Welcome to Marketing School, the only podcast that provides daily top level marketing tips and strategies from entrepreneurs that practice what they preach and live what they teach. Let's start leveling up your marketing knowledge with your instructors, Neil Patel and Eric Sue. All Right, guys, before we start, we got a special message from our sponsor. If you want to rank higher on Google, you got to look at your page speed time. The faster website loads, the better off you are with Google's Core Vital update. That makes it super super important to optimize your site for low time. And one easy way to do it is use the host that Eric and I use, dream Hosts. So just go to dream host or google it, find it, check it out, and it's a great way to improve your low time. Today we will talk about We're going to talk about how to capture the most value when pricing. So pricing. Pricing is one of the biggest levers you can pull with your is this A lot of people undercharge too much? I know a lot of you listening to this you tend to overcharge or sorry, undercharged because you might be scared that people might not pay for rights. So We're here to talk about how you can capture the most value when you're pricing. The first thing I want you to do is go check out Price Intelligently, also known as profit Well. They have a really good blog on pricing optimization and how you can figure out the ideal price points for what your customers are willing to pay. They use like statistical analysis and all these math formas that figure out the exact amount of dollars you should charge for your product or service. Yep. And what I'll say to is those of you in the services world, or let's say you're charging for a high ticket type of offering, read the book Pricing Creativity, and that book is priced accordingly. I think it's a minimum one hundred dollars for the PDF, and I think if you pay two hundred dollars you actually get the binder. I like having the physical things where I can refer back to it. I find PDFs to be a little tougher. So Pricing Creativity is a great book. And I'm going to give you a few of the questions that you can ask when you're on a sales call. So let's say I'm trying to sell Neil on something right now, you know when it comes to sales, right, So budget authority, needs and timing. What you're trying to nail down is needs. Right. So I might ask Neil what are your goals exactly? And Neil might say, you know, our goals get one hundred more sales per month. And I'll say, okay, Neil, what is the value of reaching that goal? Okay? And Neil might say I don't know, and I'll say, so well, Neil, what's your average order value? What are your conversion rates? How much traffic are you getting? Right now? Then I can back into it. Right then I'll know the value of the goal if I hit that goal. Okay. Now it's becomes a different story. So let's say the value of hitting his goal is half a million dollars a month, So that's six million dollars a year. Okay, So now I know if I can hit that six million dollars. Okay, that's what I'm going to help bring to him. Now I go to my team internally and I'll say, okay, what are the odds that we can hit this goal. It's called fifty percent, okay, So fifty percent times six million is three million dollars now I will price my highest tier, okay, of my offering at three million dollars divided by twelve. Okay, so three million dollars divided by twelve. I think that's twenty five grand a month or something, So twenty five grand a month. That's the highest offering. And then I'll cut it in half for the half offer, the medium offer, so twenty five grand, twelve point five grand, and maybe something like eight grand a month. So you have a small, medium, and large, and then you can bundle different things in it, and then you know different offerings or different service levels, and now you're capturing more value instead of saying I'm just going to charge you five grand or fifteen percent of AD spend. Right now, you are capturing a lot more value, and you're making a lot more money, and you're a little more aligned with the customers. It's not exactly the best way, but I like this a lot more than just kind of offering a blanket statement for when it comes to pricing. That's one way. And another thing that strategy that I love doing is charging lower on the front end. And people are like, why you make more money when you charge more? Because you need less sales to recoupate the same money. At least that's what a lot of people believe. Well, I like doing a lot of times is charging less on the front end, getting more people through the funnel, and then having multiple op sales and down cells, because what I find is in most cases when I'm running tests, I make way more money that way, and I have happier customers with less refunds and less chargebacks. Then just charging more out the gate, I would consider testing that as well. In essence, your offer on the front end, and we talked about offers, and the last episode is so irresistible and so affordable that people are like, oh wow, this is great. Let me just buy it for five dollars, ten dollars, twenty, whatever it may be, and then you add on a lot of upsales and down cells with really boost the value of your car. I think one of the most irresistible offers you can make is pay for performance. And so you don't necessarily need to do it for every customer, but if I can go to one or two big customers out there and say, hey, you don't need to pay us, We're going to run your ads for your run your marketing or CRO for you. You don't pay us until we perform. I'll even pay you if we don't perform. That's an amazing offer. And not only that, you're capturing the most value because your incentives are now aligned. You're almost now seen as a partner. Right So now instead of saying, hey, you know, we're going to charge you five grand or fifteen percent of ad spend, where at a certain point the customer gets so big where they have to fire you because it's not cost efficient anymore. Now it's like, okay, for every single sale that you generate, they will pay you. Otherwise, if you don't generate any sales, they're not going to pay you anything. Right, So talked about in the past on this podcast. We know people that are doing five hundred, six hundred million dollars plus. They have three hundred employees, so they're very efficient with their business. Another friends company twenty six million dollars plus. I'm sure it's more now with ten employees. Right, So, very efficient businesses. And these are pay for performance tite businesses. But I'm not going to say do it all at once. Maybe it's something you slowly transition towards, you slowly work towards yep. So that's it for this episode. Make sure you rate review the podcast. We have an in person event coming up soon, make sure you check it out at marketingschool dot io slash live. We appreciate you joining us for this session of marketing School. Be sure to rate, review, and subscribe to the show and visit marketingschool dot io for more resources based on today's topic, as well as access to more episodes that will help you find true marketing success. Text marketing school dot io until next time. Class dismissed

Welcome to Marketing School, the only podcast that provides daily top level marketing tips and strategies from entrepreneurs that practice what they preach and live what they teach. Let's start leveling up your marketing knowledge with your instructors, Neil Patel and Eric Sue. All Right, guys, before we start, we got a special message from our sponsor. If you want to rank higher on Google, you got to look at your page speed time. The faster website loads, the better off you are with Google's Core Vital update. That makes it super super important to optimize your site for low time. And one easy way to do it is use the host that Eric and I use, dream Hosts. So just go to dream host or google it, find it, check it out, and it's a great way to improve your low time. Today we will talk about We're going to talk about how to capture the most value when pricing. So pricing. Pricing is one of the biggest levers you can pull with your is this A lot of people undercharge too much? I know a lot of you listening to this you tend to overcharge or sorry, undercharged because you might be scared that people might not pay for rights. So We're here to talk about how you can capture the most value when you're pricing. The first thing I want you to do is go check out Price Intelligently, also known as profit Well. They have a really good blog on pricing optimization and how you can figure out the ideal price points for what your customers are willing to pay. They use like statistical analysis and all these math formas that figure out the exact amount of dollars you should charge for your product or service. Yep. And what I'll say to is those of you in the services world, or let's say you're charging for a high ticket type of offering, read the book Pricing Creativity, and that book is priced accordingly. I think it's a minimum one hundred dollars for the PDF, and I think if you pay two hundred dollars you actually get the binder. I like having the physical things where I can refer back to it. I find PDFs to be a little tougher. So Pricing Creativity is a great book. And I'm going to give you a few of the questions that you can ask when you're on a sales call. So let's say I'm trying to sell Neil on something right now, you know when it comes to sales, right, So budget authority, needs and timing. What you're trying to nail down is needs. Right. So I might ask Neil what are your goals exactly? And Neil might say, you know, our goals get one hundred more sales per month. And I'll say, okay, Neil, what is the value of reaching that goal? Okay? And Neil might say I don't know, and I'll say, so well, Neil, what's your average order value? What are your conversion rates? How much traffic are you getting? Right now? Then I can back into it. Right then I'll know the value of the goal if I hit that goal. Okay. Now it's becomes a different story. So let's say the value of hitting his goal is half a million dollars a month, So that's six million dollars a year. Okay, So now I know if I can hit that six million dollars. Okay, that's what I'm going to help bring to him. Now I go to my team internally and I'll say, okay, what are the odds that we can hit this goal. It's called fifty percent, okay, So fifty percent times six million is three million dollars now I will price my highest tier, okay, of my offering at three million dollars divided by twelve. Okay, so three million dollars divided by twelve. I think that's twenty five grand a month or something, So twenty five grand a month. That's the highest offering. And then I'll cut it in half for the half offer, the medium offer, so twenty five grand, twelve point five grand, and maybe something like eight grand a month. So you have a small, medium, and large, and then you can bundle different things in it, and then you know different offerings or different service levels, and now you're capturing more value instead of saying I'm just going to charge you five grand or fifteen percent of AD spend. Right now, you are capturing a lot more value, and you're making a lot more money, and you're a little more aligned with the customers. It's not exactly the best way, but I like this a lot more than just kind of offering a blanket statement for when it comes to pricing. That's one way. And another thing that strategy that I love doing is charging lower on the front end. And people are like, why you make more money when you charge more? Because you need less sales to recoupate the same money. At least that's what a lot of people believe. Well, I like doing a lot of times is charging less on the front end, getting more people through the funnel, and then having multiple op sales and down cells, because what I find is in most cases when I'm running tests, I make way more money that way, and I have happier customers with less refunds and less chargebacks. Then just charging more out the gate, I would consider testing that as well. In essence, your offer on the front end, and we talked about offers, and the last episode is so irresistible and so affordable that people are like, oh wow, this is great. Let me just buy it for five dollars, ten dollars, twenty, whatever it may be, and then you add on a lot of upsales and down cells with really boost the value of your car. I think one of the most irresistible offers you can make is pay for performance. And so you don't necessarily need to do it for every customer, but if I can go to one or two big customers out there and say, hey, you don't need to pay us, We're going to run your ads for your run your marketing or CRO for you. You don't pay us until we perform. I'll even pay you if we don't perform. That's an amazing offer. And not only that, you're capturing the most value because your incentives are now aligned. You're almost now seen as a partner. Right So now instead of saying, hey, you know, we're going to charge you five grand or fifteen percent of ad spend, where at a certain point the customer gets so big where they have to fire you because it's not cost efficient anymore. Now it's like, okay, for every single sale that you generate, they will pay you. Otherwise, if you don't generate any sales, they're not going to pay you anything. Right, So talked about in the past on this podcast. We know people that are doing five hundred, six hundred million dollars plus. They have three hundred employees, so they're very efficient with their business. Another friends company twenty six million dollars plus. I'm sure it's more now with ten employees. Right, So, very efficient businesses. And these are pay for performance tite businesses. But I'm not going to say do it all at once. Maybe it's something you slowly transition towards, you slowly work towards yep. So that's it for this episode. Make sure you rate review the podcast. We have an in person event coming up soon, make sure you check it out at marketingschool dot io slash live. We appreciate you joining us for this session of marketing School. Be sure to rate, review, and subscribe to the show and visit marketingschool dot io for more resources based on today's topic, as well as access to more episodes that will help you find true marketing success. Text marketing school dot io until next time. Class dismissed