What's Your Price Story?

I have been studying pricing in the real world for the past decade. When my agency engages in a project we need to understand the price of the service, the average cost to acquire a customer, operating expenses, conversion of leads to customers, and profit margins. We cannot forecast and set targets for a profitable ad campaign without the complete picture.

In 100s of these conversations, I have heard many "pricing stories."

What is a price story? It's a term I use to describe how a business explains how they came up with their current pricing. What were the precise steps that led us to the current pricing? I want to explore where it started, the big shifts/jumps, and the complete evolution of each price increase.

It's important to note that each time your price goes up it creates an evolution within your business. Regardless of what you changed (if anything) in your service to reach the new price, there is a mindset evolution that needs to occur in order to actually generate sales at that new price. If you don't believe in the price it will show up verbally and in your body language when pitching.

Here are the most common price stories (simplified)

• My job doing x work paid me y. I just doubled it
• I feel like I'm worth x per hour
• My competitor charges x and they are better/worse/bigger/smaller/more or less skilled than me
• I heard that the industry standard is x
• I feel like I can only get x
• I don't know, it was always just x

These are all terrible ways to set your price but for most solopreneurs, it's what they know. It's hard to decide to make a change when things seem to be holding together. Prospects are becoming customers at this price, my business is surviving at this price, I feel comfortable selling at this price. But the truth is that the wrong price (low) creates some major risks for your business

• No margin to hire or delegate
• Heavy reliance on you being available every day
• Inability to step away/rest/get sick/ vacation
• The low ceiling for growth because you need to fulfill every task/project
• Burnout risk

I see so many "businesses" that are being run like freelance projects.

My two favorite solutions to this are value-based pricing and outsourced-based pricing. I will dive deeper into these in the coming week's email

But for now, I will challenge you to explore your price story. Are you selling at your current rates because of a ghost from your past chasing you? Have you ever really thought about why you price the way that you do? I want you to consider if your current rates allow your business to grow and develop the way you dream about it working.

I would love to hear your feedback or stories if you care to share.

Mike

If this email hit super hard and you feel like you need urgent help with your pricing - I have a new offer "raise your rates VIP day." It's new so the price will be excellent and you will get a lot of extra attention from me as I'm developing things. Let me know.