Welcome to this week's episode of digitally done where we are talking all things pricing. And I know that this is an episode that many people wait on. And I know that this is a question that I get asked a million times. And ladies, I'm sure you're the same. We will do a quick wraparound because in case you've missed this or in case this is our first episode.
Hi, I'm your host for today. I'm Sam winch, but I'm joined by two wonderful other ladies as well. Nikki, do you want to start us off in a round Robin and tell us a little bit about you before we get stuck in.
Okay. So I'm Nikki Kelly and I'm the founder of wisdom, which is a learning and content management platform for anyone who's sharing courses online, selling courses online, building communities, or running a coaching program.
Hello. I am Lizzie. I am a copywriter and copy coach for small business owners and entrepreneurs. And really what I focus on is equipping these fabulous humans with the skills and confidence to find, use and amplify their signature voice.
I always love your wording and I am Sam Winch the course creator, not the lunchtime food. But today we're not talking just about courses. We are going to talk all things pricing.
And this is a really sticky one. Ladies, I don't know if you find the same when you talk to your clients and your customers, but how many times you've asked, what should I charge for this? And it's an interesting one because there isn't a right answer to this question, right?
come across one. Yeah. I've yet to come across one right answer for how much should this be.
Um, but I don't find clients find the, how long is a piece of string answer have very helpful. So we've got to come up with something else. That's not just how long is a piece of string. So let's talk all things pricing. Now we were having a bit of a debrief before we hit record. And one of the interesting concepts that we came up with were two of the concepts that we came up with. I think that is worth us touching on here today. Is profit and then value perception. And I think that while we could just tell you to charge 5, it's really not very helpful because we have no idea what your current expenses are or what's gone into your product or what the value of your product is or what's involved with running it. So let's still call things profit first, and then we'll move on to the perception of value. Nikki, I am
going to start with you because I know you have a few things to say when it comes to profit, but what is profit? What does that even mean?
Well, to me, it means you're getting some sort of return on your investment that you're putting into whatever it is that you're creating. And look, based on my background as a buyer, I'm all about the numbers. So profits a huge thing for me. And You know what? When you start a business, it is sweat equity. So some people do think that when they're pricing something, it's really just based on a value perception. And I agree entirely. There is a value perception there, but there is also the fixed cost, variable cost and all that sort of stuff. But I won't nerd you out on all that sort of stuff.
a business studies in year 10. And then clearly not retained it particularly well.
When we talk sweat equity is obviously that's the, oh, I say obviously, but it might not be obvious to some, but sweat equity is that it's the time we put into something, but it's not the only expense, right? Although a lot of our man hour goes into the building, what are some of the other expenses that people might have during this sort of creation process?
Well, there's obviously the costs, the running costs, you know, like some people just don't take into consideration, but they're things like, like when I say fixed costs is, you know, the costs to actually run your business, the
physical things that you might have to incorporate, such as, you know, subscriptions that you have to commit to, to cloud tools that you might be using, or even, you know, support staff you might have, you might not have employing people, but you might be, you know, utilizing Consultants or whatever it is from overseas or wherever as well, their costs, they could be variable. But yeah, there's a number of things that do have to be taken into consideration. Yeah,
I find that? um, when I'm talking to clients about courses as well, especially if the course is the only thing they want to sell, right.
They want to make all their money selling courses that we have to consider all the business expenses. And we often have that conversation about, Oh, it's not that much money.
It's just, you know, 30 a month on Thinkific or whatever. Like they just pull a number out for the software, which is cool. But that's not their only business expense, but if courses are their only income, we need to consider things like their GST, the money they pay their accountant, the money they pay to keep the internet running.
Because if you don't have internet, you can't really run an online business. So an internet expense is a business expense that a lot of us don't consider. But if, if it's something that we need to run our business and the thing you're selling is supplying most of your income for your business. We've got to cover those expenses somewhere, right?
so sensible. What a grown up thing. Wow. This is like real adult talk today. Clearly I'm the creative in the room that just goes, ah, numbers. I know I need to know them, but I like words better. Thank you. It's super helpful though. And you know, I think as the words lay, the first thing I was thinking as you were describing that, Sam is because for, for someone like me, it is quite overwhelming to think about all of the costs.
Like I understand as a business owner, you kind of need to know your numbers, especially when it comes to pricing, but do you, do you for yourself have like a checklist that you either use for you or, or to, to hand out to your clients as you go through to make sure they get their pricing spot on.
I'm sure Nikki has a checklist because Nikki is very good at systems and
processes. She sounds like a checklist kind of a lady. I don't have a checklist as such, but we tend to use some guesstimates or estimates that are fairly industry standard. And especially when it comes to courses, while there isn't a right answer, there are Kind of standard expectations for what's on offer. So like you can say, for example, if you're buying an evergreen program that comes with no support, most people expect that to sit under the 500 sort of a mark, anything over the 500 mark comes a harder sell when they're selling a product that comes with support in some aspect, we expect that to sit more towards the thousand dollar plus range.
If you've got a lot of support, you don't tend to see a program or expect to see a program sitting under the thousand dollar mark. So. While there isn't right answers and a definite checklist, there are some industry expectations. Whereas if you put a sales page together and you go, here's this thing, and here's this price, your audience can have a disconnect between what they expect to see on the sales page and what they expect to see as the price point based on some of the other things that are happening.
And that's kind of an interesting thing to take into account as well, because while we talk about profit and expenses, like sure, I could just put a number on a program, but the market at the The end of the day dictates some of that pricing and while I could say, yep, I'm just going to put 30, 000 on it because I want to make that much a month or because I've got huge expenses. If the market's not willing to foot the cost for that, it doesn't really matter. So some of what we talk about when we talk about courses, especially, but it would apply to other things as well is what some of that market expectation around a product that looks like that. And there isn't a right answer to that, but they're kind of bands with which that sits within.
Yeah. Then I suppose there's things like, how do you quantify customer experience? How do you add that as, as either an expense or as a part of a piece of the value proposition and how do you price out customer experience or do you wear that or do you pass that on to the customer that's having the experience?
I don't know. I'm curious.
Yeah. And I don't know if I have a right answer for that. I think customer experience is normally built into a standard set of business expenses, depending on what you're doing for customer experience. If you have welcome gifts, obviously that forms part of your business expenses and some of those other components as well.
But it leads us to a really interesting point, which you kind of started to hit on there, which is the value of something. So the cost of something and the value of something, my words, lady is going to tell me are two very different things. Right.
Yeah. And this starts to drift closer to my area of at least enjoyment, if not something along those lines. Yeah, there's a lot to be said about it, especially cause, you know, like I, I, I spend my time in messaging, right? So I'm creating the sales pages and the strategy behind the pricing that's been chosen, like I don't, it's not my choice to dictate what my clients price there.
Digital things at my, my job is either to do it for them to help them land on the messaging that justifies the price. If that makes sense.
So if we're, we're looking at something that's huge value, but it's. Priced really low, then there can be a risk of a bit of a perception of that thing, maybe not being very good, which is the problem or vice versa, that something's maybe priced quite high.
You'd expect to see, as you were saying, you expect to see certain things on the same sales page.
I know you say pricing obviously isn't your responsibility or isn't necessarily part of your service, but do you ever find that you have to, you know, you've got the price point, you've got what it does, you're trying to write the messaging and you just have to go back and Like it feels like this doesn't fit, right?
Like you're trying to sell, you've got this amazing product and you're selling it for 7. Like, why are we selling a 10, 000 program for 7? Like I can write the most amazing sales page, but they're still going to get to the bottom, get to the button and go, Oh, why?
Like, is that a conversation you have to have?
It's not something that I've, I've had to have to date. Most people I'm trying to encourage them to up their expectations. Price point because most admittedly, most people that I work with a female and, and many of us seem to have a problem actually
our value and worth. So most of it's about insured like.
Can you maybe double that? There's a lot of pearl clutching that happens around, but it's, it's, it's something that they absolutely deserve the amount of work they've put in and the value that is within the thing that they're creating, whatever that might be. So while I haven't had such a disconnect between prices as like.
A 10, 000 course going for 7. I definitely see over and over again. There's many, many people that I've either work with or, or are associated with who started with really low price. And gone, well, that's what I think I can get.
So that's a tricky, tricky headspace to be in when you're pricing something, especially let's say that you've got all this amazing marketing and it's all looking very sleek and it's like opulent and then the price isn't opulent to go with it.
Yeah, you're right. There's a massive disconnect there.
I mean, you don't see Louis Vuitton or Prada or anyone else selling a 10 bag because the price is part of the brand. And you make a good point about having an opulent brand, it kind of carries an opulent price point to
You know what though? I think it's, it's really, it's, it's a really great opportunity to. Make the point that you're with, with your pricing strategy, you're setting up a certain expectation as well. So it's kind of essential that you meet that expectation or exceed it even better, you know, like meeting it's the minimum standard, but if you're selling someone a 10, 000.
Program, then it better be worth minimum 10, 000 to the person who's taking it. And they don't walk away going, well, that was a waste of time, energy and resources. So that's really comes into it as well. Like, okay, if you've got, if you've got the guts to, to ask for the 10 grand, you deserve, then make sure you deserve it as well.
like with a lot of these programs and everyone sort of tries to price and everything. And I know like with just our recent cohort that we went through with our program, that was the number one question. Everyone was asking, how
do we price and the typical thing that I would sort of pose was, well, what's the outcome?
What are they getting from that product that you're giving them or the offer that you're giving them? Are they getting, Something that's self paced is they get, are they getting something that's directed is, are they getting something that's all you like, what are they getting on the, how it's getting delivered?
But then also what is the outcome they're expecting from it? Are they expecting to achieve certain financial results, certain abilities that will give them financial results later down the track and all that sort of stuff. So that value outcome will, will be. Coordinate with the pricing that you want to give that product. But at the same time to the simple question that I always ask everyone, and you you've touched on this before, Lizzie was, you know, You know, we do work a lot with women and it's this, it's just this crazy thing that we have in our head. It's like a yucky feeling asking for something and putting a dollar value on it.
But the thing is, if we go for a job and we expect a certain salary, our hourly rate is an hourly rate of some sort.
if we're going to be putting a certain amount of hours, and this is one of the things that we do a lot, we actually work on. time investment. We actually do time investment exercises to see how much time do you have to invest to create the product, to sell the product, whatever it is.
And obviously there's a bell curve there. This is me going nerdy with the numbers, but with respect to thinking just in just the concept of it all. We have to pay ourselves and there is a point where there's sweat equity, like I touched on earlier and sweat equity is the sweat and all the rest of it that you put in.
You might not get financial return straight away, but you have to get, but you're doing this for financial return.
So you need to make sure that you take into consideration your hourly worth, not just those fixed and variable costs and all that sort of stuff, but literally put in there. I am worth this amount.
If I went for a job to sell, like to work in this field or whatever, you get paid a certain amount. So why can't you that value on yourself when you're going to sell an actual product online? You can. So I think that's something that's a mindset shift. I think we need, and I do get very passionate about this because I'm so. You're so valuable. You've got awesome, you know, information to share or whatever it is on what level, but I think, yeah, to take into consideration what that end outcome is for the buyer is a big thing. Anyway, that's my rant.
No, it is. It's a really good brand. And it kind of leads back to some of the advertising I've seen recently, which is where my disconnect in pricing was. I know that Lizzie was talking earlier about how you have a certain expectation and there's the psychology within us that, you know, we see a higher price product and we just, Naturally believe it to be better.
Right. Cost me money. It must be better or it costs less money. So it's probably not as good. Right. And there's a series of ads I've seen recently from a membership platform. I don't even remember whose membership it is. So maybe the advertising is not that great. But I've seen it a lot and it's a 7 product, but a big part of her messaging and her advertising is you wouldn't think you'd get much for seven bucks, but you're wrong. Here's everything you're going to get. And to support that here are the testimonials of all the people who who already love this thing and say it's Well worth joining, like, don't doubt the price point, come and give it a go, like seven bucks is all it's going to cost you. Come and come and try it before you doubt it, which was really clever marketing.
it does bring us to that, like value proposition that we've got to think carefully about, not just how much are we worth, but how much is the product worth and that perception of value around there as well. It's so true that I feel, and as women, I found with it, the worst at this by far that we doubt that outcome sometimes I think is the core of that message.
It's that we can put a thing together, but there's always that niggly, like, what if people don't get results? What if it doesn't do what it says on the packet? Right. And I think that comes into that mentality of pricing. It's that, what if I put it together and nobody likes it or that doesn't work. And so that doubt leads into the price point of that thing. And if we don't have. The testimonials. We don't have that behind us yet to support our work, to show that our work works. It's very hard to put a price on something because we don't feel like we've got the evidence to support the price point.
Exactly. There's that evidence, but there's also, you know, the market's judgmental. So,
and we don't want to be judged. So if you're in your early phase of getting online and selling your information, all that sort of stuff. So naturally you are going to go that safe route in hope that you're going to sort of lure people in.
They get to know you trust you and everything. And then that's when you start increasing your price, but then there's the other side of it. Where if you're offering a too low of a price, does that mean you're not confident in what you have to sell? So there's so many elements that you've got to sort of take note off. And I think a lot of the time, and I'm one of those people, I'm a huge cheerleader for people. And when I see someone saying, I'm going to offer this course for like 149, and I'll look at them and I think of how many years it's taken to earn this knowledge, gain this knowledge. It's like, dude. 149. How big is your market that you have?
How big is your fellowship? How many people are you actually going to translate into sales? Me getting numbers and, you know, translating into sales and then actually earning something from it. It's like that constant, remember your why you're doing this. I think that's the big thing too, when it comes to, and it does venture off into a whole another conversation, but the why you're actually doing this. affect the pricing you really do want to put on a particular offer or how you might evolve that offer into something else as well. So there's so many sort of Adam that there get my words together. There's so many elements to consider, I guess, when it comes to, you know, and the pricing models, you might have one product that might have tears, you know, whatever it is. There's all those things that you need to consider.
But that's, I think, gosh, there's so many different points in there. I don't know if I'll catch catch up with all of
drop the bomb and walk away. I
no, it's good. I like it because I think that it goes all the way back to the validation conversation as well. Like we're talking about having that self doubt, well, that, that self doubt kind of, you know, It gets eliminated once you've got a few wins under your belt,
one of the things is, is going through that validation piece from a couple of episodes ago, making sure that people actually want the thing that you're putting together. So that helps solidify the price. And the other thing that Many of the people in my space have taken a swing at over the years is is to do kind of a beta model or a or a
founding members price or whatever, which indicates yes, this is early doors for whatever it is.
And there'll be a testing phase to it, but it also says this price is not going to be here forever. Expect it to go. Up unless you're a founding member or, or whatever, whatever, whatever. So there's, there's a couple of things at least messaging wise that you can do
to make, make it clear that while yes, this is a low price for now, it's because we're still sort of teasing out the absolute finer details of it all.
And, and you're going to be in on the journey,
ask you, Lizzie and Sam, I'm going to ask you both because you both have two different types of models in your business, right? Lizzie, with yours, how did you go with your membership with respect to, you know, how you first started pricing it and when did you decide to change it all that?
my goodness. It's, it's, it's still a a journey, Nikki. And see, look, I'll be super transparent. I was looking at it just the other day because, you know, like we always got to keep evolving and keep looking at what makes sense. And I kind of started to have this niggle of, Hmm, I'm probably still not charging enough.
In a bunch of different ways for what I'm delivering on one hand, but also just in terms of how, how big I want to grow it and how much capacity I have for that, you know, as, as a solo operator. So that sort of played into it when I started my membership what, two, two years ago? Yeah, it's two years ago now I had a founding members offer that was just insanely low because.
Well, I kind of pulled it out of the air in a week and got it going and went, well, I'll figure it out as I go. And then people just said, yep, that seems like a good idea. And you know, as things do, they evolve over time. And I got rid of some of the things that didn't work about it. And some of the things that I really wanted to incorporate, like I say, about, you know, improving customer experience, making it an actual.
Cohesive thing that isn't just coasting on sort of, well, it's pretty good and sometimes that it could be better, you know, like, so I've, I've come through that journey of, of getting better and better and sort of having a price that represents that, I guess over time, but it's still, it's still, I would say for me a work in progress might be fair.
and you know, Sam. And the same with you. Like, you know, you obviously based on with your s like you provide that service, the actual done for you service and so forth. How have you sort of evolved? 'cause I've seen, you know, obviously past conversations, you've gone from small business to big core back down again.
This always makes me laugh because it's so true. I have gone from small business to big corp and back down again, partly because I hated working with big corp, sorry big corp. Um, but everything changes, right? Like, and Lizzie, I'm sure you'll talk about this in a moment because messaging changes, but pricing structure does change.
The pricing structure when I worked with small business, sometimes you come in with this real, like, I just want to help and we underprice. And then you lean into some bigger corporates and you're like, well, I can price whatever. Which isn't entirely true, um, but so the, you know, you upscale your pricing a bit.
And then I've moved audience back down again now. And my pricing has scaled back again. Like I have to understand that while they say get out of people's wallets, like you can't just live inside what you think they can pay. It is a consideration that small business are likely to have a smaller budget than large corporate.
I don't have a right answer for pricing in a lot of cases, but considering this type of service or solution I'm offering and who I'm offering it to. Does play a part because it changes, right? It ebbs and flows depending on who I'm working with.
Definitely. Same as your messaging. I think it's the same with every element of it. And that equally, you know, your pricing comes down to who you're targeting in the first place a bit as well, right? That's an element too, in that when you're looking at, well, some people really struggle with the word niche.
But when you are looking at your target audience or however you want to describe the group of people that you were looking to sell to, one of the things is what is their life like, you know, you kind of take into consideration things like, are they. Double income, no kids types or are they single income for kids types or like, what is the disposable income they have to spend on the thing that you're trying to sell?
And I don't, I like, I strongly advise to stay out of other people's wallets, but it also, it is a consideration as well. As far as who you're choosing to work with, because there are practicalities at play here at some people will have more liquid assets than others to use to invest in their, let's say their personal development or something.
And that's just practical. It's not about belief or, or you know, just getting resourceful or any of those funny euphemisms for going to debt to pay for the thing. Just some people will have more Resources available to them than others. And that's just reality.
Yeah. I know. I was just going to say, like, I have a rule of thumb and like, you know, we all know that pricing will change accordingly and so forth, but it is either a numbers game or a values game. And you know, if you're going to go low price, it's usually a numbers game. If you're going to go high price, it's a values game and they are games.
It's what you're doing. You're selling something, but it's also like you touched on to Lizzie and Sam, like in your own ways, but it's like a. a level of warmth that you have with that particular market. If they're a cold market that you're marketing towards, it is probably going to be the numbers are lower. Sorry, it's a numbers game you're trying to build up, but if the warmer they are, very likely you're going to be selling something that is a higher price. So that's sort of the rule of thumb that I always stick with in the sense of if you are just starting out or if you are looking to evolve or grow, think of those particular rules in a sense. Um, If you really are like, and like you said, like pricing is just, you know, it's whatever value you want to put on it. Like they say, your house value is really what is someone going to pay for it in the end? You know, it just, it's what someone's going to pay for it. So it's just doing your research as well, I think.
And yeah, that's really important. I think on that side,
there's nothing wrong with looking around at, at not necessarily more of maybe competitors, but at the very least people you could consider having a similar setup to the thing that you're trying to build or sell, you know, to see what, what roughly is there and is there a median, is there an average, is there a way high and a way low and where do you fit on that scale as well?
If, if it's similar, a similar product to what you're trying to put together.
do you have that information, Sam, did you say something about that a bit earlier?
Yeah. So I find that with clients, well, we don't always look at competitors and we don't always like focus on what everyone else is doing. There are some norms, she says in inverted commons, on the internet that you kind of see happening.
So as a general rule, I find that people are selling. Zero touch or low touch evergreen programs, so that's something you just, you just log in, you buy, you watch your videos, you read your text, for sub 500 is fairly common. 500 to say, a grand and a half, heading towards the two grand, is that medium touch program.
So it might be a short term program, maybe you join a six week thing. It's mostly just pre recorded, you don't get a lot of hand holding, but it's like a fixed. Six week product. Once we start getting into the 2000 plus clients expect some sort of handholding. So this is when you're looking at, you join a mastermind program or you join an eight week like intensive.
You may have group calls. You might have other bits and pieces. But they, once you get to that 2, 000 plus mark, people expect some sort of handholding to take them through. So we, while there isn't a right answer, you do see some common banding on the internet where people kind of expect to get a certain sort of response based on what they've spent.
Look ladies, we've covered some, some really interesting things here today, I think, and pricing is always going to be one of those things that can be a little bit triggering and brings out a lot of stuff. But what is one thing you really want people to take away from this? Nikki, I'll link around to you first.
What is one thing that when you're talking to someone about price you want them to think about or actually take away? Oh, I guess one of the first exercises we do in our cohort when it comes to pricing is I just get everyone to think about what time they're going to invest in the product. Just like you said, high touch, low touch, whatever it is.
So think about what they're actually planning on creating and how much time they're going to put into it and then calculate based on that, really put value in there on yourself, value yourself. I love that. Super practical. Lizzie, what about you? What's one thing you want people to take away when they're coming to think about their pricing?
Well, as the least numbers oriented person in the room, uh, in the virtual room, and with no practical advice to hand over at all, essentially the advice that I will give you guys, the advice that I give anybody is whatever number you're thinking of. Go ahead and double it.
I love that, like, that actually makes me feel uncomfortable. I can think about my current pricing structure and you're like, just double it. And I was like, but I don't want to. I am your, I am your target audience, Lizzie. Like that, that advice. I actually makes me feel a bit. Well, that's, that's a great, that's great news, Sam, that you feeling a bit.
Probably a sign of sign of potential growth opportunities. Um, because I think, you know, we've, we've, I'm sure we've talked about at length over, over many, many conversations, how especially female led businesses, we do a little bit of not valuing ourselves particularly well. And even probably, in fact, I could almost guarantee you double of what you're charging right now, Sam is still.
So it's a way less than what you're worth, so I'll just say that. And my piece of advice, I think we don't get sucked into what your competitors are doing necessarily, because you do not know if they are profitable or not, but it's really important to take your own value and your own numbers into consideration when you're setting your pricing.
Oh yeah. I think that's, that's vitally important. All right, lovely people. So it is time for all of those podcasty bits at the end, but what we would love for you to do is come and leave us voicemail. So you'll find all the details in the show notes below, but we have a voicemail option so you can come to us and give us feedback.
We want you to hear about how the show's going and what you've loved and what you haven't loved. But most importantly, what we really want to know is how your homework goes. So we've just given you three really practical pieces of advice that we want you to think about. Or implement or apply to your business model.
And so we really want to hear from you. How did you go doing those things? Did you do those things? Did Lizzie telling you to double your pricing scare the crap out of you? Like it's the crap out of me, probably, but come and tell us, because we'd really love to hear from you about how you're finding the whole experience.
So that is it for today's episode, but make sure you tune in for the next one. We've started to talk about all things mindset.
And I guess we've started to think about some of that when Lizzie's price doubling freaked me out. So we'll talk more about what to do if you're
