Table of Contents
How to start, grow and manage a business that lets you break free from the grind.
Issue #44 This Is How Value Works for You January 25, 2022
Hey, ,Correction: the KPMG Spark Webinar is TODAY not tomorrow... register hereLast week we defined value as the importance of the transformation you offer in the mind of the customer. The price you can charge, therefore, is a function of (here comes the faux math again) the transformation, the probability that they will get it, how long it will take and how much work they have to do. Today I want to build on that and talk about the final key ingredient in charging more money for the work you do. First, some updates:
KPMG Spark, today, free advice, avoid doing stupid things at tax time. Need I say more? 1 PM Eastern. Join us, register here, and prevent tax disaster.🙋🏽 Hey Joe, what is the essential part of irresistible sales and marketing? Joe loses it as he answers the question; check out his answer here. 📙 Have you defined your brand story? Read this blog post to learn more; communicating your brand story is crucial to establishing value, trust, and relevance. 💊 And don't forget the power of Oxy(tocin). That warm and fuzzy feeling is trust and relevance coursing through your veins. Read more.
That final piece is trust and relevance. Imagine that you have a magical work lever. On one side, you have value; on the other, you have the money you charge. The fulcrum (yep, had to look it up too) this "sales lever" is balanced on is "trust and relevance." Your customer buys and is happy if the sales lever is balanced (or tilts toward value). Imagine a situation where your trust and relevance are average and value balances with money, the situation looks a bit like this:
Low "trust and relevance" means you have to deliver huge value for the price you offer. It doesn't matter how much you talk about how much they should trust you or how relevant your offer is. Trust and relevance colors everything you do and say. With lower trust and relevance, the fulcrum moves toward the value side. This imbalance means that you must increase the amount of value relative to the amount of money in order to make the sales lever balance:
This is not a bad thing; it is just fact: If you are new to a market, your prospects will not yet trust you or see your relevance. So, you lower your price to build your reputation: just make sure you are actually building your reputation, not just giving away the goods for free forever. Or you may sell a product that requires little trust and relevance Consider our Thrivers product. We deliver a tremendous amount of value for the price we charge. The finances work for us because it is very scalable. Some trust and relevance are required, but not extreme amounts. As people come to trust us they end buy even higher value products. It is a problem if you have a higher-priced product with more abstract value. Imagine Virgin Galactic; their price is in the hundreds of thousands, the value is a few minutes in (almost) space with the risk of death, so the trust factor must be high.
With high trust and relevance, you can charge a higher price. Think of it this way: if you believe with 100% certainty that I can give you $1 million right now with no effort on your part, how much would you pay? Anything less than $1 million. You would still gain if you paid me $999,999. (Yes, I am ignoring transaction costs... this is a fictional situation to illustrate a point, not an offer.) But charging such a high price compared to the value requires extraordinarily high trust and relevance. No matter value will always increase with price, but interestingly, improving trust and relevance has an even greater impact (now we are talking faux physics!). So, where does this leave you?
- Ask yourself where your price is versus your value. Do you need a higher price?
- If you need a higher price, start by looking at value; how can you add more value without doing more work? Or by doing the work once and selling it multiple times.
For more details on setting price, check out this blog post here. Next week, be sure to tune in because I'll be giving away our price setting tool for free. (Please don't tell Joe, Heather, or Carla.) Talk soon, Jeff
- And, how can you boost trust and relevance? Testimonials, showing results, guarantees, free entry point offers, demonstrate that you know your stuff before selling the product.
Want more trust and relevance? Well, how about a Thrivers Team? They can help you figure out how. Thrivers Teams are a great way to expand your business savvy and build trust. They are also an integral part of Thrivers360. Click here, to get started.
Other great stuff from around the web ⚖️ Give me a place to stand and I'll move the earth. Trying to figure out levers? We've got you: watch the video here. 📷 Want a glitchy photo? Here's how. Glitchy photos do really well in ads and social media, but making them is a pain. Not anymore (not gonna lie, I thought about keeping this one to myself.🤔 Tumbler is back? Have you heard about this? An interesting development at the once-left-for-dead platform. Why does Gen-Z love it? No influencers... Read more.
One last bite at the Joe loses it cherry
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