MBA2073 Must Read: Price for Growth by Jeff Robinson

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Visit Dell.com deals. Hey oh. Welcome to the $100 RBA show, making starting and growing a business a little bit easier every single 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 Webinar Ninja, an independent software company I started with my co founder back in 2014 and today's episode is a must. On our must Read Episodes, I share with you a book that I've read that has influenced me as an entrepreneur. I share with you its takeaways, its insights and why you should read it too. Today's must read is Price for Growth by Jeff Robinson. If you've struggled with your pricing, how much to charge, how to bundle your pricing, what packages you should offer, are you too expensive? Are you too cheap? This is the book for you. I was actually quite surprised when I read this book that this book is not more popular in terms of people talking about it. It's got a lot of solid reviews on Amazon, but when I dug into this book it really opened my mind to a lot of different ways to present my product, attract new customers as well as keep my customers. So much so that it actually influenced a major change in our business, Webinar Ninja and I'll share with you that in Today's episode I want to break down. What are the key things you should look out for in this book? What are the things that you should look forward to learning and how to apply in your business? And also, why is this book so controversial in business circles? In a lot of ways, it's bucking a lot of trends and being very contrarian. I'll share why and more in today's lesson. So let's get into it. Let's get down to business.

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Pricing and packaging your product or service can be a black box. You're not really sure what your customers are willing to pay. If you're charging too much, if you're charging too little. A lot of people think pricing is a guessing game. Well, in Price for Growth, Jeff Robinson's book, he breaks it down to a science. So I'm going to just jump right into it. One of the major arguments in this book is pricing for growth versus profit. A lot of companies, a lot of businesses try to get as much profit out of every sale. And I understand they don't want to undersell themselves. They want to make sure they're making as much money as possible every time they earn a customer. This is why you'll see a lot of businesses raise their prices continually. Because even if they raise their prices by 10%, that makes a huge difference for them in terms of profit. Jeff argues that this is very short term thinking and doesn't really increase the value of your entire business as much as it can. Pricing for Growth, on the other hand, takes in consideration that you don't live in a bubble, right? You don't operate your business without competition. It also understands the idea of leaving enough value on the table. This is something that I've been talking about for a very long time and when I read this in this book, I was like, thank you. This is such an important point that I need to share it with you in this episode in detail. Many companies, many businesses will charge just enough for people to buy and feel like this is an even exchange. There's not a lot of value on the table, meaning that the customer walks away feeling like a little hurt A little pain. We've all experienced this as a consumer where you bought something, you're like, okay, I get it, I have to buy this. This thing is pretty good. But man, is it expensive or man, I had to spend a lot of money for this. This really doesn't create a lot of brand affinity. This actually does the opposite. It hurts your brand. Your customers kind of resent you. There are products that I pay for right now that are really painful to pay for every single month. But right now I don't have a choice or the pain of switching is too much. But as soon as there's a solution that is just as good and they solve the pain of switching, I'm jumping ship. Okay, I can't wait. Especially if they are charging less. This makes me feel like they're giving me more value for my money. So following the blanket advice of increase your prices can hurt you because it can cause customers to leave. This is called churn. It can also cost customers not to buy any more from you. Now growth marketing is not saying that you should be rock bottom prices and you should be really, really inexpensive. It just means that you're pricing for growth, meaning you're allowing customers to come as they are where they're at and you're charging them for what they need. This allows them to feel like I got what I needed. I'd have to, you know, give up my, you know, first child for it. And it allows them to be content. And you have a reoccurring product like a SaaS subscription software, a membership, they are less likely to cancel because they don't feel like they're being fleeced. They actually feel like it's a good deal. They'll probably cancel other products before they cancel yours. So leaving enough value on the table is very important because one, it allows you to attract more customers easily. Your cost per conversion is much lower. When people look at your price and say that's a really good deal, that's a no brainer, I'm signing up versus having to convince people that your expensive prices are justified. Business in a lot of ways is a numbers game. You get a hundred people come to your page every day. You have a no brainer price. You might convert three or four. If you have a price, you're going to have to really sell and justify and have a long cycle of sales. It might take weeks before you can convince them, maybe months, even years. They're going to convert far less than your no brainer price. Now the key here is that you're not out of pocket. You want to make a profit, but you don't want to just totally kill the customer in that first transaction in your entry level. So if you're, let's say running an online course, right, you're selling an online course, there's no reason to sell it just for one price. Sell it in tiers. Give them the bare bones, give them something else for the middle tier like a membership to the community. And maybe the high tier also comes with some coaching. The point here is that you're allowing people to get started at a price they can upgrade later if they wanted to, that they can afford, that they can feel like, hey, this is a good deal. Now I really wanted to do this. Must read for Price for Growth because as you know, we're in a tough economic time globally. People say we're in a recession, they say it's going to get even worse. So people are going to be more reluctant to spend money than ever. Things are going to get competitive and if your prices are really high, it's going to get harder and harder for you to convert. There's nothing wrong with having a high price item in your suite of products or in your tiers, but allow your customers to start somewhere a little bit more reasonable. Now what's also shown in this book is that with growth pricing and you have like a range of pricing, let's say for example, you have a product that starts at $9 and then you have another tier for $30 and you have another tier that is $60. If somebody starts with you at $30, let's say they might upgrade to 60. But let's say they' tough financial times. When they go to cancel, you can give them an option, hey, instead of canceling, why don't you downgrade to the $9 plan. You'll get most of our features, you'll continue to get an ROI and all your data will be saved. And when things start to bounce back for you, you can go back to 60. This gives you options to offer your customers instead of you're just expensive. This prevents churn. This allows you to not lose a customer for life. They're still in your ecosystem, they're still using your product, they're still getting value. And you can even do things like give them a free month on their current plan before you downgrade them so that it kind of absorbs the blow a little bit. Most customers will really appreciate that and you just earned a lot of goodwill with one of your customers. Now also in this book, Jeff talks about discounting if you ever wondered, how am I supposed to discount or run sales or run promotions properly? Well, he walks you through it. He also has a chapter on negotiated pricing, meaning that when people negotiate a price, this is for consultants or coaches or freelancers or even products overall, he doesn't recommend it. Customers really don't enjoy negotiating and they don't actually feel good after a negotiated price. He says price negotiations add friction to the process. Really, just focus on solving your customer's problem. Find out what their problem is and make sure you can solve it through your product or service. If you could do that and show them that you can do that, price is less of an issue. And if you state what your standard price is to solve this problem, this shouldn't be a problem. Now, one other thing I would add to this is sometimes people will say, whoa, that's a lot of money. I can't afford that. My budget is xyz. Now, my answer to that is pretty simple. Listen, this is the price for getting the job done. I understand that you have a budget. One of the things that I offered in the past when I was doing freelance work is a pricing plan. They don't have to pay me all at once, but the price is the price. Pay me 50 upfront and 50 at the end, or 30% now, 40% in two weeks and then another 30% at completion. The point here is that maybe it's not a pricing issue, it's more of a timing issue. And that's really what I like to offer. But I don't like to wiggle with the price and try to haggle and negotiate. Uniform pricing, or discounts for that matter, are different. And he goes into that in the book. He also has a chapter called the Five Sacred Metrics to Pricing Success. This is basically what are the numbers you got to track to see if your pricing is working. This is incredibly important because as you start experimenting, changing things, improving things, you want to see the results and you want to know what you should be looking for to see if, hey, is this helping my company grow? And it's not just how much money you make.

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To wrap today's Must Read episode Price for Growth by Jeff Robinson this is actually a very easy to read book on the topic of pricing. Most pricing books that I've read are very, very dense. They're very hard to understand. There's a lot of jargon, there's a lot of charts that are hard to follow. You kind of feel a little bit out of your depth, and maybe it should have been a mathematician before you read this book, but not this. This one actually talks to you with the understanding that, hey, I'm a business owner. I need to know how to do this as a business owner, not as a pricing expert. Now I got to warn you that when you read this book, it's going to challenge some of the things you thought were the right thing to do when it comes to pricing. It definitely challenged me, but after I read it, I gave it some thought and I started to run some experiments, discuss it with my team, and it actually impacted our business in a big way. We introduced a new plan on Webinar Ninja to allow people to start running webinars and workshops at a low price point. We launched what's called the basic plan. It's only $29 a month. AM I making a killer profit on this plan? No. But the point of the plan is not to make money hand over fist. It's to help my audience get the value out of my software to see the value themselves. And once they do, they'll happily upgrade to other plans. And so far it's going really well. Our conversion rates on our sales pages have increased over 27%, and because of the low price point, people are preferring to go annual and therefore lowering our churn A little bit of a surprise benefit we got out of that. I'll continue to monitor and maybe I'll check in later with you guys on the podcast to let you know how it goes. But after reading this book, I realized, you know, I want to make sure that anybody at any budget can get started without feeling like I really need to shell out on money. I wanted to make sure that they can get a lot of value for a reasonable price, leaving a lot of value on the table. Thanks so much for listening to the 100 OMBIE show. I highly recommend you pick up Price for Growth by Jeff Robinson. It's available on Kindle and currently I believe it's on Kindle Unlimited So if you're on Kindle Unlimited, you can get it for free, but it's well worth a read. But it's one of those books that you read maybe four or five pages, pages, and it gets you thinking. You put it down, you start thinking, you start taking some notes, you start thinking about how it applies to your business. Then you're like, okay, let me pick it back up, read it. So it's not like a quick read, but it's definitely one you should read. Thank you so much for listening to the $100 MBA show. If you like what you hear, hit subscribe or follow on your favorite podcast app. Do that right now. It's the best way to support the show. Also, leave us a rating and review. We'd love to hear what you think of the show. Before I go, I want to leave you with this. You have to work really hard to get people to your website. Your marketing efforts, social media, you're putting out content, you're speaking on stages, you're doing webinars, you're doing all kinds of things to drive traffic to your website. Capitalize on that traffic by making sure you get your pricing right. You don't want people to get to your website. Check out your pricing page and be like, you know what? Doesn't seem like a good deal. No, you got to secure those people. You need to get those people as customers, get them started, get them getting the value that you offer. This is why investing in your pricing and your pricing page really matters. Thanks so much for listening to the $100 MBA show. I'll check you in tomorrow's episode where I share four cold emailing tips for those who hate cold emailing. I'll check you, then take care. Of.

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