Salutations, friend! Pricing your services is both an art and a science and can feel especially complex when pricing your service for corporate opportunities. In today's conversation, we'll talk about a framework to simplify the process of pricing. Today you'll learn how to identify and apply The Pillars of Pricing⢠so you can price with confidence. The Pillars we discuss may apply to every business, but what they look like will be unique to your business. Hit play and settle in, friend. Let's get started.
đŻ Top Takeaway from Today's Episode
When all four Pillars of Pricing⢠are in alignment, you can confidently price for the full value you create and the value your prospects want to experience.
đ Key Points from the Episode
The Four Pillars of Pricingâ˘
đĄ Take Action
Take the "Am I Ready to Charge Five Figures?"Â quiz to know what areas may be holding you back from leveling up your pricing or what areas position you perfectly for a price increase.Â
đ Links
đ§ Listen to Episode 27: What's Required to Attract High-Value, High-Paying Clients
đź Work with us: Apply for a Priced for Profit⢠VIP Day
đ Be a part of our growing email list: Co(i)nversations & Community
đđ˝ Connect with me on LinkedIn or Instagram!
đ Leave us a review and a 5-star rating:Â The Profit Scale Podcast
0:00:08 Salutations, friend! Welcome to The Profit Scale podcast, where we help independent Black, Indigenous, and People of Color (BIPOC) entrepreneurs earn at their highest levels by learning how to secure corporate contracts.
Iâm your host, Ruth-Joy Connell, your Corporate Consultant and Sales Enablement Expert. Iâm on a mission to equip you with the systems and strategies youâll need to build a business of generational impact and income.
Around here, we bring culture and coins together â providing all the learning, community and support youâll need as you scale your business. If youâre ready to step into your next level of income and impact, then you, my friend, are in the right place!Â
Turn up the volume and lean in, âcause weâre about to get started!
0:00:58 As usual, I am so excited for our conversation today. For some of you who have been around for a while, today's topic is one that you've heard me speak about before. Pay attention because I'm diving deeper into it than I usually do.Â
Today's episode is an audio masterclass on pricing. In the last episode, I shared three strategies to help you attract high-value, high-paying clients. At the core of that discussion was a deep thorough understanding of the problems and challenges your target clients are facing and your ability to communicate well around them. Those strategies formed the foundation for successfully attracting selling to and serving corporate clients. Today, weâre going to build even further on them by assessing how pricing your services are when attracting a high-value client.
Often, when we speak about pricing, we jump right into the numbers. More often than not, we're trying to figure out how to charge more for our services. You know me. Our motto around here is âNo coin left behind.âÂ
I'm all about helping you serve and earn at your highest level. Yet, before we can start calculating numbers, we have to first understand the intangible factors behind them. Chances are that at one point or another you've asked yourself the ultimate question, âHow do I price my services?â
If you're like me, you've also probably noticed that there isn't one way to answer this question. Some business owners make up their pricing as they go, some rely on their gut, some use pricing in similar businesses as a benchmark for how to set their pricing, and others will take however much their client is willing to pay â and that's okay. We're all at different stages. However, pricing is a difficult topic to navigate because there are so many factors to consider, all of which vary drastically from business to business.
That's why I created the Pillars of Pricing⢠framework â to help standardize the key factors that affect your pricing, while still accounting for the differences in each business so that your pricing is unique to you. The framework we're about to discuss will help you account for both the tangible and the intangible factors that influence the prices you charge. It's designed to broaden your perspective around pricing beyond just the dollar amount and to truly understand the value your services bring to the table. That way, you can better articulate it.Â
In today's conversation, I'm going to walk you through the framework that we use to create pricing strategies for our clients. It's this same framework that helps them command $10,000, $20,000 and $50,000 plus contracts.
It's simple but powerful, so I encourage you to take notes and to download and save this episode, so you can come back to it time and time again.Â
Let's jump in.Â
0:03:58 This is an in-depth representation of your target clients problems, challenges or goals. This can be a customer or client profile if you sell to consumers or a company profile if you sell to other businesses or corporations and organizations. The reason we start with this pillar is to first identify the problem, so that we can accurately assign value to it.Â
Remember, in the last episode, Episode 27, we defined a high-value problem as one that when unresolved will have a direct negative effect on the company's ability to meet its goals. Creating a profile is the step of identifying exactly what that negative effect is, how your prospects are experiencing it, and quantifying its impact on your prospectâs business.
A high-value problem is expensive for companies they are often willing to invest at a high level to resolve it. This is why the profile is the first pillar. It's also why it's so intricately tied to your pricing.
While the profile is centered around the problems and challenges of your prospects, it's about more than simply stating the problem. The intention behind it is to give you a way to speak to your prospects from their perspective. This is important not just for you, but for any members of your team as well.Â
As simple as identifying the problem may seem, this is something that we don't take the time to do. It often reflects in our inability to communicate the value of our services when the time comes.Â
How do you create a profile? I recommend doing some research and refining it through first-hand experience. This means pairing your research and facts with lived experience. Pairing the research and facts that you find online with the lived experience of having worked with clients takes your messaging to a whole new level. When done right, that messaging will both qualify and convert prospects before your conversation with them even begins. At that point, discussing pricing won't be a problem. This, my friend, is pillar one profile.
0:06:14 Let's move on to pillar two.
Before I define this pillar, I want to do an exercise with you that I believe will help you understand what I mean when I say positioning. You don't have to physically do much, but I do want you to say your answers out loud. Since we're doing this conversation, virtually, I can't see or hear you. I'm just going to have to trust that you're participating, so don't leave me hanging.Â
All right. I want you to think of a fast-food restaurant that you would go to for a cheap meal. By cheap, I mean, inexpensive. If you want an inexpensive meal, something quick, think of a fast-food restaurant and say your answer out loud.Â
Next, I want you to think about a luxury vacation destination, either a city or country will do, either is fine. Take a second to think about it. Then again, say your answer out loud.Â
Lastly, I want you to think about an affordable brand of car. Think about something that isn't cheap in quality per se, but it's not going to break the bank either. This is our last one. When you're ready, say your answer out loud.Â
Now, I trust you participated. To lead by example, these are my answers. For a fast-food restaurant that I would go to for a cheap, inexpensive meal, my answer is McDonald's. For a luxury vacation destination, my answer is the Maldives. For an affordable brand of car, my answer is Honda.Â
Here's why this exercise is important. For each question, you had an answer, which means that company or maybe even country has successfully positioned themselves in a way that brings them to mind when I ask you these questions.Â
Positioning is all about establishing your business in the mind of your customers and clients.
In other words, influencing the way that prospects think about your business. That's what positioning is. To do this successfully, you first have to decide how and what you want your prospects to think about your business. That's where the concept of prestige comes into play.Â
Prestige is this concept that I created to define a prospects expectations of their experience with your brand. By experience, I mean more than just the customer service. I'm talking about from the moment they begin interacting with you to the moment they finish working with you, the experience they have all the way through from start to finish.
0:08:50 I like to use the analogy of Walmart, a Target and a Nordstrom to demonstrate the concept of prestige.Â
Walmart is all about rollbacks and giving their customers the lowest price. They price-match. They have a guarantee that if you find a lower price, they'll match it. Everything about their company is designed to position them as inexpensive in the minds of their target customers.
In a Walmart, you'll find tons of self-serve checkouts. It's also hard to find staff to help you. They usually have price-check machines all throughout the store, so you can check the price yourself, etc.
You'll notice that the experience at a Walmart is very Do-It-Yourself (DIY). That's intentional and by design. They also target a very wide audience and that fits their business model. As long as you have a few dollars, you fit into their definition of their target audience. Positioning themselves in this way hasn't made Walmart any less successful despite the fact that their business model is to charge as little as possible. In fact, it's helped them become as successful as they are because they've been so clear and so consistent in their positioning.
0:10:05 Now let's contrast the other two, Target and Nordstrom. A Target or Tarjay, if you want to pronounce it correctly, is one step above a Walmart. Things are slightly more expensive, but you're also not going to break the bank on any one item in a Target per se.Â
You'll notice the stores are a little cleaner and the staff are more available. It's the perfect in-between for the person who wants the nice things, but within a reasonable budget. Target's audience is slightly more narrow than Walmart. You know you're going to spend a little bit more, so customers who shop there inherently have a little more to spend.
0:10:46 Whereas for Nordstrom, you know when you walk into that store, a couple of hundred dollars have immediately left your bank account. They're gone from the moment you step in. We, as customers, expect that going in. Think about it.Â
If you saw Walmart trying to sell a $20,000 couch, you would probably be laughing because ain't nobody buying a $20,000 couch from Walmart. That's just not where you go when you think of furniture of that caliber.
If you saw a $20,000 couch in a Nordstrom, you wouldn't think twice about it. In your mind, it would likely fit because it makes sense for the store. That's all about positioning. It's their influence on the way you perceive their brand and the expectations you have of their brand simply by how they show up.Â
Nordstrom makes very strategic decisions like only putting their stores in high-end malls, or positioning their stores to be viewable from the freeways and streets, and they have customer representatives at each department, so help is never far. Their stores are always well kept, and so much more.Â
The point that I want to drive home here is that this is another example of clear consistent positioning, and how it can influence your prospects' expectations and their experience with you, including their expectations of your pricing.
When you are clear and consistent with your positioning, it does some of the pre-work for you to set the expectations of not only the value you deliver for your client, but also the price points you charge as a result.Â
The positioning and prestige are about deciding whether you want to be at the Walmart, the Target, or the Nordstrom of your market, and aligning your prices and your processes to support that. I do want to stress again that positioning your business as a Walmart won't make you any less successful than a Nordstrom, but it will affect the type of clients you target and attract.Â
Corporations are in the business of hiring Nordstrom-positioned businesses because they want the confidence, the expertise and experience, and the value that accompanies it. That's something for you to consider as you work through this and find the right positioning that works for your business.Â
All right, let's move on to the next pillar.
0:13:11 Hey, friend! Let's have a heart-to-heart for a moment.Â
If there's one thing I know about you, it's that you started this business to create financial freedom for yourself, generational wealth for your family, and to leave a lasting legacy through your work. You are putting in too much work to under-sell your services, especially in a world that is already set up for entrepreneurs of color to earn less than their white counterparts for the same services.Â
I've seen too many of my fellow entrepreneurs miss out on thousands of dollars, simply because they didn't believe they could ask for more and receive it. This is what I call leaving coins on the table. That is why I am so passionate about helping you approach your pricing strategically, so you can earn at your highest level. The kind of impact that you want to have requires you to have the revenue and the profit to support it.Â
You might be asking, "RJ, how exactly am I going to do that?" Well, I want to invite you to apply to work with me through our Priced for Profit⢠VIP Day. This is where we create a custom pricing strategy for your unique business.Â
Knowing how to calculate profitable pricing for any opportunity, regardless of the size will allow you to confidently enter boardrooms with confidence and to leave with coins. You know our motto around here is "No coin left behind." Go ahead and click the link in our show notes to apply for your VIP day. Let's position you for profit.Â
All right. Back to the episode.
0:14:50 It's also referred to as your Unique Value Proposition (UVP), but they're the same thing, just slightly different wording. Your proposition represents factors that distinguish you from your peers and competitors in your market. Over the years and through working with many clients, I've found that your proposition can be narrowed down to one of three categories, either process, results or experience.Â
Let's break each one of them down a little further.
0:15:18 A process-based proposition means the process you use to achieve your result is different and unique from your competition. This means the process you take your clients through is directly tied to the outcomes.
0:15:33 A results-based proposition means that the results you deliver are unique, uncommon or difficult to achieve. Now, a results-based proposition is a little bit harder to identify especially as a service provider. It's hard to guarantee results because as a service provider, our outcomes are often tied to a joint partnership with our clients.Â
This means that both parties can affect the outcome. A results-based proposition is a little bit more rare but still possible. If your proposition falls into this category, it means it must be measurable and quantifiable.Â
0:16:10 Lastly, an experience-based proposition. This category means that every aspect of your client experience has to be anticipated and curated. From onboarding to client communication to client support, you've curated each aspect of your clientâs experience with you to make it memorable, unique and exceptional.Â
Each one of these areas, processes, results and experience are overarching categories that your proposition can fall into. The specifics of what your proposition looks like will be unique to your business.
Here's why this is important for your pricing. Taking the time to identify your proposition helps you to answer this important question, "Why should prospects choose your solution over another company's?" Even if you never hear those exact words leave a prospect's mouth, it is always a question that they are asking.Â
At any given time, there are tons of competitors that can offer your prospects the same outcome as you. Preemptively addressing what makes you different helps you attract the right prospects from the beginning, ones who align with your proposition and are willing to pay for it.
0:17:30 Now, this is where we break out the calculator. Profit margins represent how much money is left over after all your expenses and costs are paid. There are gross profit margins and net profit margins.Â
For the purpose of this discussion today, we're just going to focus on the overall. This pillar helps to make sure that for every sale and every client, the revenue you generate is helping you to do more than break even, but have some money left over.
Profit is what allows you to reinvest back into your business to increase your salary, hire support, or do so much more. Most importantly to me, profit is an essential tool for creating generational wealth. That, after all, is our vision and the heart of everything that we do here at RJCC.
Establishing your profit margins requires understanding the expenses that are associated with running your business in the day-to-day. Equally important is understanding the amount of time required to deliver your services.
Quantifying your delivery time helps you better understand the commitment required on your part, so that you can factor it into your pricing. This doesn't mean you're going to be charging by the hour, but it is one of the considerations for setting your price points.Â
Other factors that are also going to affect the profit margins that you add to your pricing include the impact of the outcome on your client's business, your baseline monthly expenses, the position and prestige of your clientâs business, and so much more.Â
As a rule of thumb, I always recommend having at least a 30% profit margin within your pricing. That number may be easier or harder for you to achieve based on your business model, the size of your team, and who your target clients are.
When you do get to that 30% profit margin, it is a huge step in positioning your business to scale and not just grow. That puts you on track to thrive in your business and not just survive.
0:19:36 All right, friend. Let's recap our conversation today and talk about how we can convert this conversation to coins.Â
Building on our previous conversation from Episode 27, we looked at our unique framework to help you understand the foundational components of pricing your services in a way that's both profitable and sustainable.Â
Using our Pillars of Pricing⢠framework, I walked you through what each one of those pillars were and how it applies to and affects your pricing. The nature of this framework is such that each pillar builds on the previous one, so that together they form a solid foundation, creating a profitable pricing strategy for your unique business.Â
Even though the pillars are the same for every business, how it applies, and what it looks like for your business is going to look very different than anyone else's.
Let's recap those pillars again.
When all four pillars are in alignment, it creates magnetism in your marketing and sales. It allows you to charge pricing that is in alignment with the value you create and the value your prospects want to experience.Â
As you know, our conversation is never complete without talking about how you can take action on our conversation. Today is no different.Â
With that said your action item for today is to take our pricing quiz. It is called, "Am I Ready to Charge Five Figures?" It's designed to help you understand what areas may be holding you back from leveling up your pricing or what areas position you perfectly for a price increase.Â
There are three different categories of results. No matter what category you fall into, you're going to end up with specific feedback on what steps to take to help you align your pillars and increase your prices.Â
You can find the link to the quiz in the show notes. It's a super simple, very quick quiz, so I encourage you to take it. Even if you're not exactly looking to charge five figures, this is still going to help you level up your pricing to that next level, whatever that next level may look like for you.
0:21:54 If you found today's conversation helpful, and you want to learn more, remember to take our pricing quiz, "Am I Ready to Charge Five Figures?" You can do that by clicking the link in the show notes.Â
In the next episode, I'm going to walk you through the different types of corporate income streams available to you, so you can position your existing services for five-figure contracts. That's why you need to take the quiz this week, so you're prepared for the next episode.Â
There are so many different ways for you to serve corporate clients. I'm positive that there's at least one way that's going to work for you.
To make sure you don't miss it, subscribe to the podcast, so you'll be notified in two weeks when the new episode is released.Â
As always, friend, I'm so grateful that you chose to spend this time with me. My hope is that each episode plays a small part in moving you one step closer to building a business that will have a generational impact.
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On behalf of myself and the team, thank you so much for supporting us in doing so! Thank you for being here. I'll be here, at the same time and in the same place in two weeks. Until then, I wish you coins, confidence, and all the bags! Talk to you soon, friend.