Can ChatGPT Help You Price Your Product or Service?

Business Brain, the Entrepreneur's show, episode 418 for Wednesday, January 25, 2023. Greetings, folks, and welcome back to or welcome to Business Brain, the show where we talk about and figure out how to use our business brains to make our lives in general better. Here in Durham, N.H. at least when I'm recording this, I'm Dave Hamilton.

And here in Lafayette, California, I'm Shannon Jean. How you doing, man?

I'm good, I'm good. Yeah, yeah, yeah. You know, just cranking along. It's what we do.

Yeah, that's. That's what we do. Grind it out. That's the secret to success, right? It's the grind.

The efficient grind. The correct grind. Yeah, yeah, yeah, that's it. Being busy doesn't matter.

No.

Being productive matters. And if you can be productive more than other people can be productive, and let me tell you, folks, you can. It's one of the easiest things to do in life. Then you'll be more successful. You just have to be willing to.

Do it and you don't have to be that much more. It's a. It's.

No, it's just a little bit.

Slight edge. Right. It's the, like the, the title of the book, the Slight Edge, which is they talk about being 1% better can will exponentially make you more successful in your life.

It's. It's like I am a walking while currently sitting testament to that.

Me too.

No question about it. Because I'm really. I'm kind of a lazy person. But I'm. I'm more productive than most of the rest. I see myself as having lazy tendencies, but I, you know, I just, I know it. And so it's like you're self aware of it.

So you're. Yeah, correct. I feel the same way.

And I'm aware. I'm aware that I'm aware of it. Like, it's like. I know that sounds weird to say, but it's like, yeah, I realize what the edge is. It's just. I just don't let myself be as lazy as the next guy.

Yes, that's correct.

That's it.

They also have the Slight Edge for Teens, which is a book that I highly recommend. Yeah. And if your kids won't read it, you can and then talk to them over time and trick them into absorbing it and. Same same concepts, but written in a way for young people to absorb in their lives. It's brilliant. It's brilliant.

I had no idea.

Yeah, it's good stuff. Yeah. But that's not what we're going to talk about today.

Are you sure?

Well, maybe it gets sidetracked, but I want to talk about pricing. I'm always interested in how people price things and part of my success has been ignoring advice on prices and ignoring my competition and trying to come up with a way to, you know, distinguish why you would want to pay more. I've always been a higher priced person, not a huge volume person at a lower price. So I've always kind of tried to be a contrarian in pricing. And so I came across this article and I'm sure everybody. Well, maybe not, but if you're listening to this, perhaps you're familiar with a service or a website called Chat GPT.

In fact, we did an episode on it.

Yeah, we did an episode here. And it's, it's A service from OpenAI is the company and they have. So far it's been a free version, but as it's gotten more popular over the last six weeks or so, there are times where you just can't get on to use the service because it's overloaded. And of course they are going to roll out a paid version for businesses and whoever wants to use it. So thinking about pricing, they posted a survey up on the website and when you signed up, you would sign up to say, hey, I want to be alerted to when the pro or business version that you know comes out.

Yeah.

And they asked four questions which I really thought was brilliant and to try to figure out what to price this thing at. And so let me tell you what these questions are, okay? And they're so basic, but we all, at least me, you know, ignore asking our customers this. And so first one is at. And these are all per month. They're going to sell a subscription service, of course.

Great.

And at what? The first one is at what price per month would you consider ChatGPT to be so expensive that you would not consider buying it? Very basic. And this number two, at what price per month would you consider ChatGPT to be priced so low that you would feel the quality couldn't be very good?

This is for a service that's already proven itself. They are asking and they are correct to ask this question, how much would be so low that you wouldn't think it was worth it?

Not worth it.

Even though you already know how well the service works.

It's human. It's human nature, totally human nature. It's only five. Can't be worth it. It's only. It's not gonna write this document, you know, or this contract for me when it's only five bucks a month. Right. Or whatever. And then they ask, at what price per month would you consider ChatGPT starting to get expensive? So that is not. It is not out of the question, but you have to give it some thought before buying it. And lastly, at what price per month would you consider ChatGPT to be a bargain? A great buy for the money. And, you know, I love this concept and I wish that I had done it in time. I mean, we, we ask customers and you kind of have this, you know, whatever you get a feel for, because believe me, you know, people will tell you when they think you price things too high. Yeah, but put it. Creating a survey and putting it up on the wait list for people that are interested in getting a pro version of Chat GPT, one that's always going to be live and probably has different features, it's brilliant because they're going to get just a massive amount of data. And that's the important part.

Right?

Can you get enough feedback to make it really valuable? I think that's. There's got to be some level that you have to have enough people that will tell you the answers to questions like these to make this exercise worthwhile doing so. But if you have a big newsletter, you have a big Facebook group, you know, great questions to ask to figure out how to price your product or how to price your service, because you don't want to leave money on the table, right? You don't. And you don't want to price it so low that nobody think it thinks it's worth it. And you don't want to price yourself out of the market. So getting some guidance from your customers is. It's genius.

This is, this is brilliant. What price is too high? What price is so low it tells you the product won't be worth it? What price is starting to get expensive? And what price is a bargain? These are the four questions.

Do you think they asked ChatGPT.

How.

To find this out? Surely they must have, you know, what's the best way to find out what customers would pay for a service like ChatGPT? Yeah, maybe these were. Maybe these kicked them out. But it's a great exercise, something that we've talked about pricing a lot on the show. We've talked about things like anchor pricing and whether you should pay attention to your competitors. We'll put a few of those links in the show notes. But it's important and it's something that you need to put some effort into figuring out where the Range really works for you. Right?

It's a smart thing. I'm curious, I mean We've both used ChatGPT for a variety of, of things thus far. What would your answer to the too high question be? Like, I, I'm. Or like what would you be willing to pay for it? I, you know, answer any of these questions, but I'm just curious.

I think, yeah, I think they'd have to have different levels that had some. Because. Okay. Like from a, let's say a, A personal standpoint, a research. Okay. Or I'm maybe a student or whatever. Maybe they need a $10 per month that is. Has some sort of limits, like some sort of throttle. But you know, from a business standpoint, you know, 50 bucks a month. Under a hundred, under a hundred dollars.

Okay.

I think, I think I'd be like, okay, that's worth it. And maybe I wouldn't keep it for a year, but if I was going into a project where I knew I was going to really be able to take some value from it and use it almost, you know, as a crutch to lean on or help me with documents or research, then yeah, jump in. Hey, 99 bucks, you know, for a three month window or something like that.

Yeah, no, I, I would pay.

Right.

I would pay 100 bucks a month for it.

Yeah.

You know, and, and that would be to use it for business stuff and personal stuff because as we discussed recently, I'm. Yeah, you're one guy, you know.

Yes, yes, that's right. But you could, each, each level would get this. The previous levels. Benefits. Right.

Yes. Yeah.

And so you could kind of build it up and so that.

Yeah, I mean my mess is like. And I mean we don't need to spend too much time sort of postulating what the levels might be. One obvious level or way to control this would be okay for 10 bucks a month, you know, you get 100 queries or something. Yes, right, right. You know, and then if you want more than you need to step up to the next.

Yes.

The next tier. Whatever, whatever that is. Another way would be. Okay, well you get. And this, now that I'm thinking about it, I really like this. Although it keeps people from seeing the real value of it. The one of the biggest, one of the most important things with chat GPT and I feel like a lot of people that use it don't really leverage this, so I'm going to encourage all of you to do it is the T part of it, which I think, I think that's the T part of it, the transformative nature of it, meaning you can interact with a response you've gotten and have it iterate on that response. And, and so like that's super valuable. But what if that part of it was only for the paying users?

You know, let the free. Yeah, that's right.

The free users just can ask a question, get an answer. By the way, what price is too high for Chat GPT? Well, it says as a language model, I do not have the ability to determine a price or value for myself. That decision would be made by those who own and operate the resources that I am running.

Thank goodness. Thank goodness.

Yeah. This is, I wonder if this is a human crafted response that has been programmed in.

Right. But that's.

No, I would pay, but I think most people would get value out of this at $10 a month.

Yes.

Like, I think that's not too high for the, for most people. But there's a huge asterisk there right up until the day that Google launches Lambda in whatever form Lambda is going to launch. So Lambda is Google's transformative chat engine that they have been working on longer than ChatGPT has been worked on. In fact, as I understand it, it was Google's white paper about their work on Lambda and the existence of Lambda that sort of catalyzed what we now know as ChatGPT. And Google knows that the future of search is a transformative chat engine. It's not search. Right. Like if you could just use ChatGPT for current data, you would never search Google again in the way that we know Google. So this is why Google, this is why Google developed Lambda because they know this too. Right. And so my guess is if Google can monetize their chat, you know, their transformative chat engine, the way they have monetized search, I.e. ads and not subscriptions, then Google's engine will be free as well. And then that will change the value of ChatGPT. But until that day, chat GPT gets to sort of live on its own in, in the public consciousness.

So yeah, it's, it's, it's interesting times.

What a smart thing though. Use that. But talk about your business brain man. I'll put those, I distilled those four questions down. I'll put them in the show notes because I think this is, this is something that I'm going to want to reference back to at some point.

Yeah, me too. It's a great system. And like I said, we've talked about different pricing systems before on shows. We'll link those in the show notes and share how you set your pricing feedback at BusinessBrain show remember, if we talk about your email on an episode, you'll get entered to win a MacBook this year.

MacBook Air. Even MacBook Air. Yeah, so thanks for that. Send in your stuff. Feedbackusbrain show we'd love to know how you're pricing things. Keep living that charm life and we'll see you next time.