A common hand-wringing moment for new entrepreneurs is when they need to decide how much to charge for their services or information.
They worry that if its priced no one will buy, and if its too low it will be an indication of their low self-worth.
I just ordered the full complement of books from Direct Marketing Expert, Dan Kennedy this morning from Amazon. He is undoubtedly one of the best in the business when it comes to making the cash machine ring (or whatever they do these days).
If you have ever read any of his stuff, you will know he always insists that you raise your prices and not sell your services too cheaply. People pay Dan over £10,000 for a tiny amount of time with him, and often over £100,000 for actual campaigns written by Dan.
So how much did I pay to access his world class information? Between £7.99 and £11.99 for each of his books. A whopping total of £90.17 for 9 books crammed full of experience. Why so cheap?
Well for Dan, he knows that he has already done the work on the book and it can now be sold a kakagillion times and he won’t have to do any more work.
He also knows that if I like the books, I may sign up for his free newsletter. After that I may join one of his GKIC Insiders circle webinars. If I get enough value and implement his stuff, then I may pay for higher levels of membership, support & networking. See how that works? (For transparency … I do subscribe to Dan’s materials, and found him the way I’m describing to you!)
This all fits in to a Lifetime value model. Do you have one?
How can you go from free, low cost, mid cost and ultimately to large fees?
In Snowflake’s business it looks a little like this in one of our business strands
- Facebook Edgerank Score: Free
- Full Review of 21 categories Facebook uses to score your fan page including recommendations: £9.95
- On demand help-desk for small business social media: £99 per month
- Creation & Implementation of strategy & content for your social media: £499 per month
- Speaking at your conference or organisation: Free – £5,000
- 1 day one-on-one coaching: £1,000-£5,000 per day
- Ongoing one-on-one coaching: £2,000 – £5,000 per month
Why such a dramatic difference in fees, even within the same category? Well it depends on a few factors.
- How busy am I?
- How passionate I am about the cause?
- Will it be fun?
I deliver the same training for free to some of our charity partners because I love what they are trying to do and feel passionate about the outcomes they are looking to achieve.
So take a clean sheet of paper and map out how you can create a tiered structure to your offering. Believe me, this can work in retail, professional services, even artists.
If you want to discuss how we can help your business, just contact us today for a free consultation.
Until next time