355. The Truth About Pricing: Behind the Scenes

Welcome to episode 355 of the Brainy Business Understanding the Psychology of why People Buy. Today's episode is a behind the scenes look at my brand new book, the Truth About Pricing. Ready? Let's get started. You are listening to the Brainy Business Podcast where we dig into the psychology of why people buy and help you incorporate behavioral economics into your business, making it more brain friendly. Now, here's your host, Melina Palmer. Hello. Hello everyone. My name is Melina Palmer and I want to welcome you to the Brainy Business Podcast. Today is a very exciting day because in addition to being the first episode of the New Year, Happy New Year by the way, it also releases the Friday before my third book, the Truth About Pricing, how to Apply Behavioral Economics so customers buy, which launches this next week on Tuesday, January 9, 2024. Hooray. In today's episode, I'm going to give you a behind the scenes look at the Truth about Pricing, why I wrote it, who it's for, a little of what's inside, plus a look at the questions I get most often about writing and publishing books. After writing and launching three books in just over three and a half years, I'm sure you can believe that it is a question I get asked about often. A lot. It's all waiting for you in today's episode. Really quickly. Before we get into the conversation, I want to be sure you know that there are links in the show, notes for everything, including related past episodes, links to articles and books of course including the Truth About Pricing and so much more. It's all within the app you're listening to and at the brainy business.com355 now. Let me tell you about the book. It has been a wonderful whirlwind of books these past three and a half to four years. As I said in the intro, this is my third book and the first released in May of 2021. So that's a lot of writing and book focus for me and the brainy business. Recently I decided to take a little walk down memory lane and looked back through my email archives to get get a little clarity and refresh on the timeline. I had been thinking about writing a book for a while. I used to edit books even before I started consulting full time and a little bit when I made that transition, but really got rid of all of that when I eventually launched the Brainy Business podcast and did some rebranding back in July of 2018. I had already started talking about this in late 2018 and connected with someone in early 2019, a PR and pitching expert who put me in touch with a book agent. Actually, she connected me to someone who helps people to write proposals, who then put me in touch with someone who she knew that was a book agent. This definitely is a who you know world. And there is a reason I always talk about the importance of being a good person with kind, generous interactions everywhere you go. You never know what opportunities are around the corner. And having positive connections is always helpful. So that first book proposal got an agent interested around April of 2019. She said that she liked me and the idea and that she wanted me to have at least one social channel with at least 10,000 followers before she would feel ready to pitch me to the big publishers. And she let me know that in many cases she needs a hundred thousand or more. So this was a benefit for me. So at that point I decided that 2019 was going to be a year of, of getting my social channels and followings up. So I was ready to be pitched. And, you know, there's no real downside to doing that and having that focus, even if, you know, that publishing thing didn't work out. There are multiple avenues for book publishing. And again, this is something I get asked about all the time about which path you should choose. I knew that I could self publish if I wanted to. I know tons of people who have done that and it's a really great path for them. Uh, so I decided to give it a year though, of trying to get the book picked up by a traditional publisher, which at that point I kind of thought was my only real other option, and that if I didn't, I knew I could always turn around and self publish. So Fast forward to September 2019. I got some pitches for people to be guests on the brainy business, which made me reconsider my plan to not and never do interviews and always have it be a solo show, which was the plan for a really long time. I have talked about that in other episodes, so I won't get into it too much now. But it is funny to reflect and see how much things change. So one of those initial potential guests was Scott Miller, who was at that time the EVP of Thought Leadership at Franklin Covey. We connected on LinkedIn, started a conversation, he offered to have a call with me and help on my journey if I wanted, which I absolutely took him up on. Always take people up on opportunities that they offer to you, by the way. You'd be amazed at how few people actually follow up when things are offered out there. So just taking the Initiative and doing something is a huge piece of moving things along and having success in your life and business. So we also decided to do an interview for the show. A reciprocity is a thing that works here. And so his episode and others are linked for you in the show notes. By the way, if you think I write a lot of books, you'll be amazed by Scott. He has had so many books come out in this time where I've only written three. So we had that first chat, it looks like, in October of 2019, and at that point, he talked to me a bit about my options and offered to make an introduction to a publisher when I was ready. He, at that point actually had two books that were on the verge of coming out. One with a big publisher, you know, your Simon and Schuster, Penguin Random House, something along those lines, and another that was coming out with a hybrid publisher called Mango. I got through the end of the year, was starting to do some prep work and was getting serious about getting a pitch together. And then just, you know, serendipity of how things work. I got a pitch from. From a different publisher, a big name that I was excited about in theory, but it still felt a bit off. So I reached out to Scott to get his thoughts on it. And after some opportunities and conversations, in late March of 2020, I had a proposal ready for Mango and asked Scott to make the intro. So things went really quickly from there. We had meetings in April and a contract signed by the end of May 2020 to get that first book written. The manuscript was due at the end of August. And, you know, I found myself with a big block of open time in my calendar where I was originally going to be traveling. And so that allowed me for some time to get that first book written and out the door in August. So what's funny is that initial proposal included two book options, two paths that we could go down that I was suggesting, you know, Mango could pick which one that they wanted. One was more general about what behavioral economics is and why it matters to business, as well as how to start applying it. And the other was to really do a deep dive on pricing strategy. So this book, the Truth About Pricing, was known to be in the mix from the very beginning. It was almost the first book. It was definitely the right way to do this. I'm so glad everything happened the way that it has. When Mango, of course, opted for the more general Introduction to Behavioral Economics as my first book, that became what your Customer Wants and Can't Tell youl, which came out on May 11th of 2021. The climate with the great resignation and eventually quiet quitting and so much else, made it clear that while I had originally thought pricing would probably be next, what your employees need, and can't tell you, absolutely had to be the second book. And it needed to come almost immediately after the first one. So I pitched that in September or October of 2021. There I had to have a little bit of a gap in time because you may not know, but I actually had my son Hudson in between those two books. He was born in August of 2021. It was a busy year. So since I always knew the importance of pricing, especially for small business, and knew that was a had to write, I figured I would ride the momentum and you know what's one more book? Knock this one out before taking at least a small break from books. That's the plan anyway. We'll see how long I stick to that. So the Truth About Pricing was pitched in its full and official form right around the time the second book came out in October of 2022. And here we are launching in January of 2024. And that feels like as good of a segue as any into the why behind writing this book. The thing I have found from working on pricing over the years is pretty much everyone hates it. Small business, corporate, new entrepreneurs and established entities. This is always a struggle. It's not that everyone always struggles with the same exact thing, but there's always something that's keeping you stuck. And in this blech sort of state, there's a lot of pressure that people put on themselves around finding the perfect price. It can be paralyzing and keep you stuck. And the thing is, when it comes to pricing, which is a big factor in selling, confidence is everything. Well, not everything, but it is key to your success. For sure, when you're not confident in your prices, people can sense it. This may cause them to spend an inordinate amount of time evaluating their options. Or maybe they ask for discounts or they'll pick smaller entry level packages to test you out before they commit. If you're dealing with those sorts of problems, the good news is it doesn't necessarily mean that your price is wrong or too high. It doesn't necessarily mean that your product or service is wrong. It might just be the way you're presenting it. And this book, the Truth About Pricing, helps anyone to go through the step by step process to gain confidence in their pricing strategy, that value proposition and how to present an offer to make it more likely that the customer on the other side will buy and feel awesome about whatever it is they got from you. Sound like a dream. It can also be your reality. I'll talk more about what's in the book in a few minutes, but but before I get to that, I want to spend a little more time on the problem and what I've seen over the years when it comes to pricing. As I said, this is something most everyone hates. It's stressful and it really feels like you have to get it perfect so you can put a lot of pressure on yourself to get it right. So what typically happens is this becomes something that's easy to procrastinate on. Let's say your launch is in six months. Today it's really easy to dream about what you'll be able to do to come up with your ultimate pricing strategy soon. There are some fun brain chemical things going on as you plan and dream. For example, you get a little dopamine for the anticipation of what is to come, so it can be satisfying to plan to plan, as it were. If you start to do research at this point, you'll likely just scratch the surface and say things like, I'll read the rest of this next month when I have more time. What you do find in those articles is likely pretty confusing and overwhelming, which is why it feels easier to put it off. While researching for the book, I found a plethora of options for your pricing strategy. Some of these articles recommended choosing from 4 different models. Others had 5 or 7 or even 14 options. Almost none of those articles even mentioned the importance of psychology, and if they did, they limited it to, you know, just a simple choice which was reduced to something small like rounding down to a nine instead of a zero. Now that is a piece of psychology that can be helpful in your pricing strategy. And I talk about the exact numbers to pick in the book, but this is not, not, not, not a one size fits all option. Next Friday's episode, the last one in this series on pricing that's going along with the book launch, is focused on something I introduce for formally in this book for the first time, the importance of determining if you are a quality or value business and what that means for your pricing strategy overall and which one should round down and which one should not. Trust me, it's so important. But more on that next week. By the way, if you aren't yet subscribed to the Brainy Business podcast, now would be a great time to hit that subscribe button to ensure you don't miss that episode or or any others. So again, if you did any research on pricing, you probably googled something like how to set my prices or what should my price be? Or Best pricing models for small business or something like that. You got a lot of results that likely caused more overwhelm and a paradox of choice problem that made you say I'll save this and look at it next week again and again and again. Then one day you woke up and said, oh no, the launch is next week and we haven't finalized a price yet. So you decide to just pick something good enough for now. Most often I see this as being something just under your competition or a percentage markup on the costs you know of, and you vow that you will revisit and do it right in three or six months once things die down and you have the time to invest in this piece. And now it's been four years and you've never raised your rates or reevaluated your pricing. Sound familiar? Even if your story isn't exactly this, I'm guessing it ticks some familiarity boxes for you. There's a whole section in the Truth About Pricing that digs into this problem on Mindset. If you've been listening to the show for a while or heard me speak before, you can likely see the time. Discounting Optimism Bias Planning Fallacy Bike Shedding Problem building up here. It's a classic tale in how our brains are wired, which keeps us stuck in the status quo again and again and again. I wrote the Truth About Pricing because I know it doesn't have to be this way. You can have confidence and put in time on the right things. I show you what those are in the book. Instead of productively procrastinating on the wrong things. I show you a bunch of those bike sheds too, so you can make progress and and set a price you will be confident in. And then I show you how to present it so you and everyone on your team can sell with confidence. Another thing I know about working with clients on pricing for years is because it feels stressful. People are often in a state of wanting to throw their hands up in the air and say, oh, just do it for me. So this book is as close to just doing it for you as I can get within the pages of a book. Unlike my first two books, what your customer wants and can't tell you and what your employees need and can't tell you, which are still both very applied, this book is less about the why this stuff works and matters. The science is still there. You'll find plenty of citations, but it's giving you the steps, the what's and how's with less whys. The other two books in this podcast are complementary items if you want to dig in on any of those more, but you don't need any of them to get the full value of the book. It is absolutely set up to be a standalone that will allow you to set your prices and move forward with confidence in your pricing. Just with the book itself. I make a promise to the reader early on to keep it as brief and to the point as I possibly can, and if you know me, that isn't my natural state. So it is boiled down to the best, most essential stuff to optimize your pricing. Using behavioral economics and psychology in the book, I walk you through the step by step guide with prompts and questions to answer to take you from where you are now to the pricing promised land as quickly as possible in a way you will feel confident in. And because I know that people tend to get into the pricing a bit too late, like the story I mentioned a little bit earlier and at a time where there's a lot of other big stuff happening at the same time, I did include a chapter called if you're in a rush, but more on that in a minute. I wrote this book to help everyone in business to confidently up level their pricing strategy in a way that will help you to sell more of the right stuff. That means what is profitable and valuable to the company as well as to your customers and clients. I also wrote it to help you attract and retain loyal, happier clients, to make it easier for clients and and customers to choose you and your products or services without having to spend time on the phone with you or a team member to make it so you and your team can feel excited about making sales calls rather than dreading and avoiding them all resulting in you being able to make more money while doing less work. Sound too good to be true? I promise it isn't and the Truth about pricing is there to make it your reality. Now, with all that background into why I wrote this book and a little behind the scenes and who it's for, let's talk more about what you'll find when you get yours, what's inside the book, how it's structured. The Truth about Pricing was carefully curated into three parts which are intentionally presented in a specific order. Part 1 Setting the stage is all about understanding the pricing problem and why properly applied behavioral economics is the key to your success. This section has three chapters. The first is called the Golden Octopus I love this chapter. It's a short introductory chapter into how pricing really works, with a story of my own purchase of one of my most prized possessions, you guessed it, a golden octopus, and what that means and what you can learn for your own business. What it means for pricing. Chapter two is about how to use the book and more detail on who it's for, like some of what we talked about here in this episode. And then Chapter three is the most substantial part of this section. It's called Pricing, Placement and Psychology. It offers insights about the brain and outlines issues with how others talk about and approach pricing, as well as shines a light on those funny tricks your brain plays that have kept you stuck to in the pricing trap. Like what I spoke about and touched on a little bit a few minutes ago. Letting you know how your brain is playing tricks on you is key to flipping the script and avoiding those brain tricks when they inevitably pop up, both as you work through the insights in the book and into the future as you are looking to stick to those choices that you make, it's there to help with that. Part two is called Building a Foundation and it is structured into six chapters. Each introduces a concept in a specific order I've curated to guide you through building a psychologically effective approach to pricing. I haven't outright said it here in this episode yet, but pricing isn't about the price. That's the truth about pricing. I say that on page three of the book, so I'm not giving away anything here too early in this episode. All the things that come before the price matter much more than the price itself, and for that reason we don't finalize your pricing number in this section of the book at all. That's what part three is for. So part two includes all the important insights you need to consider to properly set up the things that come before the price, creating a seamless buying experience for your customer and making it so the number doesn't really matter. While other approaches tend to start big and work their way down, for example Global market, local market, your competition, your company, the product, and finally the customer, this book takes you on a different journey of thought. The problem with starting big is that by the time you get to the humans buying or not buying what you plan to price and sell, you're too far down the path to consider what they value and how to communicate with them. The buyer is almost an afterthought in a lot of these journeys, but how does that make any sense? It doesn't, of course, but because we're a herding species, the most common recommendation feels like the right strategy. Humans have a status quo bias which makes us prefer things to be predictable and the way they are now, when someone is uncertain of what to do or where to go, they look to the herd to help them choose the right way to proceed. In the case of your customer, if you aren't the status quo and you don't know what is, and therefore aren't creating language to nudge them to make a new decision to buy from you, they likely won't. In the case of you as a professional setting your prices following the herd's big to small approach will leave you with a very reactive strategy where you follow a leader who potentially doesn't know what they're doing any more than you do. Remember this, just because everyone else is doing something a certain way doesn't make it right. So this may leave you wondering if we don't start from the broader market and narrow down, where should we begin? The answer lies closer than you might think with you in my years of experience, I have found that one's own mindset can be the biggest hurdle to implementing a successful pricing strategy. If you work on a team, this is the collective you anyone involved with coming up with the pricing strategy or selling the product or service to your customers, clients, members, patrons, or whatever other term you use. So you know I'm using a lot of these interchangeably here in the episode and throughout the book. So if I say clients and you have customers, know that it's all the same in what I'm talking about. It all applies. So why do you matter? As I already said, when you're not fully on board and confident in your pricing, it shows that lack of confidence will impact your buyers. I liken it to how a dog can smell fear. If you aren't confident in your pricing, the buyer picks up on the seemingly imperceptible hints that something is off. It can make it so they're more likely to ask for discounts, hesitate to buy, or even go to a competitor when they really wanted to buy from you. The wrong mindset around pricing and how you communicate can derail everything. Establishing confidence and the right mindset around pricing is the most important piece of the puzzle and the one no one else talks about. So we start there. Next we turn our attention to the customer, aiming to gain a better understanding of what they truly value. Then we zoom out to the market and your competition to get a better understanding of that customer journey and what they're using. Now uncovering your hidden competitors before considering your own company. Once you've looked at your company and it's time to choose the specific product or service, you'll focus on your best offer. And once you know the focus, the final chapter of Part two is looking at the numbers to ensure that whatever price you choose for your best offer will be profitable and well aligned for your business and customers. Once you complete your solid foundation in Part two, you're ready to move on to applying it in Part three. This begins with my it's not about the Cookie framework, which looks at six categories of behavioral science that you need to consider when applying everything you completed to create the foundation of your brainy pricing strategy. This framework has been featured in all three of my books and there is a different way that it's applied and talked about here. So the same framework works in every way that I work with clients and customers and in the books of how we Go to Apply Behavioral Economics into business. So that chapter on the framework, while it's familiar, it's going to be very laser focused in on pricing. It includes tips for applying each of the six categories to your strategy, showcasing how they can stand alone as well as be combined to fit any business. And good news, this upcoming Tuesday's episode coming out in just a couple of days is doing a deep dive on the it's not about the cookie framework for pricing when it was very first introduced. I'm refreshing that episode in tandem with the book launch so you can hear a little bit more about that coming up in a couple of days. So next we look at the choice. Including behavioral economics in your strategy provides a significant value and differentiation. One way we do this is by encouraging you to consider the choice architecture, which is a crucial aspect of behavioral science. We will discuss how you are a choice architect and the immense value of properly structuring a choice. Most advice you see out there will skip over this, mostly because they don't even know that it exists. And that's a huge reason why many businesses struggle with pricing and sales. You will be amazed at how different everything feels when you understand and consider your customer's choice through this this lens. And that's even if you've invested in pricing and taken a course even before, or you've read all the books and articles, this one is different because of how it layers in choice architecture nudges and behavioral science in a way that is specifically catered toward your small and mid sized business pricing strategy. Once you've gone through the framework and the choice, I give you specific tips for presenting your offer in the most common scenarios, including in a chart, and that's when you have a summary of multiple items next to each other. We see charts on websites and brochures and things all the time, also in written descriptions, which are usually presented stacked on top of one another with more detail about each item, perhaps in an email pitch. And we need to change the way we order things and how they're discussed. It's different in each of these categories, as well as the third item, which is in a verbal script, which is used for sales pitches over the phone or in person, as well as for use in things like video over the years, I have found that these three tools can be applied to fit almost any situation where you need to present your pricing. They can work together or alone to give your buyer the information they need to decide. Creating all three in advance will ensure you're ready and confident whenever your potential purchaser asks for more information. Having completed and polished materials ready when someone asks helps with that herding instinct we talked about earlier. The customer's thought process goes something like this. If you have everything ready, it's probably because other people have asked similar questions and if you continue to use those items, it's probably because they work. This train of thought also makes it easier for someone to feel safe buying from you, whereas the opposite of oh, they don't have anything ready to send, I guess they don't sell a lot. Maybe I should reconsider is definitely not making it easier for them to buy from you. To solidify what you've learned throughout the book and inspire you with what's possible, Part three closes with four case studies to get your brain buzzing on how you can apply all this to your company. All are well known global businesses and are chosen so everyone should be able to find at least one that resonates with their specific business type. There's one quality product based business, one quality service based business, one value product based business, and one value service based business. And as I said, the episode Next Friday is about the quality versus Value business type and how to decide and what they mean and all of that in case for when you want to check that one out. And of course you'll be able to read about it in your copy of the Truth About Pricing. You may have noticed in this episode. I use the term customer a lot, but know that this book is for all kinds of businesses. Product and service based, virtual or brick and mortar quality or value large and small. Whether you have clients or customers or members, sell products or services. The book is made for for you and I call out the specifics when they matter. Like in the numbers section, it's divided into product and service based businesses and there are several points along the way where I call out the difference for quality and value based businesses, but for the most part the psychological and behavioral considerations are the same across the board. Before we complete our journey together in the book, hopefully the first of many as the Truth About Pricing is intended to support you, again and again we bring it back to you. Remember, your mindset is the most important thing. So the book closes with some common pitfalls and brain traps to avoid, with tips to ensure your new behavioral pricing strategy is as successful as possible. And as I mentioned, there's also that in a rush chapter which is available for everyone who realizes they have to get something within a week or so, a really fast turn, the book is written with the idea that you can get the pricing all done and optimized and be confident within 30 days. It of course takes some work and focus no matter how long it takes, and you can approach it however you want. You are the boss of you here, but I know with pricing because it can be easy to bike shed and let it drag on for a long time and also to be where we have to kind of skim and make just a couple decisions and jump in on what feels easy. I wanted to give some sort of a guide in that 30 days or less process to approach the book to help you feel confident in moving forward. And if you know you have to streamline, there's a chapter giving you the most vital questions, chapters and steps to get something better than the dollar less than our competition approach I know you would end up with otherwise. It of course isn't as robust and valuable as if you go through the full book or else I wouldn't have written the rest of it. So there are some steps and tips to help you plan and really actually go back and complete the full process within 6 months after your launch or whatever it is that has you in a rush so you get the full value of including psychology and behavioral economics into your pricing. Now you know I love a freebie, so there are of course some complimentary items including a virtual glossary and a pricing mastery checklist which you can get for free along with the book by visiting the brainy business.com pricingbook and there is a hyphen in there so it's pricing-book. There's a link in the show notes to make it easy for you. You can also go to get a free sample chapter at that page if you want, and you can read one of the chapters before jumping in and buying it, or while you're waiting for yours to arrive in just a few days. Again, that and more details on the book are waiting for you at the brainy business.com pricing-book and there you have it. That's what you can expect from my third book, the Truth About Pricing, how to Apply Behavioral Economics so Customers Buy, which is on sale now on Amazon, Barnes and Noble Bookshop, Booktopia Book Depository, wherever you buy books. Yes, it will have an ebook and Audible version, though I don't know exactly when those will come out yet. If trends hold, Audible is usually at least a month after. As with some of the international editions, which some come right around the same time, some are a month later. It's all unfortunately a bit of a mystery sometimes, but keep an eye out. The good news is you can pre order at any time and it will arrive when it's ready. And just so you know, just like the first two books, I'm not the one reading the audiobook. I did try. I try every time, I promise. But it definitely is still awesome. And if that's the way you like to learn and hear things, which is very likely since you listen to the podcast hearing think that is valuable and possible for you and it will be available. The book does have a lot of tasks and things to do, but you don't have to. It's not a lot of charts and things that you have to see to where it would be a detraction to have the audiobook, if that is your preferred approach. There are links to order your copy of all my books, including the Truth about Pricing in the show, notes for the episode, as well as links to related past episodes, episodes, those other pages I mentioned, and a full timestamp summary of the episode in the app you're listening to and@the brainybusiness.com 355 I'm so, so excited to have this in the world. I feel like I've said it a hundred times now, but I just can't stop because I know how valuable and important pricing is to business of all sizes and types and how much of a struggle it can be for people. I'm so excited to to have so many people, anyone from around the world to be able to pick up a book that can help them to implement this stuff that I have seen change businesses and business owners again and again and again. I hope the information in this episode got you excited to order your copy of the Truth About Pricing today. When you do, will you do me a favor? Will you share about it on social media? You can find and tag me everywhere as the Brainy Biz B I Z. And please do use the hashtag Truth About Pricing when you share it to help spread the word and excitement about the book. We're also using the hashtag Pricing Questions which you can use when you have a question about pricing and can follow to learn all about what questions others are asking and see my answers details on those in the show notes and in the book as well. Thank you so much to everyone who's already pre ordered. It's been awesome to see traction. Already the Truth About Pricing has hit it a number one new release status in multiple categories on Amazon including business purchasing and buying many weeks before it was even available, which is super cool. And thank you to the early readers and supporters who provided kind words and endorsements including Scott Miller, Nir Eyal, Robert Cialdini, Phil Agnew, Vanessa Bonds, Amy Bucher, Zoe Chance, Nuala Walsh. So many amazing people and too many to name here, but thank you all so much for everything. You're amazing. And of course to Kwame Christian who was kind enough to write the foreword for this book. Thank you for your kindness and support. I appreciate you more than I can say. Such an honor and what an amazing ride it's been getting this book ready. I can't wait for you to receive yours and to hear what you think. Again. There are links to order your copy of the Truth About Pricing, maybe even one for a friend in the Show Notes when you share about it on social media, please tag me the Brainy Biz and use the hashtag Truth About Pricing. Thank you, thank you, thank you for all your support over the years. This book wouldn't be here without all of you. Again, get the freebies and links to the book and hashtags in the show notes for the episode which are found within the app you're listening to and at the brainy business.com 355 and just like that episode 355 all about my new book the Truth About Pricing how to Apply Behavioral Economics so Customers Buy is done. Join me Tuesday for another Brainy episode of the Brainy Business Podcast and to celebrate the book launch. It's going to be a lot of fun. You won't want to miss it. Until then. Thanks again for for listening and learning with me and remember to be thoughtful. Thank you for listening to the Brainy Business Podcast. Molina offers virtual strategy sessions, workshops and other services to help businesses be more brain friendly. For more free resources, visit the brainy business dot com.