn't mean anything to me. Show me what you can do. Show me how this is going to impact my product and my service.

Show me how this is going to impact my business and give me value. Or even if you're not business to business, show me how this is going to bring in an emotion, create a feeling, create a memory, create something. Okay? So pricing isn't just plucked from thin air. It's not plucked from freaking Facebook groups.

It's not plucked from like how much would you pay for this? Because I guarantee you, if those people are like wow, I really love your products and services. I yeah, I'd pay $100 for that. And then you go to launch it and then you got crickets. Trust me, it's not based on your pricing, okay?

It's deeply connected to your client's needs, wants, desires, the timing and how you position your magic. And I want to leave you also on the understanding and that what I believe is wholehearted truth and I get my clients to really embody this too. You are absolutely allowed to charge. Well, you do not have to put a price on your self worth. Your business and you are a separate entity, you are absolutely allowed to create that urgency from a place of authenticity.

Okay? If you're putting things up like offers close tomorrow and then it turns out that it doesn't really close tomorrow and if I emailed you, you just let me in anyway, that to me isn't authentic and I, that to me can be really brand damaging for people. Okay? And I honestly believe that the best way to look at your pricing, a lot of the time, not always, but a lot of the time, is to in your value confidently be really, really clear on what it is you do for your clients and your customers. Why would they want to work with you?

Okay, we talk about all this sort of stuff in her sales club. So if you are feeling challenged around your pricing, if you struggle with it. If you're like, I'm not really sure if this works, come in, come and have a chat. This week we have a sales accelerator call. So it's not just like a Q and A, it's like what do we need to do to move your sales forward?

This is the kind of stuff that changes businesses. And I honestly believe if you're in business, you deserve to thrive. You deserve to have everything that you want out of your business for it to support you, your lifestyle, your family, whatever that looks like for you. Okay, so until next time, go and grab your half price Easter eggs and I hope you have a great week. We are coming up to the end of the month.

Make sure you're looking at your tracking your metrics, what you need to do, maybe even assess your pricing. I look at my pricing every couple of months. Is it working? Does it feel good for me? Are we sitting at the right price point, you know, what are we adding, changing any of that sort of stuff.

And I always say to business as well, this is on another random side note because I'm wrapping it up, but I'm also giving you an extra little goodie on the side. If you do not have somewhere in your yearly plan to look at your pricing or have a price increase, I guarantee you that you probably haven't done it for a little while. And when I ask clients if they have had a price increase, I go not for a little while. And then what people go to do is go, haven't done a price increase for a while. So what I'll do is I'll chunk it up a whole heap more rather than have small incremental price increases.

Easiest way to upset your customers is just do massive price increases and feel like they're locked into it or that they don't really have a choice around it. Okay, so make sure you've got plugged in somewhere in your year to look at your pricing, thinking about increasing prices, any of that sort of stuff, small percentages or small steps rather than big giant increases because you haven't done it for a little while. That is all for me. Beautiful people as always. If you've got something out of this podcast, I would love to hear from you share on social media.

Let me know how you go with your pricing. Until next time, have a magical week. Bye.