Pricing & Packaging Lecture

Transcript

[00:00:00] All right. Now we are going to talk about pricing and packaging, which is probably the hardest Subject. Pricing is so subjective and there's a lot of mindset that goes into it, like, am I worth this much ? Do will people value it, and all of that. But we're going to get into the nitty gritty math. So when you're pricing and you're determining what you should be charging, you need to consider two things.

[00:00:35] Does this provide the life that I want? And two, does this pricing compare to my competitors? A lot of people say, um, price what you're worth, but. , we all feel like we're worth different amounts, and what you really need to do is look at what the market says that service is worth, and you need to stay within that range.

[00:00:58] Now, if you have [00:01:00] amazing experience or niche experience, you can price above certainly. and if you're less experienced, you can price below, but try and keep it within the wheelhouse of what your competitors are charging so it, uh, it makes sense. If you're going to charge more, you need to have a value add to it.

[00:01:22] And if you're going to charge less, it has to be for a good reason, otherwise you'll be taken advantage of and people will just think that you aren't worth that much and you are. So here are a couple different ways that you can, uh, calculate what you should be charging. And this is just plain math that we're going with on this.

[00:01:44] So, um, here you go. Take the. hours that a pa that a certain project takes you. Like for this example, let's use your core offer. Let's say your core offer is [00:02:00] an email newsletter, and, um, how many hours does it take you to create that? And then multiply that by your ideal hourly rate. Now, if you haven't determined what your hourly rate is, Just divide how much you wanna make if you're aiming for those 10 K months, 120,000 a year, and divide that by the number of hours that you generally work in a month, and that can come up with your ideal rate.

[00:02:28] Know that. Okay, so hours, times ideal hourly rate equals why? Why? Divided by 0.33 equals X. So 33% is about what you get charged, what you get taxed for as a self-employed person, which is insanity, but it is what it is. So add that on top of it. When you're pricing out your packages and then X plus Y equals your price.

[00:02:57] That's how you can do it when you're packaging up a [00:03:00] price. So take that price and compare it against your competitors. Is that pricing around the market value? If it's less, consider moving it up. Maybe you can charge more than you think. If it's way over, is there, are there any value adds that you can ha have to.

[00:03:21] like if someone buys this package, can you offer an additional course to help them take it one step further? Or maybe monthly coaching that will take them one step further. So that's a way you can work around any pricing that doesn't make sense for the market is add something additional to. . Um, also there are other formulas for that.

[00:03:49] So you can use value-based pricing cost plus, which would basically be taking the amount of money that it costs to create whatever you're [00:04:00] doing, and then add an additional amount to it, competition based and hourly based. Now, if you're doing that, do it like I showed you here. , you're packaging it up so it's not clear what your hourly rate is because people start to nickel and dime when you're doing hourly rates.

[00:04:19] Like did it really take you that long to do ? So HubSpot has a calculator that you can use to calculate all of this pricing, and if you go to the resource section of this course, it is in the textbook. So make sure to go. Okay, so now once you have a basic pricing structure down, you'll, once you package it, oops, skip it.

[00:04:48] E, skip. So the biggest mistake that I see, even, even veteran entrepreneurs do some people that I work with, Still go with, okay, [00:05:00] this is my estimated scope, how many hours it'll take to do this project. This is how much I charge per hour. And they're very transparent about that. , but that's when you get the nickel and di.

[00:05:11] Well, if that's the case, I don't wanna do this section of the project because it won't, it doesn't get me to where I need to be, or that only benefits you, that doesn't benefit me. And people start to really pick apart hourly pricing. Just don't do it. , um, you leave money on the table because as you get better at what you're doing, you do it faster and then it takes less time.

[00:05:37] But your price, your pricing is based off of the time, so it's no good. Instead, just package it up. You don't wanna lose out a money just cause you're getting better at what you. . So how do you package your offers? What services do clients request together the most often? What are your top sellers? What do you charge for each of those [00:06:00] services?

[00:06:01] Um, how long does it take you to complete them? Add all of this together. So I'll go through these questions first, and then I'll explain how you can package. . All right. How long does it take you to complete those projects? Do you have any extras that come with these services? Like meetings, consulting? Do you have templates, resources that you provide?

[00:06:23] Um, are you available for ad hoc phone calls? How much are those extras worth like. Honestly, I use a timer for everything. I use my project management tool to time, how long I'm spending, answering emails from a certain client, answering slack messages from someone. Add all of that time up so you can include that within the pricing structure of your package.

[00:06:48] um, how much time does it take behind the scenes when you're answering emails? You are setting up projects in your project management tool. You are maybe putting their [00:07:00] content in their c m s or their email. Look at all of the little details of it. All right, so. First thing first, we're going to group our services together that are most requested.

[00:07:13] This is going to be a package. These are the things that people request the most together and putting them together. What do you charge for each of those services? How long does it take you to complete each of those services? So these two things will tell you, one, how much a base price for that package could be, which would be how.

[00:07:34] the combination of how much you charge for each of those and how long does it take you to complete them. That'll give you a good idea of how many clients you can truly afford to bring on each month and still maintain a life. You want to know approximately how much time you're going to be spending on client work, because let's be realistic.

[00:07:55] You also have to spend time on marketing, brand building, relationship building. You can't [00:08:00] just be doing client. . Um, now, okay, you have an idea of how many clients you can take on how much time you have, and you have an idea of what you charge for each of those services individually. Okay? So take that number, how much you like Service A plus B plus C equals this.

[00:08:22] Now, how much time are you spending on extra services or behind the scenes items? Add that up and multiply that by your mental hourly rate. Now realize nobody knows your hourly rate, but you okay, add that to the package pricing. And that's how much your package pricing should be. But make sure to compare it to your competitors and other people in the market because you want to make sure that you are competitive and that you're not gonna lose out on business because you are overcharging, but you [00:09:00] also don't wanna undercharge.

[00:09:01] You need to find that perfect pricing because undercharging means they don't value you. And oftentimes the undercharging clients are the worst ones, the most demanding. . Remember, your goal is to get to 10 K months, so to cr create packages that will get you to those 10 K months and make it realistic. How many clients can you afford to bring on for that?

[00:09:27] Okay, so let's look at an example. If you have a business where you write weekly newsletters for your clients and you charge $250 a newsletter, your package would be. this a thousand dollars a month. Weekly newsletters. Now, when you are listing out your service and you're explaining what your core offer is, you want to explain every detail of what's included so people know that they're getting the most value.

[00:09:57] They might not realize everything that goes [00:10:00] into creating a weekly newsletter, so you need to spell it out for. , you get four to five newsletters a month. You get monthly reporting, you get AB testing on subject lines, optimization, design sequences, and automation. MailChip preferred partner. That would also include copywriting, obviously.

[00:10:19] Um, so you're spelling out exactly everything that they're getting now. when you're trying to sell this, you'll also wanna say average open rates, average click through rates that you're getting, um, how much money your clients have made through the emails that you have created for them. What is it worth?

[00:10:38] What is the value? Let's say you can create a case study that shows that your client was able to. Um, let's say 10% of their website traffic comes from email, click through rates. Let's go with. And then you can take that 10% of [00:11:00] traffic and multiply it by their conversion rate and how much money they're making on average per package that they sell.

[00:11:10] And that could give you a good idea of comparing how much money they will gain from this service compared to how much it costs. And then the value is really there and evident. Okay. You would only need 10 clients to meet your goal if you had this package, and there are a thousand different packages that you can do.

[00:11:34] This is just an example.

[00:11:39] Okay, I have additional resources for you. So all of these are available at the bottom of our course, module 10. So make sure to go there. I have the v I P day system saved me resource, how to structure a coaching program, if that's what you wanna do. , [00:12:00] um, your core offer, packaging your services, and most importantly for this particular lecture is HubSpot's pricing calculator is in there, so you can find it in the resource section of our course of module 10, and you can also find it in the textbook.

[00:12:16] Do not forget to look at that textbook. It has a ton of information in there. All right, thank you.