This is a guest post by Laura Roeder and is a part of the Do No Financial Harm discussion.
A recent poll of people subscribed to my list revealed that a full 30% have generated zero dollars of revenue in their business, or don’t have a business yet.
In the same survey, we asked what we can do to improve, and what had stopped the person from making a purchase. We heard the same answer over and over again – you need to lower prices, your prices are too high.
My business sells social media training programs starting at $97 on the low end, with $991 at the high-end. I also occasionally do in-person consulting sessions for $5k/day.
Whether these prices are high or low is a matter of perspective – I personally feel that $100-$1,000 is a reasonable investment for training materials for a small business, and that’s why my programs have been priced accordingly.
However – we heard from many people that $97 is out of reach. That they need payment plans, that we are priced to high and inaccessible.
I have a different opinion.
I believe that if $97 is out of your reach, social media marketing is not where you should be spending your time and money. That shows me that you haven’t yet mastered the basics of what a business is – offering a product or service that people pay money for.
The programs my company offers are priced appropriately to rule out some people who would not yet be able to value from them. Of course there are still people who aren’t ready for the programs or just plain don’t watch them or don’t implement them. The same way that I buy books and let them linger on the bookshelf, or buy clothes that I never wear.
You can’t control people’s behavior, but you can guide it.
We don’t offer payment plans for my higher-end program, Creating Fame. The last time we held the class there was a $591 level and a $991 level, with no payment plans available for either.
Many, many people asked for payment plans. Many people told us that they would have bought the program had a payment plan been available, but the price ruled them out.
This was by design. Even more so than my other programs, Creating Fame is explicitly and clearly only for those who have an established business. You will not see results from the program if you don’t have a business to apply the strategies in.
So if you are not yet at a point where your business generated $591, you probably won’t get the full value from Creating Fame. It’s a way for me to put a little check and balance in place with the pricing.
When we think of “do no harm” I think the conversation often goes to lowering prices – but it’s not always about lowering prices. It’s about appropriate pricing. Pricing that is in alignment with the value of an offering, and in alignment with how it is marketed.
But this choice disappoints people – my choice disappoints the 30% of my audience that hasn’t started their business yet. You could say I’m letting these people down. That I’m not listening to what people want, or meeting their needs.
An important part of your business is choosing who you want to serve, and we can’t serve everyone. Making a clear decision on who your market is, and consciously creating pricing that’s appropriate for that market is essential to doing no financial harm.
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Laura Roeder, founder of LKR, is a social media marketing expert who teaches small businesses how to create their own fame and claim their brand online. To learn more visit LauraRoeder.com or Facebook.com/GetTheDash.
“When we think of “do no harm” I think the conversation often goes to lowering prices – but it’s not always about lowering prices. …
“But this choice disappoints people – my choice disappoints the 30% of my audience that hasn’t started their business yet… ”
~ Ahh. Indeed, it does. But (and it’s a biggie) – that 30% may be part of your *audience*, but that doesn’t *automatically* make them part of your target market for that particular product.
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Also “…appropriate pricing. Pricing that is … in alignment with how it is marketed.”
~ If it feels like ‘far too much’ of my audience wants me to lower prices on a high-end, high-powered product, I’d also get an outside, objective look (by a professional copywriter, even?) at the copy I’m using to promote it – there may be not enough “self-pre-qualifying” happening through the words and language of the invitation or sales page(s), or that it’s really too inclusive.
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Good points all, Laura. Thank you.
Karen J recently posted Values
I see lowering prices to win business as a last resort option. Lowering prices should only be necessary when the product or service being offered is a commodity. A win-win scenario needs to be achieved whereby the buyer receives a valuable product or service at a fair market price and the seller makes an acceptable level of profit. This will ensure a good buyer-seller relationship is created and maintained.
Andrew Bycroft recently posted You need to be a salesperson; like it or not
Andrew I resonate with your views about business leads. keeping happy clients in your backup help you a lot in improvements. newfulcrumpoint blog End to End IT Solutions
Hi Laura -
I was actually quite surprised to see you post on this blog. I’m in the process of starting up a business so yes the price of your programs does not fit my budget. Unfortunately, a number of times over the summer 2011 I tried connecting with you on Twitter and received no response from you.
At this point I would have been a potential client but it really showed me a complete lack of understanding how social media works when it seems you had ruled me out as someone without a business from the start.
So would you expect potential clients to invest into a program with someone who ignored them before they had a real business.
I hope you understand that I am not trying to be competitive. In fact I would like to recommend you to my future clients – once my business grows much bigger. But how can I make recommendations to someone who has already ruled me out of her target market? I honestly don’t know where the heart is in that.
Jessica recently posted ESCAPING GOTHAM: An Enigma ~ ACT 1
Hey Jessica – I wish twitter had an “away message” option – I’m not always checking twitter every day, and sometimes like this month I’m off social media for weeks at a time. Unfortunately there’s no way for you to know this, so it feels like I’m ignoring you when really I’m just not on twitter.
Laura Roeder recently posted 10 Tips For Success As A Solopreneur
That is unfortunate because as a business owner I always ‘test’ how well I will work together with someone based on the communication I have with them from the beginning. Somehow I am always able to reply to messages I receive on twitter and I’d be sure to have an employee takeover this part of the job when I was away once I am charging a lot for my services.
While I don’t like pointing the finger, wouldn’t it be beneficial to at least keep up your own social media relations with your potential clients if that is in fact the service offerings you are obviously unwilling to lower your price on?
To me it seems very unprofessional and I don’t think that we’d work well together at this point. Oh well, se la vie.
ps – thanks for finally responding to me.
Jessica recently posted ESCAPING GOTHAM: An Enigma ~ ACT 1
Laura: Your candid and directness and heart centered biz is always so refreshing, and it is so good to see you sharing that same transparency here on a blog that I wouldn’t necessarily “expect” to see you guest posting. I totally love seeing your business as a model for my own business…. Thank you for your example. I guess that I was your “ideal & classic case” I didn’t really realize it till now. Even though I still didn’t have a business, I knew that I needed knowledge. First, I bought backstage pass to Twitter, then Zero to Site, and then after I launched my biz, I signed up for Creating Fame. It was the intuitive thing to do, Anyhow, now as I create products and services for my own biz, my pricing structure is key. Thanks for the reminder/heads up that some of my fans may not be down with all of my pricing decisions. And that is okay!
Hahaha, I’ve heard people complain that $10 or $20 is too much money. I learned quite early in my business not to listen to money excuses because they are just that: EXCUSES. There is not a person on this planet who has a computer and internet access who “can’t afford” a $100 product. And as long as anyone buys into their “can’t afford” excuse, they will not move forward.
So I’m very blunt about it. I have written articles explaining in detail how we know it’s not really “about the money.” The person has all kinds of subconscious fears and resistance that have absolutely NOTHING to do with money. Fear of failure, fear of success, fear of being seen, etc etc etc. Money is a cover-up not the real reason.
People are often shocked when I call them on it outright, but I’ve also been thanked many times for being so blunt, because some people are actually ready to take an honest look at their money excuses and see them for what they are: BS. Glad you’re not lowering your prices.
Hmm. Affording $100 is one thing but being willing to pay $1k on something you could figure out for free is another.
I encourage people to look at the value they are receiving rather than the amount of money they are spending. If you “figure it out by yourself” and “save” $1000 but missed out on the $10,000 of value that you would have got by making the connection with this coach, then did you win by not spending the money? Nope. And if it takes you three months to figure something out, where a coach could have helped you figure it out in one day, and all that time you could have been making five times as much money by figuring it out sooner, did you win by not spending the money? Nope. I find that what I invest in healers and coaches always comes back to me multiplied. So I don’t focus on “saving” money. Coupon clipping for example is a huge waste of bandwidth. I focus on manifesting more money, and this has served me very well.
It has served me very well to focus on building relationships with the tools. Yes I could’ve spent the money and to have it magically manifest for me. But my goal is to build relationships and I have done a darn good job at it not by paying for some one to tell me their way of ‘networking’ but by just putting myself out there.
You really can’t judge your success based on how much money you invested into social media training.
It all goes back to relationship building – not chasing cash. That’s what the heart of buisness is – serving the people around you. And I’ll say it again…. why would I give more than 2 cents to someone who will NOT RESPOND to me on twitter.
It shows me that the person person with the big bucks does not respect me because I’m merely just starting out.
This is the last penny I’m sharing on here. Its really valuable. Money can’t save you when you’ve broken relationships with your potential customers.
As for me I will go on to building a biz that will last beyond 2012. Fame or not – I’m doing it anyway. I have brains in my head and I’m gonna use ‘em!
Or it might show that the person you’re talking about doesn’t have their Twitter notifications turned on and has no idea that you Tweeted them. Or that the persona in question is so tired of receiving dozens of messages every day from people who are trying to “get” for free and not give anything back that the person has decided to focus their attention on clients and customers who are willing to show some respect by contributing. A different perspective, I know, but one that has been very successful for me, especially in the area of building satisfying win/win relationships with my clients and customers. It was one of the best business decisions I ever made, to no longer give my attention to takers and focus on those willing to commit and give back. I understand some people may be “triggered” by this but the “take take take” and “let me try to get everything for free” strategy backfires in the end.
Let’s say, Jessica, that I’m the person you Tweeted. Busy coach, very successful business. Person has already maybe 50-60 solid clients and customers, and a dozen of them emailed her today asking for help. She also received a bunch of messages from people who clearly have no intention of giving back. She’s got a very busy schedule, a lot of irons in the fire, and is doing her best to prioritize her time to help herself and the maximum number of other people. She reads your posts here, where you’ve made it clear you’re only interested in taking and not giving anything back. Do you think she puts you at the top of a very long priority list? And can you blame her for not responding, when you’ve made it so clear that you have absolutely no intention of ever contributing anything?