Join Tina Tower on a recording of her LIVE Friday Cocktails and Coaching session. This week, she's talking about pricing your services.
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Hello, I'm Tina Tower and you're listening to her Empire Builder. For my first decade of business I thought grinding and hustling and working harder than everyone else was my path to success. It was pretty successful by a lot of measures, but it led to burnout and adrenal fatigue. Then, when I travelled around the world on my family gap year, I discovered the simplicity and the reach of online business, and I completely fell in love.
You have so much knowledge and expertise that's within and I want to help you to package that so you can also help to lift others up. So, how do you build a thriving million-dollar business based on everything that's in your mind? This is her Empire Builder, the podcast.
Hello, hello, Happy Friday everybody.
Okay, so just before, like, literally 30 seconds before we came on, I was like, “Alright. Do I go on, like, totally normal? Or do I let you in on my day today?”, and a part of why I like doing this, is to be able to kind of let you in on, on the day and let you in on what's going on behind the scenes.
So, at the moment, my palms are sweating like absolute crazy. You know when you're that nervous, that you've kind of got like this hot rush up your whole body. You’re just like, “I don't know. I don't know how I'm going to do this.”
So, what is going on for us at the moment? Hi, Rochelle. Hi, Sarah. So, what's going on for us? We're trying to buy a house. So, we got back from our around the world trip five months ago, actually six months ago now, six months ago, we got back end of April, and we've been trying to buy a house ever since. We've lost a couple of auctions and we, we’ve exchange contracts under cooling off a couple of weeks ago and our cooling off period finished yesterday at 5:00pm, and our finance wasn't approved yet, and so they gave us an extra 24 hours. So, hi, Stacey. So, it finishes today at 5:00pm, and I still have not heard anything back from our finance, and our broker is absolutely incredible. She's been touching base with me kind of every 30 minutes, and I'm trying not to lose hope, but in 60 minutes, I will know whether we have our dream house that we get to grow old in forever, or whether it goes to somebody else, and there's no chance in extending the cooling off because so many other people want the house, that they already have a contract there ready to go unconditional if we don't make it by 5:00pm. So, I'm stressed out is the, is the honest truth.
Behind that I'm trying not to wig out too much and go, “You know what, there is 58 minutes left for our finance to come through and for us to get our dream house, or if it doesn't, obviously it wasn't meant to be and there will be another dream on the horizon.”, but you know how it is when, I don’t know, you just really want something so bad, and so, so yes, I'm sitting here, I've got full sweaty palms. I've got that hot flush feeling. I've got that kind of fuzzy feeling in my stomach where I'm just like, “Come on.”, and, and they’re calling right now. The broker’s calling right now. Okay. You know what? You can either see me cry with happiness or sadness.
“How did we go? They haven't come back. Okay. Yes. Yeah. Okay, are they still likely to come back today? Okay. Okay. Okay. Okay, we have 57 minutes. Thank you. It's awful waiting. It is. Okay. Thank you. I am still waiting. Thanks Val. Thank you. Okay, bye.”
Okay, so that was awkward. There's still nothing back yet, so the drama continues. Oh my gosh. Okay, so we’ve got 57 minutes, so if anybody is religious, pray the, the prayers. We've got 57 minutes until the house is no longer ours and still hoping that the bank comes back with that.
Alright, so I'm going to reframe, refocus, because it's looking like that's not going to work so maybe next week's podcast episode can be on dealing with severe disappointment. Okay, shake it off hey?
Alright, so who have we got on here? We've got Karen, we’ve got Sharon. Hello, hello. Rochelle, Stacey, Sarah. Hi. Hi Bridie. Hello everybody. So yeah, the, the first four minutes of this call has been dedicated to my mood, which I do have my happy mood t-shirt on, but we are trying to buy a house. It is not looking good. We lose it at 5:00pm. So anyway, what's meant to be, will be.
So, I would like to reflect on your week. So, as I said my week has been massive in trying to get this house across in doing, you know when there’s so much on that I can't even remember actually what I've been doing the whole time of the week?
I've been in Sydney a couple of times. We had the UN gala dinner. I was in Sydney at a conference yesterday. So much going on. So, let me know in the chat box, “What has been the highlight of your, of your week, this week? What has been the thing that you're celebrating? What has been the thing that you started off with the intention at the beginning of the week, and you’ve kind of got to now?”, and, you can still hear my voice. I'm still going, I'm still not trying. I'm trying not to think about this bloody house. Focus Tina. See what happens when we have to like, just go, “You know what? Game face. Forget about it.” Life, hey? Oh my gosh.
So, let me know, “What is what is the highlight of yours?” Stacey went to coach at Scale. So that is run by our good friend Dale Beaumont. Stacey and my both, both good friend. So, Dale Beaumont runs a really awesome business education program called Business Blueprint and now he's running something for coaches, as well, and so that's what Stacey went to, I'm assuming in Brisbane. I went to it yesterday in Sydney, which was absolutely awesome.
Now I need to take a sip of my gin, hang on. Oh, so good. My hands are still a little shaky, geez. The pressure, the stress. Oh my god.
Okay, so what I wanted to talk about today was pricing your services because it's a question I get asked quite often, and it's a question that I got asked about three times this week. So, usually when it comes to Cocktails and Coaching, I kind of look at, “What have I been asked most in the last week?”, and that's kind of what forms the topic of the day.
So, when it comes to pricing your services. So, you can either, you can make or break it when it comes to pricing your services. It's a really big deal. If you go too high, you've kind of price yourself out of the market. If you go too low, it looks like it's not, kind of credible, and not worth enough. So, it's really, really important to get this, to get this right.
I'll stop for a second. Sarah’s said work-related, she’s started to map out online course content. Well done. “Personal, finally started our first round of IVF.” Sarah, well done. Gosh, that's a hard thing to go through. I know, a couple of years ago, a friend of mine had had trouble falling pregnant, she kept having miscarriages, and so I donated eggs to her, and so I just had to go through one round of IVF for that, and one round was hell. So, I'm feeling for you there. It's not an easy process. I don't know how women go through it so many times, but I wish you all the very, very best with that.
Mel said “Hi”. Hi Mel, Karen and Helen, “Excited about adding a workshop onto the online course.” Important, when you've got an online presence to also have offline as well and, “Getting closer to the Palm Springs.” Yeah.
So again, anyone that's on here, if you're looking at coming to Palm Springs, we do have an early bird offer at the moment, which is tinatower.com/earlybird, and it finishes next Thursday, so the end of October, 31st of October. So, if you've been thinking about it, get onto that though. The whole five days is $4,995, Australian dollars. So, it's an amazing retreat for that price.
Sarah said, “Yep, know nothing about B2B service pricing.” Okay, so let me get on to pricing. So, when it comes to pricing, there's different strategies with how you can price your service. So, the one that I kind of like the best is working out the value proposition behind it. So, the value and what people are willing to pay. So, you can either kind of go the values pricing, or you can go to cost plus pricing.
So, cost plus pricing, which is the one that I don't normally do for services, so I’ll explain that one first, is going through the process of going, “Okay. What does this cost to deliver?” So, say you're doing a service where it's taking your time, you might go, “Alright, I want to be paid $200 an hour, and then I've got other business costs and that sort of thing that are going to be, kind of, 20% on top of that.” So, then you've got to charge $240 an hour to get your cost pricing right. So that's kind of how that one works. I don't think that's necessarily the best way, because sometimes you could be short-changing yourself with that, so I go more for values-based pricing.
So, if you're doing an online course, or you're doing a product or you're doing anything that's not like, like a physio where they come to see you for an hour, or a business coach where they see you for an hour or something like that, you can do the values based pricing, and that's looking at first your target market, the people that you serve. What would they be willing to pay? So, what is the value there and this greatly depends on the market that you serve.
So, I know when I was in education, obviously you’re really tapped out at what a parent will pay for their child's learning, which is a real shame because it is so freaking vitally important, but it's just not what people value as much with the education as what they do for other things. So, the space I’m in now with business education, the value is so huge because people can make more money out of it. So, if I teach someone something for $1,000, it cost them a thousand and they can then make $10,000 or $100,000 out of that amazing value, but if you're teaching something that people can't then make money out of, it's really hard to, kind of, inflate that value.
So, you want to look at, “What is the value that people can get from implementing the things that you're giving them with services, or what is the value on that?” So, if you're looking at, say, the health sector, and going, “Alright. What can people charge in terms of a nutrition consult, or a PT session, or something like that?” It's what is the price of health, which is a really hard thing to do unless someone is ill. It's amazing when people are sick how much they value health and how much money they spend on health, but when people are well, how little they spend on health. So, it's looking at all of those different things, and taking that into, into account.
Hi, Holly. Hi, Shannon. So, when you're looking at pricing, what I want you to be able to do is go, “Okay. What are, the people that you're serving, what is a reasonable price for them to pay?”, and then how can you 100% look at that with conviction and have an offer, that they would be crazy not to take?
I’ll just get my phone, it’s lighting up, but it’s not the mortgage broker.
So, we always, you want to be giving an offer, that they’re not, that they're crazy if they don't take it. So, you want to be able to say, hand on heart, if the offer that you've created is right for the people that you're serving, there is no better option than being able to do that. Now where it kind of comes unstuck and the conversations that I have had with people this week is on self-worth, and so saying, “I can't charge that amount because am I really worth that?, and so, this is the kind of warning that I want to let you out of, is saying, kind of, along the lines of my worth.
So, you don't want to look at it in terms of self-worth and what you're worth being paid, you want to look at it in terms of the value that you're providing people. So look at your customers, look at your target market, and go, “Okay, if I deliver huge value from the promise that I'm making them and then some, what is the value that I'm giving them there and what is that value worth of the service that I'm providing”, rather than, “What is my value worth?”. Does that make sense, because a lot of the time when I talk to people it's, it's when you're pricing too low, it's usually a self-worth issue. Or usually something in line with, you know, along the lines of restricting yourself because you kind of feel, “Who am I to charge that much?”, which, you know, I’ll admit I had that when I started coaching. I would look at other business coaches and go, “Holy guacamole. Like, they are charging triple what I'm charging. How do they feel like they have the right to do that?”, and then I was talking to a whole group of them, and it's like, “What's the value from that?” So, if you can give something to someone for $1,000, and they’re making $100,000 out of it, of course you deserve that thousand dollars to be able to do that, and you’re giving people tools to be able to rinse and repeat and do that again. So, it then made a $1,000 session, seem so crazy cheap, but, if it's more than that, people won't pay for it. So, that's the thing, you've got to kind of come up with your service model, come up with your value proposition, your promise to people, over deliver on that value, and then test and measure it. So when you put an offer out, if people are kind of really receptive to that, then that's going to be something that people grab at really quick and then you’ve got to not be afraid to, kind of, re-evaluate and change it up.
So, an example of that, that I had. So, when I released the Palm Springs retreat, and I put that out, amazing value in my mind. Of course, everything that you've put out you think is amazing value, but the feedback that I got from people was, “Actually, we really don't want to pay in US dollars.” So, the reason I did it in US dollars was because we've got to pay all the speakers in US dollars, the accommodation, the food, the whole kit and caboodle is all in US dollars. So, I was like, “You know what? It's just easy. Pay it in US dollars, and then we can pay all the bills in US dollars, and it's done.”, but the feedback I was getting from my customers was, most of us are Australian, and we don't want to pay US dollars, and so part of doing the early bird offer was going, “Alright, I will reward that. I see that. I recognise that. That was a mistake that I made on my part, and I will redo the offer and put it out in Australian dollars and then lower it until the 31st of October so that I can then test and measure that, and then, you know, it's the sweet spot because as soon as I did that the uptake just went boom. So then, you know, okay, now I have the value proposition right in my customers minds because that's really what it's all about, and I think sometimes people hold too strong or they’re, if they put something out and it doesn't kind of work you’re too ashamed to change it, or embarrassed to change it, or you don't want to go back on what you've done. So, always be willing to, kind of, change that up there as well, because what you want to do, is to get something that's right for both you and right for your customers as well.
So, Sarah said, “Yeah, imposter syndrome. So, your idea to reframe from yourself to the value they receive.” Yeah. Yeah, you really want to take the focus off you a lot of the time. Always focus on who you serve. I mean, it's the main thing with getting over fear of speaking. It's the main thing with, with everything that you do is, the more you focus on the people you serve, the more value you will bring, and the more, you don't kind of get tongue tied because you're not thinking of you, you're thinking of how you can deliver massive value to them.
Sharon said, “Why don't people want to pay in US dollars? Curious as I'm going to launch a course soon in US dollars.” Yes. So mainly because of the exchange rate, at the moment, I think is the main, is the main point. So, with our courses, so with Laptop Life for example, we've got an option to pay in US and an option to pay in Australian dollars. Often, it's like, sometimes it can flick as which one is actually cheaper than the other, but people will generally go for what their currency is without even checking it. So, it's just that fear around currency conversion and what's going to happen, and the fees involved and all of that sort of thing. What I find is Australians, a lot of Australians are very used to paying in US dollars for a lot of things. US customers won't pay in Australian dollars because US are used to doing everything in US. So, that's kind of been my experience so far on that.
Sarah said, “Probably fees and not a great exchange rate.”, exactly what I said. You’re dead on there Sarah. That's it.
Okay, so that's kind of pricing your services. So, does anyone have any questions around pricing services, or a scenario or trouble that you've had with that, that you want to kind of run by me and get, get any feedback on the price of your service. Whether it's too high, whether it's too low? I missed Bridie’s comment there, her highlight of the week was, “Work, a huge week of networking and got decodable readers.” I love that that’s the highlight. Bridie is an educational wiz. So yes, $4,000 worth of decodable readers is a very exciting thing in the teaching world, “And finally have my ideas for online course contents down.” That's fantastic. Well done. So good.
Alright. So, I've had no questions come through for pricing services. So, I'm going to open it up to you. What open questions do you have in business? So, think about what you've been going through this week? What sort of things you've kind of got to and gone, “Alright, where am I going to go from here? What, you know, anything that's kind of sticking in the back of your mind? Let's get it out. Let's get some opinions cranking. Let's see how we go.
Ask away. What have we got?
I'm going to take a sip of my drink while you're typing. Still nothing through from my mortgage broker, 40 minutes left. Oh my gosh, I'm sweating. I’m sweating.
Okay. Rochelle has said, “Our private fee’s lower than our NDIS funded fee. Should they be the same?” Yeah, I think so, because I mean, you're doing your private fee less because people are having to pay out of pocket, but for you, you're delivering the exact same service, so you should be paid the same amount regardless of how people are getting funded. If they're getting NDIS, that really should be their bonus, not your bonus. You should be getting paid the same for your services because it's really, you’re delivering the same thing as well. So, yeah, I think yes, I think yes.
Okay, so Sarah has said, “I'm selling courses and workshops to a business, international study agents, on a monthly annual basis. How do I explore how much they will pay? The type of service I have doesn't exist yet.” So, there's probably something similar in the market, or if there's not something similar in the market somewhere, looking at not something similar, but something that your similar target market also invests in. So, that you can see kind of the type of level that they invest in. So, one of the things that I learned at the conference with Dale yesterday, was, you know, small businesses, so solopreneurs, are usually likely to spend, you know, one to $5,000 a year on education. Small to medium business, it's like five to $50,000 a year on business education. Corporates, anywhere from $500,000 to 5 million a year, depending on the size. So, if you look at your target market and how much they have to invest, generally in that area of education and upskilling, then working out, “Okay, what's going to be worth it.”, and then I'd say when you start, test and measure. So, create your offer in what you think is an irresistible offer. What you think is just, you know, you providing massive value, you're going to get a great transformation, you're going to get great results, and you can 100% stand by that, and then see how those results come out and then see how big the uptake is, and it's kind of like, if you launch and there's crickets, then first look at your marketing, look at your messaging, and then have a play with that pricing. So, are you offering payment plans? Or is it too high? Or is there something wrong with the actual offer itself in terms of what you're including? So, it's really all an experimentation. So, don't be afraid to kind of play with that until you get it right.
So, Bridie said, “So for an informative educational course, how much would you look at pricing this?” So, it depends on who's buying it. So, if it's the school buying it, or if it's the parent buying it, it’s going to be a really different value proposition there. The thing is when people are looking at education, if it's children's education, they’re not going to pay as much which means you need to go for massive value, ah, massive, sorry, massive volume for that. So, you really just need to look at how much money do you need to earn to make the business viable and to make the business fantastic, and then how many of those units would you have to sell to do that, and then working out what that price is.
So, sometimes it's easier to have a higher price and sell to less people, but you also don't want to price people out of the market as well. I always like to go for quality over quantity, but it very much depends on your model. So, say for an educational course for parents, if they're going to pay like, $99 or whatever it is for it, you're going to need lots of those. So, your approach is going to be really different than someone who's selling a $2,000 course or a $5,000 course. So, the touch points are going to be less but the marketing and the volumes going to be a whole lot higher.
So, Stacey has said, “We've sold 167 entries to our health challenge. Our target is 300.” Well done. “We have six days left. What's your experience with people buying in the last 24 hours?” So, usually I find I get about 30%. So, if I'm opening an online course, about 30% on the first day, 20% trickle in over the time, and then 50% on the last day. So that's looking good for your numbers, but you can't let up on the marketing. So, as much as you feel like when you're in launch, that you're just kind of hammering people so much, people have lives. So, they'll forget they see it, but they don't really take notice. So, do lots of different messages on lots of different channels. So, that that kind of message is going to be perfect for someone there, and don't stop until that final buzzer rings, because, yeah, you're likely to get another 50% on that last day if you're marketing it really well, which I've seen your ads coming up and you are marketing that beautifully. The only thing I'd put into your ads, because I have seen your ads come up, is video. So, I've seen a couple but do some, do some lives. Do some video in there would be great.
Sharon's got “I'm branching out to a fun, seven-day perfect hair for busy women course ran by a hairdresser. Would you guys pay $29 for this?” So, go to Sharon's comment there and let her know what you'd pay. I think so. I think it sounds good. Yeah, and if you're doing US and you're going worldwide, then absolutely, you just need to go massive, massive volume for that, but $29 is a great price point to sell from a Facebook ad. So, you don't have to really form the relationships with people for that cheaper product, which has its benefits there as well.
Okay, yep Sarah said, “Test and measure.” Shannon said, “My pricing idea for my course was around $30. Similar to the price of a self-help book for bereaved parents. So, I guess I'll be going for volume.” Yes, so you need a lot there. It depends on the level. So, if you've got something where there's absolutely no personal input from you, then going cheap is okay because then really your only job is marketing, but if you've got something where you're going to be giving people calls or where you're going to be jumping on a Facebook group and responding to people's comments, or whether you're going to be doing lives or calls with people, then you have to price that accordingly. Otherwise, you're, you're losing money and time. So, don't fall into that trap.
Okay, so Sarah said, “I think the US would be fine for low price like the $29. For Tina's retreat, the fees would be much higher. So more prohibitive.” Yep. So, Sarah, jump on the Palm Springs while it's in Australian dollars. Come on, let's do it.
Laura’s there. Hi, Laura. Stacey said, “We aren't stopping and absolutely go $27. Seven is the magic number.” Yes. So that's another thing too. It's something that whenever I test it and learn about it, I'm always kind of half disgraced in going, “Oh my gosh, like, do we really do this?” You know, the whole $199 or $197, or a car for 29, 99. It's always, it does always work. So, if you do something for, say $30 or $29, the psychological difference in that is quite significant. So, you're better to go if you're going to go 20, if you're going to go $30, you’re better to go like, 32, 33, 34, than to go 30, because in people's minds, it's the same. So, if you're going to go 29 stick at the 29. If you're going to go 30 or over, go like that $5 jump up, because yes, sevens and nines seem to work really well for people with sales. It's weird, but it always, always works. I have tried it the other way because it does frustrate me, so I tried like, one of our courses, the Laptop Life courses, is $997. I did it for a few days at 1,000 and barely anything. So, it's, it's weird, but you think about it and you go, “Okay, a course for 997 or a $1,000. It does sound very, very different. So yeah, it's really funny trying to, trying to work that out.
Alright, so it looks like that is all of our questions, which is fantastic. Now I'd like everyone to take a moment to, you've reflected on the week that's been, I want you to plan the week that's ahead. Take that conscious time to really look at, “Okay, what have you got coming up? What is the intention for that week next week? What are the non-negotiables that you really want to have done?”, and then what I want you to do is take a few minutes to block that out in your calendar because as we know, when we're in the week and we're in the mud of everything, everything comes up and it's really hard to not get distracted. So, if you've scheduled that in there, keep that promise to yourself, keep that commitment and actually make that happen.
Okay, Tegan’s on. “I'd love some thoughts and feedback. How you decide your online course duration? How do you arrive at being an X week or X months? I'm aware that the content will largely determine this answer, however, just after your take.” Yep, okay. Okay, so online course duration, expect six months. So, it's all, it, I would do it for your audience. So, what you're trying to do is when you create an online course, you're creating a program that promises a transformation. So, you're promising that someone's going to get from point A, over here to point B, by taking your course, and you're going to make it quick, simple and easy for them to bridge that, which is what they're paying you for, is the shortcut to the transformation that they want. So, I always look at it like that, and then what's going to suit that audience best? So, some courses you'll see are 12-month courses, and if they're meaty and they're involved, and people have to go kind of all in and that 12 months works really well. If you're going a low price point that's kind of an entry course, then having like a six week course, so I think a four to six week course, is a great first course, but then you, timings all in the eye of the beholder as well. So, for our, I’ll use Laptop Life as an example, so for a Laptop Life, we call it an eight-week course. Now we call it an eight-week course, because it has eight modules, but, for that eight-week course, we give 12 months access, and I don't drip that course. So, with some courses, you know, if you go eight weeks, you will drip one module, say every Monday for that eight weeks. I don't do that because my audience is business people, and so for business people, they don't like to be kind of staged and managed through. A lot of, a lot of my clients, so like, when they buy the course, they might not get into it for a month or two, but then they'll have a free day or for a couple of days, and I'll just smash it out. So, they want to have the freedom to be able to do that. Now I call it an eight-week course because it's kind of, it's the perfect delivery to do one bit for eight weeks, but it's rarely how it happens, and then I give access for 12 months. So, some could say it's a 12-month course that people can take their time in, or an eight-week course. So, it's really just deciding on what works best for your audience and packaging it that way and using the language. So, I'll use Dr. Libby as an example. So, Dr. Libby is a fantastic biochemist. She does a weight loss for women course. One of the most popular online courses in Australia for obvious reasons, and so, she does that course, and it's a nine-week course that she gives access to for 12 weeks. So, what happens after that nine weeks, she drips the modules, one week for nine weeks, and then at the end of the 12 weeks, you lose the access to that. So then, what happens is a lot of people that have done that course haven't got through it in time, and so when she does the next launch, the week later, they rebuy the course, which is incredible. So, it's all just really looking at what's going to work best for your audience and then, then going for that, so I hope that, that helps.
Hi, Carla. Hi Kylie. Alrighty, that brings us to the end. Stacey. Thank you. She said Good luck with the house. You know what? I will let you know but it's not looking good at all. There's 30 minutes left, and I can see a text message has come through from the broker saying, “Still nothing. If we haven't heard in 15 minutes, we're going to have to call it.” So anyway, hopefully next podcast I'll let you know how to deal with severe disappointment, but, have the most fabulous weekend, and I hope all of those dreams come through. Rochelle said, “Yep. Let us know how you go.” I will definitely let you know how to go, how I go. In half an hour I will either be drinking more celebratory cocktails or commiseration ones. We will see. Happy weekend everybody. Bye.
Thank you for listening to this episode of her Empire Builder. If you loved it, please share it on Instagram and Facebook for your friends, and if you really want to deliver me smiles, you can pop a review on iTunes. I'd love to hear from you, so if you have any questions, email me at [email protected], and if you want to know more about what we do, head over to tinatower.com. Now I truly hope this podcast gives you so much value and you can use it to dream big, plan well and take massive action in building your very own empire that’s perfect just for you.