MBA1281 Nail Your Value Metric and Make More Revenue

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Visit Dell.com deals. Hey, welcome to the Hundred Dollar MBA show your business coach on the go every day with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of the Hundred Dollar mba, the company business training and community online. And in today's lesson you will learn how to nail your value metric and make more revenue. Value metric is a term I learned from Patrick campbell over at ProfitWell and it talks about or it's all about what do your customers value? What are the variables you can play with so you can offer more value and charge for that value? People are going to be more willing to pay for something they see value in. A simple example is airlines. You know airlines charge for a ticket for a flight and every seat on the plane is getting to the same destination. But people are willing to pay a bit more if the seat has a bit more legroom or they can board early if they get lounge access if their seat turns into a bed. These are value metrics. Comfort, convenience, prestige that customers of airlines are willing to pay for. So in today's lesson we're going to talk about how to discover and nail your value metric. So a you're giving the value that customers want. B you're pinning that value to a price so you're not just giving it away and see how to leverage that so you can be able to make more revenue per customer every single time they visit your business. When I learned this concept, it really changed the game for me when it comes to pricing in business. It's definitely a mind shift and it's had such a positive effect on our business. I'm so happy to be sharing it with you today. So let's get into it. Let's get down to business. Whatever your product or service, you really need to take the time to to nail your value metric. And this could take hours, it could take even days sometimes. Because as business owners, sometimes we're so in the weeds of building our business, building our product or service, that we forget to take the time to say, hey, what do people actually value? What do they actually want? What are they looking to gain? What's the outcome they're looking for and what are they willing to pay for? Some of us, when we offer our products or services on our pricing page, we set up our plans, we set up our bundles in a way that doesn't make sense to the customer. Customer doesn't understand, why am I going to pay more for that? I don't see the value. That question, why am I going to pay more for that? Happens when they don't see the value. I refer to the example of the start. When it comes to airlines, regardless of if we actually buy a business class seat or a premium economy seat or extra legroom seat, we see value in that. When you walk on the plane, you can't deny that that looks like a better experience for the next odd hours. So the customer understands why it would be more expensive, understands why the airline would charge us more for those seats. It makes sense. This is a very simple example, but it kind of paints the picture. Ask yourself, in your own business and products, does your pricing make sense? Do your packages make sense? The more expensive stuff, what are they paying for really? What are they getting? Do they really want that? If you're selling an online course, for example, everybody's looking to learn something that's really the base value. That's why you're selling the course while people are interested in the course. But beyond that, if you had a second tier in that course where you're going to charge more, you're going to add something to that course, add something to that tier to charge more, what is that something? What is that thing you're going to add? And this is where your value metric comes from. Now, your value metric could Be several things. In this example, they're interested in the course that they're looking to learn something new. But if they're looking to implement quickly, that's a value metric they have. I want to learn, but I want to implement what I learned quickly. I'm willing to pay more for that. So if you can offer templates, for example, that would increase the value and therefore be like, I can see why I would pay more for that. You want to take it to a next level. Well, implementation is important, but they also want accountability. They want to make sure they actually finish this thing and make it happen. And that's where maybe a slack group or a Facebook group or a coaching call or group call would have more value. So it's not only just videos and some workbooks. I'm willing to pay more for some accountability. If you want to take a look at a really good example of this, of finding a value metric for online courses, check out Brian Dean's courses. He's over@backlinko.com I'm not sure if his courses are public. I'm pretty sure they're not public.

He.

He launches them, opens enrollment for a period of time. But if you're on his newsletter, you will be informed when the next course opens. And check out the different tiers for his courses. He's nailed his value metric when it comes to courses. So one of the things you need to start out with is a blank piece of paper and asking yourself this question. What do my customers value? Why are they purchasing my product? What are they trying to accomplish? I'm going to give you another example. I. I love audiobooks, okay? As a reader of audiobooks or as a listener of audiobooks, I should say I enjoy quality books that are narrated with great narrators. Now, that's a standard. That's what I go to Audible for, for example. But Audible has two different plans. They have a monthly plan and they have an annual plan. Audible understands the value metric of their listeners. The monthly plan has one book a month, and you pay a certain amount of money and you get one credit for one book a month. But the annual plan gives you 12 books for year. You pay an annual price, which is more expensive at the start of your subscription, but you get all 12 credits at once. Now, on the surface, you're like, well, what's the difference? I can just get one every month and that's equals 12. And that's the same thing. No, it's not the same thing. Because if you love audiobooks, you're going to listen to more than one book a month. And you're not going to want to wait until your month is up to have that extra credit to get that one credit for the next month. So Audible understands that value metric and, and says, hey, we want to push you towards the annual plan, so we're going to give you that flexibility to have as many books or 12 books in one shot. So you best believe I have an annual plan because I want to listen to more than one book per month. It takes me about a week to 10 days to finish one audiobook when I, you know, go to the gym or commute. So I can at least devour two solid audiobooks a month. And this really calls to my value metric, my value as a customer. So what happens if you don't nail your value metric? What happens is you never get any expansion revenue. You never get any upsells. You never get customers buying beyond the minimum. And what happens is that you never actually grow rapidly. People don't see the value of buying something that they don't see value in. They don't see the value of going at a higher tier, so they go with the lowest tier. Another way to nail your value metric is to ask yourself, where is the ROI here for my customer? How are they getting an roi? A return on investment? I'll give you an example from my own company, Webinar Ninja, our webinar platform. Our users run webinars to acquire customers, to make sales, to retain customers. And the more people register and attend their webinars, the more revenue they make, the more customers they keep. So the value here is more attendees, more people being a part of my webinars. So I'm willing to pay more if you're going to allow me to have more people on those webinars. So our plans will be split up into live attendee numbers. So a maximum of 100 attendees or 300 or 500 or 1000, the customer sees the value there. Hey, the more attendees I get, the more customers I can make. I'm willing to pay for that because I can get a return on investment. I'm paying for access to the software that's allowing me to make more money. So ask yourself, what is a return on investment for my customers when they use my product or service? And how can I take that information and break it up so I can give it some value and charge them for it? When you do this, you're actually doing your customers a favor. You're actually only charging them for the things that they value, rather than charging them for things that they don't value. And when you please your customers by giving them what they want, they'll keep coming back and keep paying for your service or product.

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Now I know you're excited now. Now that you are realizing, wow, I gotta nail my value metric. This is where I'm gonna be able to leverage my products and services and my upsells and my other packages, my other tiers. One more tip. When it comes to value metric, it's okay to be transparent as well. To say, hey, we're gonna charge more for this because it costs us more whether it's server space or time or manpower. That's why a lot of companies on their very top tier plan include a concierge service where they actually get a coach, somebody who gets them onboarded to the product or service. You wouldn't expect that in a basic plan. So don't include it in any of your basic plans. Include it where people are going to be paying so you can actually recoup that investment and the customer understands, hey, this costs money, costs time. And by the way, when you tier things like this and you have these value metrics nailed, you have these extra things of value for your customer that they value. You can use them as leverage for promotions, for sales. You can include these extra value items at a discounted rate as an add on, as a last minute deal. Hey, just like the example I used at the start of this episode with airlines, they do it all the time. 24 hours before your flight, they'll send you an email and say, hey, would you like to upgrade to business or the next class up, first class for X amount of dollars extra? Or you can choose your price and you can win or bid for it, but you can't do that with things that people don't value. So you gotta nail what they value first. Thank you so much for listening to the hundred dollar NBA show. If you love what you hear, hit subscribe right now on whatever you use to listen to. Podcasts, we're on em all. Stitcher Radio, Apple Podcasts, Spotify, Overcast, Tunein Radio, Himalaya, you name it, we're on it. By hitting subscribe, you make sure that the latest episode gets downloaded to your device automatically so it's ready for you to listen to wherever you are, whether you're on the Internet or off the Internet. It also gives you access to all our archive episodes, over 1200 episodes. The only way to have access to those is to hit subscribe. Before I go, I want to leave you with this. There are certain things that you need to take the time to think about, decide and nail, and this is one of them. Your value metric. This is really critical to getting your pricing right, to maximizing your revenue. And for many of us, if we haven't done this, and we do this in our business, it can have a tremendous effect on our sales goals. I've said this several times on the show, but pricing is one of those things you're gonna have to experiment with. Don't be afraid to change things and try things. If you're worried about your current customers, just make sure it applies to only new customers. Test things for a month, see how it goes. See your revenue numbers. That's the best way to find out. Thank you so much for listening. I'll check you in tomorrow's episode.

I'll see you.

I'll see you then. Take care.

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