Your customers' ROI
How do you set your prices?
This week, I'm trying a new thing:
A week-long email course on setting prices using a simple framework.
(Or a week-plus if we skip a day or two as often happens here...🙃)
For those just tuning in, here's my Simple Pricing Strategy framework that I use for my clients:
Set your floor with your costs
Set your ceiling with your customer’s ROI
Set your expectations with the market
Set your bill frequency with your conversion and churn rate
Today, let's dig into #2 - Set your ceiling with your customer’s ROI
This one all comes down to value.
You need to figure out
What the value of hiring you is for your customers or clients.
If you figure this out
And you charge 10-20% of that,
Then you should be a no-brainer purchase.
But how do you figure out what your value is to your clients or customers?
Start by asking:
What's the impact I will have on them or their business?
Will you save them the risk of being audited?
> Go research the average expense of being audited!
Will you help them win 10 more customers?
> Estimate their average contract value, then multiply by 10 - that's your value!
Will you bring them peace of mind and relief from stress?
> This can be tougher to estimate, but start by thinking about:
The cost of their lost time worrying
The negative impact on their business from not making clear-headed decisions
The last time YOU felt incredibly unsure and stressed, what's the most YOU've paid to fix it?
This value likely won't be exact.
But that's okay; it needn't be.
Because, your actual price shouldn't be anywhere near 100% of the value you bring,
(Otherwise, your customer ROI [return on investment] for purchasing you would be zero!)
But as long as the price you pick ends up being about 10-20% of the value you bring,
You'll be a steal.
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