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Amanda Northcutt (00:00) Hello, you're listening to the Level Up Creators podcast. Amanda Northcutt here, our founder and CEO. We help digital creators and thought leaders like you create monthly recurring revenue and we are so glad you're here. Welcome. Today, my brilliant guest and I are going to peel back the curtain on how to properly price your products and services. Pricing is a massively underserved and undervalued topic in the creator economy. So I'm kind of extra excited for today's conversation. And speaking of which, my guest today is Mr. Mark Stiving, one of the foremost pricing strategists in the world, coming to us today with decades of experience behind him. And we're going to unpack how creators and digital thought leaders can price like the pros. And lucky us, Mark loves subscription model pricing, which as you know, is your ticket to earning monthly recurring revenue, the holy grail of business where both you and your customers win big every single month. Mark is absolutely masterful at helping increase profits by teaching others how to price, package, communicate, and sell value. You're going to hear that word a lot today. Mark has a PhD in pricing from UC Berkeley and has authored three books on pricing, one of which is all about subscription models. Mark has unique Swiss army knife of skills and is just so damn good at his job, not only because of his pricing expertise, but because of his depth and breadth of knowledge in marketing. positioning and product management. Welcome Mark. We are so glad to have you today. Thank you, Amanda. You read that just the way my mom wrote it. Nice. I like that. Mark's a funny guy too. So it is going to be a good conversation. As I mentioned in the intro, pricing is not discussed very much in the creator economy and personal branding space, aside from how to price speaking gigs. So we have kind of a lot of ground to cover. Let's dive in. So. Mark, could we start with you sharing a bit more about yourself, your background and how in the world you landed in a career in pricing and with a specialization in subscription models to boot? Okay, this is about 20 stories in a row. So let's try to keep it really short if we can. I started in God, I remember going to the grocery store when I was 10 years old with my mom and I would see prices that ended in nine, right? So 69 .99. And I always wondered why the companies do that. Do they think we're stupid? We know 99 is really a dollar. So what's the big deal? 20 years later, I was in the doctoral program at Berkeley and I had a chance to play with scanner panel data. Now this is the data that grocery stores collect when we use our loyalty cards. And I was able to test whether nine cents works or not. And it turns out it does. And it works because we are lazy subtractors. And I just became a to understanding how people use prices to make decisions. And by extension, then it runs right into, well, how should companies make pricing decisions given that consumers are making price decisions or buyers are making price decisions? And so that's just where my career came from. I just, I love the concept of pricing and understanding it. I felt, I'd say I fell into it out of curiosity, but... Once you get in it, you realize it is so incredibly powerful for every company and so few people understand what's going on. So I don't know how I lucked into this, but I did. I think that's so interesting. And I love that you go all the way back to going to the grocery store with mom. And, you know, I knew what I wanted to do when I was 16 years old. And I did not know until I was well into adulthood that that was wildly uncommon. Like nobody knows what they're going to do at that age and then actually kind of sticks with it. but you knew from a very early age and it sounds like you're kind of an insatiably curious person too, though. No, sadly, I didn't know what I wanted to do. So I have been a failed engineer, have a degree in electrical engineering and I hated it. I had a shift transferred into sales and I was horrible at it. I got a PhD and became a professor, which I don't know. There's the only thing worse than being a professor is teaching elementary kids. I gotta tell you college kids all they want is a grade a good grade without doing any work And I hated it. It was hard And so I love what I do now because now all I do is I work with professionals and they actually want to know what I know So it's it's way more fun than the being a professor Yeah, I believe that for sure. I having some good friends in academia, I can, I can echo that sentiment for sure. Okay. So maybe you, you took a meandering path to get to where you are and you can point that back to some points of curiosity in childhood. And now it probably all makes a lot more sense, in your mind, but yeah, we do talk about most of the people that have on this podcast have taken like a wildly nonlinear path to get to where they are today and finally found what they actually love doing and are really good at. in applying that skill set in a way that they enjoy. So I like that. I like that you tried a bunch of other things. Electrical engineering sounds a little bit out of left field, but we'll have to come back to that another day because we got to talk about pricing today. I do think you are a fascinating person with a pretty interesting career and stories and the clients that you work with are wow, you know, they're huge. Okay, so we want to talk about how to apply your expertise and experience in the creator economy specifically for what we call digital thought leaders, people with personal brands. You know, and the historical model for monetizing a personal brand is speaking gigs, book deals, maybe some, you know, high ticket consulting gigs, like one -on -one, which is all well and good. But I think there's a better way to do it. And it's a yes and not an either or kind of a thing. And so that is digital products and services. And this is kind of a new for a for it. And in the last decade, at least for sure, it's really risen in popularity since COVID. And that is monetizing your thought leadership through things like courses. Courses in particular are super, super hot. I don't love courses because creators spend months and months and months figuring out the technology and the marketing and putting together course modules and figuring out video editing and hosting. And it's a huge pain. And they go through this really arduous process of a launch. And sometimes people do really well in a launch. They might make up to, you know, a hundred thousand dollars or something like that. Most sit around like 10 to 20 to 30 ,000. but then everything kind of falls flat. And so this is why I'm such a big fan of a subscription model, because we're going for long -term success, not huge peaks and then massive long low valleys. we're going for consistent income every single month to replace corporate income and beyond. So. Knowing that you and I both have a deep love for subscription businesses. I know you have an emphasis in SaaS or software as a service. And that is the world that I have come from. And now applying those skills over here in the creator economy for things like membership products, masterminds, paid newsletters. And then one of my very favorites is small group, high ticket coaching programs. And so if we could help sort of like transfer some of our knowledge today, yours in particular about. How in the world to even think about and consider pricing for digital thought leaders who are monetizing their knowledge, expertise, and their area of passion. That would be, I think, a home run for people listening. But let's start kind of with a high level overview. Let's go with the 10 ,000 foot bird's eye view. What are the most common pricing models that could be applied to digital products? Yeah, so can I start, first off, quick caveat. I am not an expert at the creator marketplace, as you know. Right? Because you know my business and I struggle to figure out how do I do exactly what we're going to talk about today. But besides that, I'll pretend like I'm really good at this. I do know SaaS really well. We're going to figure out how to apply it to creators and thought leaders for a second. From a pricing perspective, the first thing I want everybody to realize is that there's only one pricing strategy that makes any sense at all. And that is called value -based pricing. And I'm going to define value -based pricing for you. It means charge what a customer is willing to pay. It's that easy. Now, by the way, that's impossible to do. Nobody's ever going to tell you how much they're willing to pay. You will never know the answer to that question. But when we take that as the attitude, that's why we price the way we price. Someone's willing to pay this. Then now we can think about pricing very differently than if we were doing cost plus or competition -based pricing. So we're thinking about how much are our customers willing to pay. In the thought leader space, it is, I'm sorry, the question that I'm at right now is what types of models? So there are many types of models we could use. Obviously, in traditional businesses, we have transaction -based models. And when the company or the world moved to SaaS, we came up with a new phrase or a new term, which is, is surprisingly valuable in all fields. And that's one we'll call a pricing metric. And a pricing metric says, what do you charge for? So prior to SAS, we would always charge by the unit. So I would charge by the hamburger, or I would charge by the bicycle. Or if I was in professional services, I would charge by the hour. So what do you charge for? And these things are pretty common. We go to SAS. And in the world of SaaS, suddenly Google is now charging by the click on ads, or Dropbox is charging by the terabyte of usage of disk space, or LinkedIn is charging by the number of in -mails you choose to use. And so you step back and say, wow, you can charge for almost anything. How do you make that decision? And that's where the pricing model really fits, is what are we going to charge for? So we could charge a one -time fee. So we do a keynote speech, we charge a one -time fee. That's what the price was. Got it. If we have a subscription program of some sort, we could charge a monthly fee and have the same monthly fee. Or we could find a usage -based model. How much are they using? This is a Dropbox type or LinkedIn type model. How much is someone using our product? And we could choose something to charge on those lines. Now what's really fascinating, Is that you probably think you have the right pricing metric today, but I would recommend you think hard about it because the right pricing metric can totally transform a business. And let me give you an example. Do you remember Blockbuster? Are you old enough to remember Blockbuster? absolutely. Every Friday night we went to Blockbuster. Absolutely. So, so then you remember when Netflix decided that they were going to rent DVDs by the month. So it was no longer, let me go out and get it one by the day. It's I've got a monthly subscription and now I can have three DVDs at a time. And so they just think about what they did. All they did was change the pricing model. Cause you're still renting movies and watching them overnight and returning the movies. But they figured out how do I charge differently for it? And they became wildly successful. And oftentimes we see this when we see, when we see companies changing pricing models in their industry. It has the ability to change the industry. When we look for these pricing models, what we're looking for is how is it that our customers get value from our products? And can I price in a way that's more tightly aligned with the way they're receiving value? Okay. I've blathered on way too long. Your turn. No, that's good stuff. And so, I mean, you're absolutely right. We're going from like commodity based pricing, pricing per unit. I think, you know, it's fair to call that a cost plus. model, right? So you have expenses in your business that it's called cost of goods sold. And it's the top of your profit and loss statement. And you got to figure out how much you're how much it costs you to deliver, manufacture, whatever the widget or thing or service that you are charging for, and then add a little bit of markup so that your business is profitable and make sure you're covering your marketing and advertising and staff and R &D and all those kinds of things, right? But that's a horrible way to price because you're always leaving money on the table if you're doing a cost plus model. And also I talk a lot about like competitor based pricing, like, I need to go look at my competitors and see what they're doing and I'll price like just a little bit lower than my competitors. So I think that people will buy from me instead of them. But in the creator economy, when people are really attached to an individual, that competitor based pricing really, really falls flat. And that's where the value value based pricing really has the opportunity to. massively increase your revenue and therefore, I mean, your profit in a business like this, when we're selling digital products, your marginal expense is teeny tiny to sell additional course licenses or membership licenses or access, monthly access to your membership program or mastermind. And so I love the purview of value -based pricing. I've been talking about that for a long time. And I know you're not an expert in pricing in the creator economy, but... No one is, I'm the closest thing to a pricing expert in the creator economy. And all we're doing here, obviously it's a new industry, it's a growth market. And so all we're doing, all we're able to do is learn on the fly and apply what we have that's established in other industries and overlay it and kind of taste and adjust until we're able to find something that works, right? But if we can help people today understand this like sort of paradigm shift from. cost plus pricing or a regular hourly rate that you feel like will be tenable to your customers or competitor based pricing. I think we're going to help listeners really pull away from their competitors. And so understanding the value that you provide to your customers is going to be kind of like your golden ticket here. So Mark, can you help people listening understand how do you determine the value that you're providing through say a membership community? Yeah, so let me start with one of my favorite fundamental concepts in pricing, and that is what I call will I versus which one. So when our buyers make decisions, they typically make two different decisions. The first decision, will I, so will I buy something in the product category? And then after they said yes to that, then they go on to say, OK, which one will I buy? Now, let's go through a quick example of that, by the way. Let's assume that your refrigerator breaks. You call the repair person, he comes over, says, this one's dead. You're going to want to get a new refrigerator. Guess what? You just said yes to the will I decision. Yes, I'm going to go buy a new refrigerator. And price doesn't really matter at that point. You're going to go buy a new refrigerator. Then what do you do? You go to the appliance store or you go to several appliance stores and you look at different brands and different styles and different technologies. And do I want water in the And all of a sudden price becomes a really big part of that decision. And what we tend to do is we look at whichever one is more expensive that we're looking at and we say, well, how much more expensive is it? There's that subtraction we talked about a second ago, right? How much more expensive is it? Is it worth it? And that's how we make that which one decision. Is it worth it? Okay. So fundamental concept, will I in which one? What's really important about this concept, is when sometimes people only make a will I decision. They don't go on to make a which one decision. My favorite example of this is if you're using an iPhone today, you're probably thinking to yourself, should I upgrade to the new iPhone 15 or not? But what you're not thinking is, should I upgrade to the new iPhone 15 or switch to Android? So you're making a will I decision. You're not making a which one decision. And. Just as a proof point, Android has 72 % market share worldwide in the mobile phones. Apple makes 85 % of the profit. And that's because it's a will -eye decision. There's no competition there. Now, the reason I went through that whole conversation with you is you brought up the word competition. But I have a feeling that there isn't much competition in our world. Every time I've ever hired a thought leader, joined a group, something like that, it wasn't, hey, should I join this one or that one? It was always, should I join this or not? Is it worth it or not? And what that says to me as a pricing person is if you raise your price 10 % tomorrow, it has zero impact on the number of new customers you win. Zero. Now you could double your price and that might make a difference or 10 extra price and that might make a difference. But small price changes make very little difference to whether someone says yes or no. Now, the next step is what is value? And can I assume that our thought leaders are B2B people? Because this is kind of important. Yeah, that's a good question. So typically the folks that we're serving in our consulting firm and in Level Up Creator School are going to be people with some level of like professional expertise. and coming from the corporate world, but they're not always selling B2B. Sometimes they are taking their skills and knowledge and expertise and taking it to directly to consumer. So B2B for anybody listening is business to business. So you are a person who is running a business as a creator or a digital thought leader, and you are selling into other businesses or people at businesses for the sake of furthering their business, right? And business to consumer would be, To Mark's point, like we go to Home Depot and we buy a refrigerator that is a business selling to consumers. So that is B2C. So I would say that the overall category of people that we serve, they are, they have business experience, but there is a solid mix of if they're selling B2B or B2C, that may be really unhelpful for what you're about to say, but. It is okay. I'm going to give you four steps and three of them apply to both. And the fourth one is really a B2B step. But let's talk about them. I frequently talk about something called a, I call it a value table. And it's a way for you to understand what is the value that you're delivering to your customers. And so when you start thinking about value, I give it four columns, four steps. The first one is, I call it the solution. Now the solution is your product. I always start with that because most people think about their product first. Chronologically, it would come second. But most people think about their product first, so let's start there. It could also be a marketable product feature, a feature that you love that you think, my gosh, this is something that people buy me because of this feature. Or I love talking about this feature because it's really valuable to my customers. So it could be a feature. It could be the product. But that's your solution. The next column is the problem. What's the problem that you're at that that feature solves? The reason you built a feature is because it's all the problem for customer. Otherwise you wouldn't have that feature. what I find, I don't care what size company, what person they have such a hard time articulating the problem that they solve. And they have this hard time because they have the curse of knowledge. Once you know something so well, you forget what it's like to not know it. And so you just can't imagine, this is the problem that I'm really solving. I oftentimes ask people, what's the problem that you solve? And they say, well, I help people who need a product like mine. Well, guess what? That's not a problem. Right? What's the problem that they solve? Once you can articulate that problem, by the way, you've got a phenomenal marketing message, market segmentation direction that says, hey, these are the people we go after because these are the people that have this problem. So that's really powerful for us. So if you find someone who has a problem and they buy your solution, what's a result they would expect to get? So that's the third column is result. Some people would think of that as an outcome, totally okay. So what's a result that someone would expect to get? And people buy things because you solve their problems or you promise a result or an outcome. That's it. So that's where value lies is in the problem. and the result. It doesn't lie in your product at all. So if you go pitch customers about your product and you know, I've got this seven step program and here's how I deliver it. Let me tell you, nobody cares. Nobody cares. What they care about is are you solving my problem and delivering me a result? And when you can articulate that, now you understand value. Okay, so I'm going to talk to B2B folks for just a second. In the world of B2B, if you are selling to businesses, I want you to think of the results column as a KPI or multiple KPIs. What KPIs are you going to move for your clients? So it could be, you know, what's our cost of goods sold? It could be what's our cost per unit. It could be what's our conversion rate. You know, whatever it happens to be, what are the KPIs you're going to move for your customer? So now let's go to the fourth column, which is value. In the world of B2B, Value is measured in incremental profit. How much more profit are you making your customer because they bought and used your product? And if you've defined these KPIs in the third column, then using business acumen, we should be able to take almost any KPI and say, how much more profit is that going to make this customer because we were able to do that? So that's what value really means. Now, in the world of B2C, If we were to go through an example, talk about my shirt for a second. So it's a nice shirt. It's an OK shirt. But what problem does it solve? Well, today it solved the problem that I was going to be on camera, so I threw a shirt on. So I had this problem. What result is it going to get? Well, hopefully, people will think I'm attractive, or at least they think I cared enough to deliver a nice presentation and share my content. Now, it's really hard to turn that into dollars. How much more money did did I make because I wore this shirt? And you know, you can't do that very easily. But what you could say is on a scale of one to five, how important is that to my life? And, you know, maybe it's a two, right? Maybe it's a three, but you could start rank ordering the different results that you're delivering and saying, how important are these results to our customers? And that'll give you guidance as to where it is you want to spend your time and your energy, your marketing dollars on what are the features I'm going to go push. Yeah, I think you're hitting a nail on the head on what I call foundational desires, kind of like over and over and over again. And you're absolutely right. It is. a little bit, not necessarily simpler, but it is more clear on how you should price B2B products because you're looking to capture a percentage of the value that you are passing on to your customers, whatever that, however that impacts their bottom line. Like you want to price your product so that you are enjoying in that success right alongside your customer at a rate commensurate with the value you are providing. So if you're a B2C purveyor of products and services, then you can think about, value you're providing. If it is something that saves money, that's really, really important, right? Like you can price based on value if it is saving someone money, but you're probably not going to help someone make more money as in a B2C way. That's technically like B2B and then that's highly quantifiable, easy, that's quantitative, like definitive measurement. But if you think about time savings, making people's lives easier, taking them from a state of maybe fear or anxiety or even like fear of failure is a huge one to a place of having clarity, confidence. And you know, I actually have, I have this whole chart pulled up right now because I'm giving a talk literally right after this recording. Okay. So we talk about this as a from to transformation. And so you're taking people from fear, guilt, shame, loneliness, boredom, inadequacy. Cannot read my own handwriting. weakness, lack of health, lack of education, overwhelm. These are all really, really undesirable states. And so if your product or service in the B2C world, again, that's your business directly to an individual consumer as opposed to a business, you're taking them from this undesired state to a highly desired state, which Seth Godin has talked about foundational desires for at least a decade. You're taking them to a state of belonging, confidence, control. Mark, you mentioned a second ago, like attractiveness and the perception of professionalism, right? With the shirt that the clothes that you showed up with today. You wanna take people to a place of knowledge, freedom of expression, freedom of time, additional resources, power, health, luxury, revenge, peace of mind. So these are all foundational desires. And so I think if you think about that scale you're talking about, Mark, that one to five scale, how important is it that a person go from a place of, fear to a place of confidence and I've removed their anxiety and I've enabled them to move forward in the world or get their kid a college scholarship or grow their Instagram account or their TikTok account or whatever the case may be. That's your value metric. How important is it to them that you can instigate this transformation? And I also love what you said about people don't care about your seven step program until you have explained the transformation you're taking them from this state. to this state and you're explaining the value outcomes and the solution. So what happens after you do my seven step program? Then and only then do you explain the packaging, if you will, of what the seven step program is and that the seven step program even exists. People do not care at all about that until they know what you are going to do for them because we live in a highly, a society highly driven by like, what have you done for me lately? What are you going to do for me? How are you gonna make my life better? So do you think that's a fair way to talk about pricing for BSC? Absolutely. So what I love about what you just said, by the way, this is B2B too. What you just said applies to B2B as well. But what I love about what you just said is that we think exactly alike. We just use different words. Right? I said problem result. You said from and to. Great. Right? Who cares? But the whole concept is... people have to resonate with the message that you're trying to deliver and you have to understand what you're trying to accomplish for your clients. Yeah. I mean, the best products and services in the world are simply well -packaged solutions, right? And so like in this world that I live in of digital thought leadership and the creator economy, they're packaged up as courses, memberships, templates, group coaching programs. Well. I mean, almost anything can come back to that, but individual, like one off digital products and then subscription products. And it's typically, not physical. That's the world of e -commerce, which I do deal in that world. Some, but people are not buying like physical widgets. They're buying solutions. I mean, really that's it. And then the packaging is templates, courses, memberships, and all that kind of stuff. so yeah, very important. And I think of the packaging as the proof point to how you delivered the, the result. Yeah. So you're. your solution is just, you want this? Okay, so here's how we get there. Yeah. So you've thought it through. You have your methodology. you've, you've thought through your course modules or whatever the case may be, you know, you've got your FAQs on your landing page that goes into a little bit more detail. But if you don't nail that from to transformation for the specific person that you're speaking to, the people who have the same problem, who have gathered around your probably social media accounts, who have signed up for your newsletter, you're speaking to that person. They have the same problem and you are uniquely positioned because of your knowledge, expertise, and experience to solve that problem. And again, the packaging doesn't matter so much. Although if you took a course and moved it to a small group coaching program, you can charge 10, 20, 30, 40, a hundred times more for that. So you got to think about how your packaging solutions up in the digital world in that way. Like. Courses are great in that people can pick them up and take them and you don't have to do anything else. You can set up automated funnels from social media to your lead magnet or your newsletter, nurture those folks and get them to buy your course. That's all well and good, but you are leaving so much money on the table. Whereas if you took that same course material and held a dozen people's hands through a 10 week program and charge them $7 ,500, we're talking about a completely different business, you know, at that point. And so that's where the packaging part. comes into play, but you can also just point that directly back to the value that they're going to receive. The perception of value is vastly different, right? And taking a course versus being handheld through a program. And that's a great segue to bring up this concept of packaging for subscriptions, right? Whatever that subscription looks like. And I've worked with many, many companies, software companies in particular, and they come to me and say, Mark, we want to move to a subscription. And And they want to move to a subscription because they like the valuations they get on the marketplace. But I don't really care, right? That's totally irrelevant. The only thing that matters is how are your customers getting value from your products? I think I said that earlier today. And so the question for a subscription is, are you delivering a continual stream of value? Is your customer receiving a continual stream of benefits? If you sell a one -time course, then I bought a course and I got value from the course and nothing, nothing against that. If I'm in a 10 week program or one year program where I'm working with you and other people that are like me, and it's almost like a group therapy session all at the same time, and we're helping each other. I'm getting value every time we meet. I'm getting value every time I talk with these people. And so we're delivering a continual stream of value. If you can. craft your packaging such that you're delivering this stream of value, then it's totally okay to price for a stream of value. And that is way more profitable than pricing for a one -time event. Amen. That's right. I talk about the commonality amongst all subscription products across industries, B2C, B2B2C, whatever it is, it's consumability, right? You are providing something that can be consumed, whether it is in mails on LinkedIn, or it is information that you're providing over time, or if you are showing up to a group program and providing advice that's relevant and taking people kind of on that from to journey over a 10 week or a 12 week time period, or in a mastermind. I mean, that is infinitely consumable because you have a host who shows up as the expert and puts the group together. But over time, the group and the participants become more important than the host. And there's infinite value to be had because each person is participating and you also have this amazing like positive peer pressure of staying in the mastermind once you have created those relationships and people know you and they're going to know if you duck out. Whereas in a membership product that's maybe 49 or $89 a month, it's a little bit easier to slip away if it's like a kind of a high volume thing. But we teach digital creators to get to know people in their communities. Like if it's a membership community, you've got to have three pieces of that. You have to have multiple courses, probably within your membership community for long -term success. So people can, even if they don't consume those courses, they are aspirationally wanting to consume those courses at some points. Like, I'm going to get to that. So I'm not going to cancel. And then the second piece is these live events. So you have to have, get people to show up on zoom calls and provide value and interact and build relationships. And then the third piece of that is a discussion forum community where people get to know each other. And it's sort of that mastermind concept on a, on a micro scale. And so, but if you have people just participating and they're getting to know one another, they're providing value to one another and you as the community host are coming in and providing value, infinitely consumable. And we obviously teach people to again, really, really build relationships and double down on the relationship component and how to exactly tease out value and dangle a carrot. So people stay for a very, very long time, but let's talk about something we haven't hit on. Yeah. And I think this goes back to what you were talking about at the beginning. Like we're making a choice that we are going to buy something and then we're selecting, right? Most of our clients don't have direct competitors and they know it. Whereas I think in the B2B world, we're very obsessed with what our competitors are doing. And there are probably people in the creator economy who have tangentially related products and services that may be considered competitors, but what creators don't think about, is the hidden competitor, which is I'm not going to buy anything. I do have this problem, but it's not painful enough yet that I'm willing to fork over my hard earned dollars to solve it. And so I think this probably goes back to your, your value table, which really quickly, I think I got this right. Problem solution results value. Did I get that chronologically? That's right. I usually teach it solution problem result value, but yes, solution problems. you. Okay. So you have to make sure that your problem, the problem that you're solving is painful enough that people will pay for you to solve it. Right. And so do you ever run into situations in all the consulting that you do where you're simply like, this isn't a big enough problem. This isn't going to work or you're not pressing on the right pain points. You're not using the right language. How do you address that? Yeah. So I often see that with small companies that are trying to start up and launch. where they think they've solved some major problem, but they're unable to explain to me why it's a problem. And so I just tell them, look, I don't think it's a problem. Right now, it may be a problem for some people and maybe they haven't been able to articulate it. Maybe they haven't found the right clients. But the great thing about people like me and you is we're not experts in your field. And so if you can't explain to us in a way that we understand what the problem is you're solving, you can't explain it to anybody. So we've got to figure out how do we dumb down the language? How do we get people to truly understand the value? But here's what I'll tell you what I find way more often is that companies underestimate the amount of value they're actually delivering. So if we say, here's what our value is and we can articulate it. And then we go out and talk to clients or we just start saying, what problems are you solving for your clients? And they start listing problems. And then we start calculating, well, how much did the KPI change? What was that worth to your client? We find out that we're delivering so much more value than we ever imagined that we were. And that's what builds up company's confidence to say, Hey, I can raise prices. It's not, it's not going to end the world if I raise prices. And so we ended up making more money because we do that. So it's, I would say the much bigger problem, more common problem, especially in the world of solopreneurs is we have a major confidence problem. that we don't think what we do is worth what we want to charge. And so I think value tables is a great way to say, look, here's what I'm really doing. This is very valuable. Yeah, I like that. And so that's imposter syndrome. Like that's part of an imposter syndrome is we hear a lot of times from prospective customers, like, I'm not an expert in that. I don't know enough to put together like a small group program or membership. I'm like, I will go through the proof points with them from their LinkedIn profile and what I've learned about them so far. And it's like, yes, you are an expert. Here's how we define that. And you have something to teach other people. You're already sharing that knowledge online. Here's how we can package it up as a solution. But yes, you have to ensure that you are solving a really painful problem that has enough prevalence within the people whose attention that you have, that some percentage of them will actually purchase it. And then that you are communicating that effectively. with this from here to here, the transformation and again, specific value outcomes and solutions. And then you can talk about the nuts and the bolts of your seven step program. We'll just keep coming back to that. But yeah, okay. So making sure you have a product, what we call this product market fit in the B2B world, right? And so it's making sure that the solution that you have come up with actually effectively solves a problem. I think most of y 'all listening do have that and you're probably just not communicating it. the right way. So I love, you know, Mark's value table. I use an image called the marketing onion and it just has three layers, but the outer layer, the least important layer is sort of the seven step program. It's, it's the feature list, right? It's the widget, it's the description of the packaging and the actual delivery mechanism. And the second, second step or second layer of the onion is simply like the value and outcomes. It's the description of the solution. And so, For us in like level up creator school for instance the solution is You will have a business that runs like clockwork and that's all great and that's good I've got your attention but what really matters is the middle of the onion and that's that from this state of Lacking clarity not knowing how to put all the pieces together having shame and guilt for your business not being successful to a place of confidence clarity success and nobody gives a shit about the what level of creator school is until they know I can do for them. What's that? There's a saying about this. it just came to mind. It's like, nobody cares how much you know until they know how much you care. Right. and so that's really, really, really pivotal in a B2C selling relationship, especially we're talking about people with automated funnels. If you're doing like a high ticket program, you're going to have to do sales, which come talk to me if you need help with that. but if you're not communicating again, that from two transformation and the value and outcomes, Nobody cares that here's how we do level up creator school and here's the actual modality and we meet together five times a week and we have courses and the community and we're all very supportive. Blah, blah, blah, blah, blah. people are going to leave your landing page immediately if they don't get that sense that you deeply understand them again on that foundational level. And this all comes back to value -based pricing, because if you're able to communicate that from two transformation, the value outcomes and the solution you're providing, you can find a value metric and that's kind of what this all comes back to. We're going to wrap up here soon, but I'm going to give you. I feel like we just started. I know you and I could talk all day. We've talked many times and we could just talk all day because we're pricing nerds and that's great and I own that. I'll wear that badge with pride. Okay, so say we have a creator who is creating a course. I know I don't love the whole like course model, but this is a good question. That is going to, you take the course and the value outcomes and solution is it's going to save upper middle -class parents six hours a week of household work and scheduling. It's going to make their life work like clockwork, right? It's going to save six hours a week. And let's assume they're making combined income of, you know, $300 ,000 a year. How do you price that course? Yeah, I don't think it's the way you think it is. I think it's going to be pretty hard to say, look, at six hours a week at $300 ,000, what $300 ,000 is the equivalent of 150 bucks an hour. So six hours is 900 bucks a week. And if I took that times 50 weeks, we're going to call that a thousand. So that's $50 ,000. So if I thought that they believed that and I could sell that, then typically you could get away with charging about 10 % of that number. Right? So, to the customer, that would be worth $5 ,000. But let me tell you why that's not going to work, if that's okay. Yes, it's willingness to pay. Yeah, it's willingness to pay and they don't believe it. Yeah. Right. And so what you have to do is have built up a confidence for them. Oftentimes I see solopreneurs build a funnel of products. Right? So I've got the very inexpensive product that gets them in. So here's the... the $30 book or the $20 book. And now you can see, yep, I actually know what I'm talking about. And now you want to apply that. Here's the $300 course that you can take. And now here's the $10 ,000 mastermind program you can jump into. But it's tough to get someone to say, look, here's my $5 ,000, go solve my problem. That's a big number to get someone to believe in early and quickly. Right. Yeah, it is. It's like, that's the correct way to think about it. That's the correct way to price it. But then we have to take into account industry norms, willingness to pay the belief in the outcomes, which, you know, a lot of that you can overcome with social proof and, and so testimonials, data, statistics, case studies, conveying effectively your level of expertise and like how you're doing this. So there's a lot of proof points to be had there that can overcome a lot of objections, but at the end of the day. No one's going to buy a course for $5 ,000. So you could think about packaging that differently, but if they were like, no, I want to do a course. That's it. I want to set it and forget it business automated funnels. I'm out. So I can save myself more than six hours a week, right? Cause I don't want to do any more of this work, but I've got the formula and I want to sell it. So what other considerations can this person take into account to come up with a starting point? Cause right. The best, the only thing we can ever do is make the best decision we can with the information we have at the time. So. How do you start? Yes. So this is so hard. What you're going to do is you're going to, it's almost like you're going to randomly pick a number in all honesty. You could look at other products that are in the ballpark and say, here's what these types of people charge. And so this is about where they are. What are, what do you think homeowners are paying for courses? And so you could come up with a number that way. The real challenge that you've got is. Sales are not going to take off as fast as you think they are and you think it's your price that's the problem And I can almost guarantee you it's not the price. That's the problem, right? It's the communication and the reach that you have to convince people that you're solving their problem And so regardless of what price you chose Your problem is figuring out how I'm going to sell this product at this price point I know that's a horrible answer and it's not what you wanted to hear but I but I could tell you if you chose $200, I could have justified 300. Right. And if you chose 300, I could have justified 500. So the price is almost a random guess. But once you've built up the funnel, once you've built up the ability to go sell the product, that's when pricing really matters to us, because now what we can do is start moving that price up and seeing the fact that it's not going to affect our demand very much or how much is it affecting our demand. And now we're making more and more money. This is a business. We don't know the numbers off the top of our head, but over time, we're going to get better and better at what it is that we do. I know that's a horrible answer. People don't want to hear that. Quick story. I wrote a book on pricing, my very first book called Impact Pricing. I get a call from someone who says, do you speak? I said, yes. They said, how much do you charge? I had never charged for speech in my life. And so I was like, let me get back to you. And I'm trying to figure out how much do you charge for a speech? And so just know, none of us know the answers to these questions, right? We, by the way, what I did was I charged 2 ,500 bucks. They said yes. And so when someone called the next time I said $3 ,500, right? It's like 25 works, 35 might work too. We're going to keep going. And, and so. Yeah. Don't be frustrated by the fact you don't know coming out of the gate, but manage the price over time. And that's where you're going to make money. That's the key. That's right. Looking at the data, looking at your conversion rates, looking at sales over time, getting feedback from customers, doing one -on -one interviews with customers, putting together as many proof points as you can and to elevate the perception of value. Social proof is one thing, but then we also have to do design and extraordinarily well worded landing pages and nurture emails and marketing messaging and your social media accounts and things like that. So it's. It's the whole package. I think, you know, if I were that person, I'd probably start at 499 or 599 and then go from there and maybe offer, you know, a three month payment plan or something like that to pay for the course, but increasing the perception of value, increasing your proof points, but always be pricing, right? Don't ever price a product and just leave it. Don't set it and forget it. You come out of the gate with the best you can based on the information that you have in the time. But then when you learn new things, you make new decisions based on that information. And that's. All businesses, right? It's like we're all working toward increasing conversion rates to make more sales, to make more revenue, to make more profit, to grow. And it's all about like identifying the little tweaks that you can make over time to adjust that. And pricing is the biggest lever that you can pull in your business. And so give it a lot more thought and consideration than you're giving it right now, basically. But all right, Mark, last question. If our listeners only remembered three things from this conversation, what should they be? man, what did I? What did I talk about today? We talked about value -based pricing, how value is, value -based pricing is the only strategy that you want to adopt, which is charge what a customer is willing to pay. Impossible to know, but it's the right attitude or the right goal. We didn't talk about something I thought we would talk about, and that is the whole concept of land and expand or win, keep, grow. And how is it that we get customers into it? I guess we did a little bit with the product funnel. But how do we get people into our world and then figure out what are the products and the platforms that we can use to get them to give us more and more money over time? By the way, we're delivering more and more value over time. Don't think we're trying to cheat them. Right. But we're capturing more and more of that revenue over time. And then finally, I think for any of our B2B customers, value is measured in incremental profit. And if you can't... figure out what the incremental profit is, or at least what the formulas look like. I mean, every company is different, but if you can't figure out what the formulas look like, then you don't understand your customers and your product yet. Amen. Amazing. Thank you so much for joining me today, Mark. Do you have a quick parting shot, anything else to say, and where can our listeners find you online? I do. Thank you very much for asking. So we built a special website just for you, by the way, and I've got to look it up real fast, so I'm going to tell you what that is in just a second. but when you go to the website, what you're going to find are three different things. One is a chart where I've created a, an exercise called valuable features. And this is an incredible, incredibly powerful tool for you to list 10 customers across the top, a series of features down the side. And then for each customer in each feature, how much value do they get? And as you start to do that and start to look through that, you're going to find. What are my customers like? I have different customers that care about different things. And how do we figure all of that out? It is amazingly insightful. There's also a way to download and jump onto the newsletter. And finally, there's a way to get to, if you want to book me for an hour or have a conversation with me, you can reach out to that. And by the way, the website that you're going to go to is impactpricing .com slash level up. And it is just for Amanda's listeners. Thank you so much. And I'm going to go through that pricing table or the value table exercise with my team and our next all hands meeting, which is next week. I'm pumped about that. Thank you so much. We know that your time is precious. We appreciate you sharing yours with us. We help creators like you at levelupcreatorschool .com where our team becomes your full stack team of advisors and also includes no fluff creator courses, a vibrant creator community and more all on a subscription basis. And as ever, we still offer consulting and implementation work through our consulting firm, Level Up Creators. See the show notes for more information and a suite of high value free resources. See you next time on the Level Up Creators podcast.