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Value Pricing Is Good for the Customer with Troy Dean – 012
Troy Dean is from WP Elevation, which is the first and only business accelerator program for WordPress consultants. He is a musician (guitar) and voiceover artist. He began building websites in WordPress in 2000 and transitioned to running an agency in 2009. Two of his most prominent customers include Jessica Watson, who was the youngest girl to sail around the world, and they recently redeveloped the QuickBooks Blog.
Pricing is Arbitrary
* When you were a kid, what did you want to be when you grew up?
* On Troy’s show, this is always his first question.
* When he was a kid, he wanted to be a performer – a rock star or an actor.
* He was and still is addicted to connecting with a large audience.
* While he has played music and acted, he leads a tribe in his business as part of this addiction.
* After running a workshop from 7am to 9pm, he was completely exhausted, but on a high from having such an impact on people’s lives.
* What is the most important thing you can share about pricing?
* It is completely made up; it is totally arbitrary.
* Melbourne is the home of coffee and every café has a different price for the same soy latte.
* You have complete control over your own pricing because there is no formula.
* Pricing can free you to think creatively about how to attract the people you want and repel the people you don’t.
* If you trade time for money, there’s a ceiling on how much you can earn as an individual and a company.
* You are restricting your income if you have an hourly rate.
* If you are asked for an hourly rate, you are probably being price-shopped for the cheapest rate.
* An hourly rate is an arbitrary figure that two parties agree on when they can’t agree on the value being transferred in the transaction.
* Your job is to highlight, illuminate and tell the story of the value you will be adding.
* Bartering and negotiating becomes an issue when you quote a number of hours and an hourly rate.
* Tom Willmot of Human Made, whose customers include Skype, gave him the best advice when it comes to competing on price: look around and make sure you are deliberately priced higher than everyone else.
* If you want premium customers, to produce a premium product, and to be in a premium business, then make sure your price is premium.
* If you can understand the problem you are solving and the value you are adding, it becomes easier to set a price.
* How would you counsel the freelancer who is billing by the hour?
* Just stop billing by the hour.
* With new customers, you simply reinvent yourself.
* With legacy customers, it is more difficult.
* To switch to value pricing, stop mentioning features and technology, and start mentioning benefits.
* If you can consistently highlight the benefits or the headaches that you can solve for them, you can then present investment options and avoid the hourly rate conversation.
* If your customers won’t switch, you might have to fire them.
* Most customers don’t want to switch providers and will have a conversation with you about changing the way you do business together.
* You are doing your customers a disservice by not having a sustainable profitable business.
* Value pricing aligns the customer and the provider.
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By Kirk Bowman
4.9
3838 ratings
Troy Dean is from WP Elevation, which is the first and only business accelerator program for WordPress consultants. He is a musician (guitar) and voiceover artist. He began building websites in WordPress in 2000 and transitioned to running an agency in 2009. Two of his most prominent customers include Jessica Watson, who was the youngest girl to sail around the world, and they recently redeveloped the QuickBooks Blog.
Pricing is Arbitrary
* When you were a kid, what did you want to be when you grew up?
* On Troy’s show, this is always his first question.
* When he was a kid, he wanted to be a performer – a rock star or an actor.
* He was and still is addicted to connecting with a large audience.
* While he has played music and acted, he leads a tribe in his business as part of this addiction.
* After running a workshop from 7am to 9pm, he was completely exhausted, but on a high from having such an impact on people’s lives.
* What is the most important thing you can share about pricing?
* It is completely made up; it is totally arbitrary.
* Melbourne is the home of coffee and every café has a different price for the same soy latte.
* You have complete control over your own pricing because there is no formula.
* Pricing can free you to think creatively about how to attract the people you want and repel the people you don’t.
* If you trade time for money, there’s a ceiling on how much you can earn as an individual and a company.
* You are restricting your income if you have an hourly rate.
* If you are asked for an hourly rate, you are probably being price-shopped for the cheapest rate.
* An hourly rate is an arbitrary figure that two parties agree on when they can’t agree on the value being transferred in the transaction.
* Your job is to highlight, illuminate and tell the story of the value you will be adding.
* Bartering and negotiating becomes an issue when you quote a number of hours and an hourly rate.
* Tom Willmot of Human Made, whose customers include Skype, gave him the best advice when it comes to competing on price: look around and make sure you are deliberately priced higher than everyone else.
* If you want premium customers, to produce a premium product, and to be in a premium business, then make sure your price is premium.
* If you can understand the problem you are solving and the value you are adding, it becomes easier to set a price.
* How would you counsel the freelancer who is billing by the hour?
* Just stop billing by the hour.
* With new customers, you simply reinvent yourself.
* With legacy customers, it is more difficult.
* To switch to value pricing, stop mentioning features and technology, and start mentioning benefits.
* If you can consistently highlight the benefits or the headaches that you can solve for them, you can then present investment options and avoid the hourly rate conversation.
* If your customers won’t switch, you might have to fire them.
* Most customers don’t want to switch providers and will have a conversation with you about changing the way you do business together.
* You are doing your customers a disservice by not having a sustainable profitable business.
* Value pricing aligns the customer and the provider.