In this week’s episode, I talk to Janene Liston about the P of Pricing. We talked about understanding how to price your offers.
Janene is a highly trusted Pricing Consultant & Business Coach working with small businesses, startups and entrepreneurs across industries and the globe. She’s also a Certified Pricing Professional who has been helping businesses improve pricing and profits for over 25 years.
Her mission is to empower small businesses to be more sustainably profitable. Helping them know the value of their offer and more effectively implement their pricing. Ensuring they can confidently create, communicate and charge for the value they deliver.
She’s the host of Live with the Pricing Lady, the Podcast, a European public speaking Champion and a sought-after podcast and radio show guest. Watch out, her passion for pricing is contagious"You need to do what's right for you and for your clients. Decide what feels right for my business and for my audience and lead with that because what's most important is that you believe in the number that you use." -… Click To Tweet
In this episode, you’ll learn about understanding how to price your offers as well as…
- Why pricing is so darn difficult
- Value Pricing and what the heck that means anyways
- Pricing psychology and when pricing gets icky
- How to apply fair and humane Pricing if we want a Triple Win: win for ourselves, win for our clients and win for the planet
- What confidence has to do with Pricing
- Discounting our prices
- And much more…
Connect with Janene on:
Marketing Like We’re Human – Sarah’s book
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Janene: the two of us. Yeah, me too. Great to
Sarah: here. So Janine, we’re gonna be talking about pricing. It’s kind of one of the, I’d say it’s definitely a hard topic. You know how I have the humane marketing mandala and one of the pieces.
Pricing. And so I always have in each kind of season, I [00:08:00] have one of the episodes about pricing and it’s definitely one that a lot of people listen to cuz let’s face it. It’s not easy for us business owners. So I wanna ask you that question, why it’s not easy, but maybe for before that tell us a little bit about you and how you got into pricing.
They call you the pricing lady. So , so tell us how that all came about. Yeah. And yeah. Share a little bit of your
Janene: story with us. Okay. Yeah. So thank you. First of all, for having me here and welcome to all those of you who are watching and listening. I started my career. I’m a us born. I grew up in California.
I started my career as a structural engineer and after a few years of practicing, I decided it wasn’t what I wanted and ended up. Long story short ended up in product management. And the first thing that they handed me was a price list and it was 20 years old and without any commercial background or any real marketing knowhow, I knew [00:09:00] something was wrong with that and took it upon myself to not just redo my price list, but all the price lists and really.
Gave everything a refresh. And that was really my first foray or my first experience in pricing. I can honestly say I had no real background in it. But I just knew that was wrong and that we needed to at least fix that. After it was with that company, I came to Switzerland in 2001. And when I decided to stay here, then I was hired as a global pricing manager for Siemens building technologies.
And that was in 2004. And it’s been all pricing all the time. Since then. So it’s been nearly 20 years of just pricing. I worked in also in another industry in the agricultural industry agrichemicals and seeds industry for a while. And then in 2015 started my own business. And at the time I didn’t know what to call myself.
A coach, a consultant. And I, you know, I didn’t really care for either of the terms. [00:10:00] And one day I was explaining to someone that when I would do projects in the corporate world, I was traveling all over the place and I’d walk into a new location with a new group of people to kick off a pricing project and, you know, walk up to them and start introducing myself.
Hey, I’m Janine, I’m here for the pricing project and they go, yeah, I know you, you’re the pricing lady. . And she goes, well, why didn’t you call yourself that? I was like, I dunno, , let’s do it. And so now I use it, I leaned into it fully and, and use it. And I, I find it very easy. It’s a nice way to, first of all, introduce myself because it always puts a smile.
Either people are confused at first if they’re not native English speakers, they’re like, what, what is that? But usually people smile. It’s easy to remember. Right. And it sort of breaks the ice. So it, it, for me, it fits the bill of not saying I’m a coach or I’m a consultant. Which makes me a little bit more general, but it puts me in [00:11:00] a very different position.
It’s very clear what what I work with and what I do. Yeah. And it kind of has this
Sarah: familiar tone to it. It’s not like, oh, I’m the pricing expert. You know, it’s like, I’m the pricing lady. I, I know a thing or two
Janene: about pricing. it’s approachable. That was one of the things that when I worked on my brand. I kept using the word fun.
And of course the people who are with the branding experts were like, no, don’t use the F word . Yeah. You know, cause a lot of people try to do that and it’s very general. And I, I understood that. And then one day I realized it’s it was about being approachable. Most small businesses may feel that, you know, consultants are out of reach for them.
You know that it’s not something that’s really available to them. And I really wanted to work with small businesses and I am approachable. And you know, I work a little bit differently than you might with a typical consultant. Although I can work in that way. I, I prefer to work with people in, [00:12:00] in a more approachable way.
End fun pricing can be fun. And I’ve actually had people tell me specifically that, you know, they really dreaded going to that workshop, that pricing workshop or course, or whatever it was, but it was actually really a lot of fun for them. And to me that was, you know, high praise .
Sarah: Yeah. Yeah, totally. It’s funny because for me as well, I think about pricing and, and it’s like, you know, math.
And numbers and that kind of stuff comes up and, and, and that’s only a very small part of it. I’m sure. But we’ll dig into that a little bit today. So, so yeah. Why don’t we go back to my initial question that I thought, you know, why is it so hard for us to price? As small business owners to put a price on our services, what have you found out over the last 20 years?
Janene: Great question, Sarah. So in my experience, there’s really two reasons. [00:13:00] One is that nobody ever taught you how Hmm. Yeah, right. It’s like, you know, if nobody ever taught you how to ride a bike, you’d figure it out possibly by yourself. But you’d have quite a bit of scrapes and bruises and bumps and maybe some mild trauma depending on, on, you know, how quickly you were able to do it.
And it’s the same with anything else. As well as with pricing, if nobody’s ever showed you, how then, why would you expect for it to be just something that you would know how to do? And it would be easy and without any struggle, it’s a little bit illogical to think that it would be nobody’s ever pulled us aside in school and said, okay, Sarah, 30 years from now, when you start your own business, this is how you’re gonna set the price of your, your packages.
Right. They don’t do that. And funnily enough, most people don’t realize. While they do teach about pricing in MBAs. They don’t actually teach you how to go about setting your prices. [00:14:00] Mm, they talk about, well, there’s, you know, penetration strategies and skimming strategies and there’s price elasticity. They use all these big fancy words, but they don’t actually tell you how to go about setting those prices.
So yeah, most people don’t know how that’s the first reason. Right.
Sarah: The second reason. Can I just go in there as sure. Because also what came to mind is for the MBAs probably cause I’ve worked at an international management school here in Loza and they have a big MBA program. And so I think when they teach about pricing, they look at big companies.
They don’t necessarily look at the small business owner and the small entrepreneur as an example. Right. And that, I think also probably leads to the, I don’t know what you’re gonna say for the second reason, but I have a feeling it has to do more with the, the personal aspect as well.
Janene: Yes, it does. Mm-hmm it does you’re right.
I would say those programs are geared towards more corporates. Yeah. Uh, [00:15:00] Yet again I would say. A lot of corporates are not very good at setting and managing their prices either. Mm. Yeah. I mean, even the corporates are not good at it. How are we gonna figure it? They do. They do struggle with it. They struggle with different aspects of it.
Mm-hmm but if you think about in the larger company, who’s usually responsible for setting the prices. A lot of times it’s the product manager, right. And the product manager’s background is not a marketing one. Right. They’re an engineer or they’re an agronomist or they’re a scientist, you know, or a chemist.
Right? They have no commercial background. No. Yeah, it’s true. Yeah. So it it’s, it’s. It’s a very important aspect and a larger company. A lot of people are responsible for it. Of course, in a smaller company, you gotta wear all the hats, the finance hat and the marking hat and the sales hat, so on and so forth.
And that comes to, like you said, the second aspect of it, which is very personal and it has to do with [00:16:00] your core beliefs around money, success and worthiness mm-hmm . Yeah. And that is, you know, that is really something. Comes in full force for most small business owners because it becomes it shouldn’t.
But for many people it feels like that price that they’re setting is somehow a reflection of them personally. Right. And being able to make. You know that disconnect, you know, you’re not, I, I used to have a program called speak, believe in charge your worth. And I always had a real problem with charge your worth being in that phrase.
I couldn’t find a better way to say it. So I stuck with it for a while, but because it’s really, it’s not your worth. It’s the value of what your products are, services or. Bring the customer and yeah, being specific with your language in that way can be very important. Most of us have hangups with money, success, and worthiness that play a sabotage role in the [00:17:00] background of our decision.
So I was just got off the call with a client who is Dutch. And I’ve had several clients who are Dutch and they always think that the price has to be the lowest price in the market. Mm. But that is, you know, something that comes from in large part, the Dutch culture from their families, from their upbringing that, you know, it always has to be the lowest price.
Now, many of those clients are operating in Switzerland where people are. Generally willing to pay a bit more. They’re not always looking for the cheapest solution and yet they’re operating with this completely other mindset in a market that doesn’t match that mindset. And it really makes it hard for them.
To feel like they can charge more. So that’s just one example. Yeah. Yeah. I mean, we
Sarah: could do an hour just on
Janene: this topic alone. Right.
Sarah: And, and, and that’s yeah, you work with clients on that. It’s part of my marketing, like we’re human program, because it, it is like, if you don’t get. [00:18:00]
Janene: Like, if you don’t do the deep work right there, mm-hmm , I, I honestly
Sarah: think you can never figure out the pricing and, and, and it’s so interesting.
You’re bringing up different cultures so that matters, but then also, you know, how you grew up and, and, and all of these. Influences that obviously by the time we are ready to launch our business while we’ve been influenced by all of this. So we come with this baggage that is just like, yeah. And it’s, it’s so different from.
You know, being an employee in a corporate where it has nothing to do with you, even if you are the one setting the price, it has nothing
Janene: to do with you where here it has everything to do with you, or you think it has everything to feel it. Yeah. Yeah. It’s. Even, I mean, in the corporate world. So to me, there’s two sides to pricing.
There’s, you know, the, the more concrete side, which is the numbers and the figures, which generally are [00:19:00] feel more concrete. And then there’s the psychological side. I always tell people. Somewhat jokingly, but I actually mean in all seriousness is that pricing is all about the psychology baby. And you have to wiggle your eyebrows.
When you say that , I don’t think I’m asking. You’re not doing it very well today. I’m out of practice because whether it’s a small company or a big company, the psychology. Your personal psychology, the psychology of your organization. And this I’ve seen in large companies, the sales team thinks that price is the most important factor.
From the customer’s perspective. I will tell you nine times outta 10, when we did the research, we found it was maybe in the top five, usually within the top 10 mm-hmm . But if your sales team thinks it’s number one, That is going to impact how they behave when they’re having sales discussions with your customers.
Yeah, so it, it’s not just a small business [00:20:00] thing. It, it happens in both sides. And when it comes to psychology, you have the psychology internal to your business for a small business, your psychology usually and not of your employees, but then you also have the external psychology towards the market, towards the customer.
So it has many different facets to.
Sarah: Yeah, I wanna talk about, so we addressed the, you know, the internal psychology a little bit, because it has to do with, you know, who you are, what you believe, whether you believe that you are worthy net, whether you ever sell anything anymore or not. Right. You have
Janene: to really, truly believe that you’re worthy without ever
Sarah: getting a client again.
right. And then there’s the external psychology. And, and I talk about that also in my marketing, like we’re human book, that’s kind of. Cheeky psychology that we’re taught in, in marketing and kind of this online sales world. Mm-hmm so I’m really curious to, to hear more about that and your points of view, and what’s true.
[00:21:00] What’s not, and mm-hmm and how to deal with it when we want to. You know, apply this humane approach to running a business with ethics and not cheat people into buying your stuff just by using some kind of psychology hack mm-hmm . So talk to us about that.
Janene: Okay. Before I get into that, let me just make one more comment.
So one of the things that I’ve learned in having my own business is I thought this was a career development journey. Mm. When in fact it’s been a perfect per a personal development journey from day minus two until the day I stop, it will continue to be a personal development journey. And that’s also one of the reasons that this personal psychology.
Placed it such a big role. So you’re constantly being pushed outside of your comfort zone. Pricing is certainly one of those areas. The value of what you offer is certainly one of those areas and, and being able to have the [00:22:00] strength and the courage. To step outside your comfort zone to tackle these things is what’s going to enable you to keep pushing forward in your business and be there to deliver the great things that you wanna deliver to your clients.
I truly believe that. And I’m sure that people told me that before I started. I’m sure I did not understand it. I know, but it is 100%. My reality. Yeah, yeah, yeah,
Sarah: yeah. That’s a good preface for, for what’s coming up next.
Janene: okay. So now you wanted to talk about the psychology. So the external psychology, there are a lot of things.
A lot of studies out there. A lot of tricks of the trade, if you will. I’m not sure I like that terminology. But when it comes to, you know, having a humane business and I, I I’m, I’m not going to say that using them is inhumane or humane. I’m not making any judgment. What I really [00:23:00] feel is that as a business owner, you should understand the psychology side of it because.
Even if you’re not using it actively, you wanna make sure that accidentally you’re not doing things that are hurting your business. . Yeah. And, and that’s very possible to do. For example, I had a client a few weeks ago, we had CR gone through and created her price list. And she was getting her website ready and she had two offers, one for a very high priced.
Group high net worth individuals. And the second offer, there were two completely different offers, but one was targeted towards young adults who were just starting out in their careers. Mm-hmm . And so she had one offer on one webpage and the other offer on another, and then she had a pricing page and she had the prices for both offers side by side mm-hmm
which from a psychology perspective [00:24:00] meant that all the good work we had done was actually now working against her because it felt like cuz the prices were on the same page. Like they were competing with each other mm-hmm whereas if she just removed the pricing page and put the price for the young adult offer here and the price for the high net worth individuals here, that comparison would not be made in the same way.
That’s what I mean by you have to understand, you know, These things are communicating so that you can make sure you’re not doing things in a way that is actually hurting your business or your customer’s experience. Mm. Yeah. Now one of the things you and I had spoken about was the endings of prices.
Right? Right. You might have that conversation. yeah. Should it be 95 or 97 or 99 or zero? So I can’t answer that question. For everybody that is going to be a very individual decision in each business. Here’s what I can tell you. And then you can decide for [00:25:00] yourselves what is going to be best suited for your company prices that end in zero, tend to be associated with more luxury goods.
Prices. It ends in nines and sevens and fives tend to be associated, especially when they put, you know, 95 cents. Yeah. Or 99 cents at the end, those tend to be associated with more. Companies that are playing towards the low price leader side of things. How, how do I know this? If you go into Louis Viton you will never see 1,999 and 99 cents, right?
You just won’t see it. No, yeah. You’ll see. 2000, you’ll see, 2,500, 8,000, right. It’s just, and, and the prices will be tiny on a little teeny, tiny price tech. Yeah, you go to Miro or you go to Kmart or somewhere like that. They have big price tags with great big [00:26:00] prices on them. And there’s 90 nines and 90 fives at the bottom.
Right. So you have to, you know, what sort of, you know, how does this align with the value or with your purpose or brand? What’s gonna make more sense for you. Yeah. And, and, and,
Sarah: and how is it gonna resonate with your clients? You know, who are you trying to attract? If you have a big ticket and, you know, service and you price it with the 99 cents at the end, they probably
Janene: won’t like it well, it depends.
And it also depends. So here’s another example. If you’re say you’re a consultant, you’re offering projects. If you offer a price of 25,000 versus 24,495, right then from the customer’s perspective, 25,000 looks like a number that you kind of just pulled outta your back pocket. Whereas [00:27:00] 24,495 looks like a number that you’ve actually spent some time considering.
does that make one better than the other? You have to be the judge about yeah. What per what you want or how you want to be perceived by your customers. What’s going to make more sense right now, if you’re in an, in an industry or in a part of the world where you’re gonna be doing a lot of negotiation, then 25,000, maybe.
Just the easiest place to start. Right. But if you’re looking not to do a whole lot of negotiation, you may start with a number that’s more precise because then it reflects that that number is precise. Right.
Sarah: And if you’re in Morocco, because I just came back from two weeks in Morocco I learned that you, you know, negotiate the price down to 30% of.
They tell you, and then you go back up. So yeah, that’s something that we’re completely not used to doing the whole bargaining. Right. So I don’t recommend that. no, no. And
Janene: I think you are, you’re [00:28:00] absolutely right. Think about who you’re targeting, what they expect, what works exposed for you now, the 90 nines and the 90 sevens.
You know, those work with target groups that are more price sensitive. Yeah. They do, I mean, studies have shown time and again, that 1499 people see the 14, they don’t think 15. Yeah. So if they were to see 15 and 1499 next to each other, they would perceive the 1 14 99 as being 14. Now that doesn’t mean you have to use that in your business.
You need to do what’s right for you and for your clients. So understand why those things are things, if you will and then decide, okay. What feels right for my business and for my audience and lead with that, because that’s most important to me is that you believe in the number that you use. Yeah.
Sarah: I think that permission piece is so important [00:29:00] because yeah.
I’ve had people ask me, so do I need to do the 2 97? Can I not just, you know, say 300 just because everybody else is doing it. And I’m like, no, you just like, you it’s like, whatever you feel is right. And because when you priced the way you feel is right. then if you’ve done your, you know, intense client work and know who your client is, well, then they will also resonate with that more than the 2 97.
Janene: So, and if you’re really, really not sure, create two landing pages, change one to have a price of 2 97, 1 to have a price of 300 and AB test. Yeah. Yeah. See what works better. Exactly. Yeah. I mean, okay. You’ll make $3 or three Franks, less on each sale for the 2 97, depending on how on your margins. That could be that could make a difference or not, hopefully not.
You know, but that’s test it out. Yeah. Who says you can’t. No
Sarah: one, I have a [00:30:00] follow up question on the comparison because that’s another example that I share in the book and we see a lot where we have one same offer mm-hmm , but we have three different prices, you know, like one is the V I P offer the other one the sec, the one in the middle, and then the, the, the, the third one.
And you know, where you use that anchor system. So talk to
Janene: us about that. Yeah. So anchoring is actually really important. I always tell PE, ask people what’s the best way to sell a 500 Frank product, put it next to a 1500 Frank product. Right. And it’s, it’s, it’s actually true. Yeah, you may never sell the 1500 Frank product, but if it’s there, cause what, what you’re doing.
So the anchoring, the concept here is that people are going to want to compare it to something, right. And if you give them something else on the page to compare it to, they don’t necessarily have to go elsewhere to look for a comparison. Right. Right. So that can be [00:31:00] really helpful. Now. Also not just the price, but what’s included in each package.
So you said the same offer, but there should be three different offers. Sorry. Yeah. Say same sales page, but same sales page, but three different offers. Yeah. What’s included in those offers can steer behavior as well as the price. So let’s say that, you know, the middle offer is the one that you think is the best for most of your clients.
Right? Then you can set it up to kind of steer most of them towards that. Right. Or if you don’t wanna use that, you need to make sure that you’re not accidentally steering them in the wrong direction. Right. So based on what’s included and the price levels, you can, you can. Help them navigate through the decision
Sarah: gently influence them or, or, yeah,
Janene: well navigate.
Well, let’s, let’s face it. I mean, if I worked with a tool called [00:32:00] apathy and it is a tool that allows you to take an Excel. Like I, my pricing tools that I have on my website, they’re Excel based. Mm-hmm it take, it takes the Excel tool and makes it into a web-based tool. Okay. So just converse it mm-hmm magic.
I love it. and when I wanted to use it, they had three offers. Right. And the first offer was you have access for one, one month or three months. I forget which and then the next level up, it meant that you got a WordPress integration. And it was almost double the price. And I thought, well, okay, mm-hmm but where did press integration is really helpful?
It can really solve a lot of problems. So I thought, okay, fine. And then the premium one came with phone support and I thought, well, I don’t know anything about web based tools. I have no idea what I’m getting into and it was only 10 bucks more. So I think it went from like 30 to 60 to 70. Dollars. Okay.
And the middle one was six months [00:33:00] and the last one was a one year access. Okay. So. My logic was okay. I want the WordPress integration. So I’m willing to pay double right and have six months access. Right. And then in the next step, my logic was, I want the phone support or the, the priority support. I didn’t really care about the 12 months.
I just, and it’s only 10 bucks more. Okay. That’s interesting. So they,
Sarah: they actually wanted you to get the, the third
Janene: offer. Right? Did, but that’s where they put their focus. They absolutely did. Mm-hmm they absolutely did. And you know, if you start looking at, as you’re buying things online, look, look at how they structure the offers and you’ll see very clearly.
Usually you can tell which one are the most profitable or at least which one they’re steering you towards. Yeah. Wine lists at a gross at a grocery store at a restaurant mm-hmm . The most profitable will wine for most restaurants will be the second, most expensive. On like [00:34:00] buy the glass Uhhuh glass.
Why? Well, they know that most people don’t know a lot about wine mm-hmm so they’re trying to, you know, make a good choice, but they don’t wanna buy the, they don’t wanna embarrass themselves by no, they’re not gonna buy the cheapest and they’re not gonna buy the most expensive mm-hmm so they buy the second most expensive,
yeah. Yeah. And that’s kind of the traditional thing. So I was surprised that with this tool, They actually wanted you to get the, you know, the highest one, even though it wasn’t that much higher, because usually you see the third offer to be some kind of V I P you know, 10 times the middle of it depends.
So it was interesting to, yeah, I’ve never
Janene: seen it really depends. So sometimes. You’re right. Sometimes they use the, the premium offer as the main anchor. Yeah. Which means they make it so high price to make everything look cheaper. Yeah. But other times it’s actually the it’s better for ACY. It was better to have someone in there [00:35:00] for full year mm-hmm
Because they had just started and they were working out some of the kinks right. In this web-based con web-based tool converter, if you will, for lack of a better phrase. And so, and to have me on the phone with them, so actually, Benefit more to have people all the way over there. Yeah. Yeah. That feels like
Sarah: an honest offer.
You know, it feels like, okay, I see what you’re doing, but it’s a win-win situation and, and yeah. You know, that’s what we want. So I’m gonna share with you an example of one of my programs. So the, the marketing, like we’re human program, I ran it in January and I had those three offers. The first one was.
Online only mm-hmm I think they went for 500 bucks and then the group program 950 mm-hmm cause I run it live only twice per year
Sarah: and then the V I P program for 4,800 mm-hmm where they also got coaching besides the [00:36:00] group program. And so I thought like, you know, the, the cur the common advices, just put that V I P offer on there.
You might sell one, but you might not. And to my surprise, I actually sold three and only four group programs. So I was like, what’s going on here? Like how, yeah. Can you share some insights of what might have been happening there? Did I not put enough value maybe or perceived value in the group offer?
What do you think
Janene: was happening? Yeah, there’s a lot of things that could be going on there. The price difference between 509 50 is not very big. Did you get anybody at the 500 or was it no, not for this one. Exactly. So you made, you made the barrier very low for them to go to the middle package. Okay.
Sarah: so which I wanted, I wanted to, which was good,
Track 3: right?
Janene: Yeah. Yeah. Which is, which is good. I wanted,
Sarah: You know, [00:37:00] probably, I mean, it was great that I had the three V I P I would’ve wanted more for the
Janene: middle one for the middle, right? Yeah. Yeah. Hmm. I think, I think here it’s, it’s just a matter of people wanting that one to one support.
Yeah. So the big difference between the two packages, the middle and the top was getting your one to one time. Right. Is that correct? Am I correct in that?
Sarah: Yeah. Yeah. That’s the difference. Yeah. Between the two. So,
Janene: And I think for, you know, for some things, you know, I, I I’ve had group programs as well and I, I will continue to do but I’ve found most of my clients prefer to work one on one.
Because , this is gonna sound funny when I say it, you know, but most people will assume that. Their pricing is special. Right. And that it has to be done in a special way. It’s unique and, yeah. Right. And, and yes, every business is unique. Don’t get me wrong. I use the same [00:38:00] process with everyone, but as we go through that process, different.
Different businesses will require we focus on different areas with different levels of intensity. Right? Right. So it’s, it’s same but different. And I would guess that, you know, the, the people who went for your, your V IP package, it was really because they wanted that one to one. FaceTime with you. Yeah.
And they didn’t think that the group would give them what they needed.
Sarah: Yeah. It’s interesting. You get so much insights from, you know, just this example and, and, and then you’re like, oh, what does that mean for me? Do I want to lower the V I P do I want to increase it? Because I actually want more people in the, in the group or, yeah.
How do I play with that? And it’s yeah. Yeah. It’s just
Janene: so, I mean, I think, I think in your case you could play. Increasing the one to one package mm-hmm , but may, maybe also bringing your, your group program over a thousand. Yeah. Yeah. Yeah. It’ll, [00:39:00] it’ll be interesting how
Sarah: it plays out for the next. Yeah. I thought I’d bring it up and, you know, because these, yeah.
These examples are, are real and we’re like, how do we do this? And it’s basically just like, well, you, you try and, and then you figure out, okay, this work, that didn’t work. How do I improve it now? Right. But obviously
Janene: it could also be that. I mean, cuz they are. They are, I would guess the same, but different , which is so, so specific Janine in that, you know, one is a group, two of them are group program, and one is individual.
So having it in this tiered structure, you know, it’s. If you had say a VIP option, that was part of the group, it was really a VIP experience of the group, as opposed to a straight up one to one package, then you might see different results. Right, right. Yeah.
Sarah: Yeah. Again, what, what this tells me that is that pricing.[00:40:00]
It’s not just about a number that you put on the thing it’s also
Janene: about your offering, right? Offering pricing,
Sarah: same, same thing. Really. It’s like, well, how much value are you going to put into that price? And, and I think that’s kind of what went wrong the last few years. And that’s why I, I kind of attack some of these pricing strategies where they use these psychology hacks to, you know, sell a program for a hundred thousand and that, and the actual value.
It’s just very questionable often. And, and so that’s why, what we need to understand is like, well, what is the value that people actually get out
Janene: from that offer? Right. Well, I guess, you know, if, if the business is, you know, half a million dollar business and they’re looking to grow to be a million dollar business than investing a hundred thousand dollars to grow your business to a million is, is a reasonable.
Investment to expect to make, right? Yeah, of course. But if you’re a [00:41:00] $80,000 business and you are investing a hundred thousand to try and get to
Sarah: 200,000, then you
Janene: know, it’s, you can, the pace be made probably would most people buy into it? Probably not. Right? Yeah. So it’s, it’s all contextual and this is why.
I cannot emphasize enough when it comes to pricing. You always, always, always have to go back to who are you targeting? Mm. Yeah, because if you’re targeting businesses that are $80,000 businesses looking to get to 200, then a hundred thousand dollars offer or Frank offer is probably. Suitable for that target group.
Yeah. That’s true. And you can really make life difficult for you if you try to create, if you create an offer and then try to force that offer on the wrong target group, right? Yeah. And let’s face it. Most businesses start with, this is what I offer. Now. Let me figure out who I [00:42:00] can sell it to . Yeah. As opposed to starting with, I wanna do something for this group of people, with what I have, let me figure out how I can best serve.
Sarah: So it feels like there’s like two big problems. Either you price too low because you have all this baggage or you grew up in a culture where the lowest price is the best idea or you price too high to the wrong target audience. And I’m sure there’s a ton, tons of other problems, but these are kind of the two that stand out from our conversation.
Janene: Would you agree with that? Well, yeah. I mean, it’s much, if you. Regardless of whether or not, you know what you’re no, let me, let me think about how I wanna say this. So. Probability that you will over under price is relatively high. The more you understand about pricing, the more you can reduce that likelihood, right?
Yeah. Of being under overpriced doesn’t mean it doesn’t happen, but even, even if, and here’s another interesting part of the [00:43:00] psychology. So even if your price is a little bit high, Yeah. If you’re really good at communicating the value, you’ll sell it anyhow. Yeah. No. Now you don’t want it to be icky sales, but let’s say I, you always use this example.
So let me just use it again. There are two lemonade stands. You’re walking down the street, you run across two lemonade stands. One says lemonade, 25 cents. The other says lemonade, 50 cents. Which one do you buy? okay. In most parts of the world, you might buy one from each kid. If they’re two cute little kids selling lemonade, and just give the other one, a 25 cent tip, call it a day.
But what if the one that is 50 cents also says clean water included? Hmm. Yeah. And that’s the marketing
Sarah: piece. ,
Janene: that’s the pricing psychology piece from the communication standpoint. Yeah. That child is communicating the value of what they deliver better. Now it may be that they are brother and sister [00:44:00] and mom is in the kitchen making the lemonade, but because one of them communicated the value differently.
People are more willing to pay the 50 cents. Right. And let’s say you’re in a country where clean water isn’t assumed. Then they have an even bigger advantage. So the better that you can communicate the value of your offer. To some degree, not big, not on a big scale, but to some degree, the more wiggle room you have in terms of, you know, O overpricing let’s say yeah.
Over underpricing. And that’s exactly
Sarah: why. And what we said at the beginning, it’s not just about the, the number. In fact, the number you can change it, however you want almost with, with boundaries, but it’s about communicating that value. That’s absolutely so key.
Janene: And I was saying most people struggle. To really understand.
I see this in my clients all the time. This is where they struggle the most. When we get to the value [00:45:00] piece, consistently, I mean, there are struggles in different areas, but there’s something about that. That attaching a number. Cuz when we do the value work, we don’t just talk about benefits. Benefits are not value.
It’s what people get from those benefits that creates value. And you need to be able to understand the benefits so that you can understand how those create value and then quantify that value mm-hmm . And when it comes to quantifying value and know, it makes people feel really uncomfortable. but it’s hard because
Sarah: again, your worth, your worst kind of gets
Janene: in there.
It’s like, really? Yeah. And they’re like, well, what if you know, what if. I can’t guarantee it. I’m like, I’m not asking you to guarantee it. I’m asking you to tell a story about the value that people can get. Mm-hmm you can choose to share that with clients or not. It’s up to you, but if you don’t understand what it is, [00:46:00] then how can you believe in any price that you put out there?
Yeah. Yeah. You can’t. Mm. And if you don’t this ,
Sarah: I, I look at the hour and I’m like, oh no, we have to wrap up. But I’m so glad we brought up the, the value pricing. Cause that was kind of in the questions I, I had prepared and we just kind of jumped over it. But the, yeah, this idea of pricing for value and not like your Dutch
Janene: client just for time
Sarah: exchanged or, you know, let me get the cheapest offer out there so that I get the most clients.
It is so important and I think it cannot be repeated enough and, and you’re right. It’s, it’s difficult. I mean, it’s,
Janene: you have to believe in the value that you bring. Yeah. Yeah. And if you don’t look at it and, and put number to it, Then you’ll really struggle to believe in it. And like I said, if you don’t, they won’t there’s always a few gem clients out there who believe in spite that you [00:47:00] don’t , but those, you know, those are, are often few and far between and the best thing for you and for your clients is that you understand and believe in the value that you bring.
Sarah: Ah, this has been so good. Thanks so much, Janine. This you’re welcome has been really valuable. I wish we could. Maybe we will do a second round round. hard to, yeah. But do you share with our listeners where they can find out more about you and how you work with clients and, and all of that? Yeah.
Janene: I encourage people to head on over to the pricing lady.com.
Very easy to remember. I have a podcast you’ll find some great Information on there as well and regular guests and also solo cast episodes, which are a little bit more instructional. And of course, if you’d like to book a call, you can find that there as well.
Sarah: Wonderful. And I have one last question and that is what are you grateful for today or this
This one? Yep. I’m grateful for opportunities like this. I [00:48:00] really enjoy sharing this topic with people and, and helping people to think differently about it so that they can gain momentum towards having a more sustainably profitable business. So thank you very much, Sarah. Thanks for everyone for listening.
Sarah: you, Janine. Take