Unlocking the Secrets to Premium Pricing in Professional Services

Unlocking the Secrets to Premium Pricing in Professional Services written by John Jantsch read more at Duct Tape Marketing

Marketing Podcast with John Jantsch In this episode of the Duct Tape Marketing Podcast, I uncover the intricate world of pricing for professional services. Pricing in the realm of professional services can often feel like a nebulous task, as unlike tangible products, services are intangible and the value they provide can vary greatly from client […]

Unlocking the Secrets to Premium Pricing in Professional Services written by John Jantsch read more at Duct Tape Marketing

Marketing Podcast with John Jantsch

In this episode of the Duct Tape Marketing Podcast, I uncover the intricate world of pricing for professional services. Pricing in the realm of professional services can often feel like a nebulous task, as unlike tangible products, services are intangible and the value they provide can vary greatly from client to client.

Join me as we explore the secrets to unlocking premium pricing in professional services by crafting messages that sell solutions, not services.

In this episode, you’ll learn:

 

1. The importance of messaging: Before even considering pricing, it’s crucial to nail down your messaging. Communicating the problem your services solve and how you uniquely understand your clients’ challenges is the first step towards charging a premium.

2. Differentiation is key: Standing out in a crowded market isn’t just about being different; it’s about showcasing how your unique approach directly addresses your clients’ pain points.

3. Building trust through personalized interactions: In today’s competitive landscape, automated solutions are no longer enough. Clients crave personalized experiences and a deep sense of trust before committing to premium pricing.

4. Productized packages for long-term relationships: Offering productized packages not only simplifies your offerings for clients but also lays the foundation for long-term relationships built on trust and value delivery.

5. Embracing monthly recurring revenue: By focusing on solving specific problems for specific clients in a consistent and reliable manner, you can shift towards a scalable business model centered around monthly recurring revenue.

These key takeaways provide actionable insights into the nuances of pricing professional services, empowering businesses to navigate this tricky landscape with confidence and clarity.

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John (00:08): Hello and welcome to another episode of the Duct Tape Marketing Podcast. This is John Jantsch and I’m doing a solo show today. Today I want to talk about how to charge a premium for your services, how to charge more. So we’re going to talk about pricing, but more specifically how to price professional services. Professional services are tough to price, right? I don’t know, you’re essentially selling air in some cases. There’s nothing tangible that you’re going to set on somebody’s desk and say, here it is. However, you’re also in many cases, selling the hope or the promise of some massive result, help you get your life back, put your business on track, help you make more money, change your relationships. It’s something that has a massive potential result attached to the pricing. But here’s the thing that I think a lot of people get wrong. It’s not simply a matter of having some service that is just awesome and gets a great result.

(01:15): Obviously that’s got to be there, but before pricing or before charging a premium anyway really comes messaging. And what I mean by that is in many cases, whether you’re selling accounting services or consulting or like me marketing services or training, you got a lot of competitors essentially saying the same thing, promising the same result. So how do you rise above that? I think one of the real keys is differentiation. Now, I know many people say, you’ve got to have a point of differentiation. USP, whatever, all the other things people call those. But I think where people get this wrong, of course, is nobody really cares that much that you’re different. In some cases, that can be the thing that allows them to say, oh, okay, I know why I would pay you as opposed to them. But a lot of times what we get stuck in doing is explaining how we’re different.

(02:12): Nobody really cares that you’ve got some different framework or different approach until that difference matters to them. And the only way to really help them understand that is not to explain your difference, not to explain your framework and your process even. It’s to first help them understand that you get what they’ve been doing before, why it doesn’t work, that you totally understand. You’re essentially communicating the problem that they have. And a lot of times we get really caught up in communicating the solution that we have and there’s no kind of connection to problem solutions. So by first helping them understand, look, I get why what you’ve done to this date has it really worked? And here’s another key sort of transition, and it’s not your fault. I also get you’ve got all these people screaming in your ear, you’ve got this going on, you’re distracted with this.

(03:08): I, I understand why it’s so hard to solve this problem, and here’s the real issue. Now here’s the solution. For many years, marketers have been talking now about the hero’s journey that’s been around for hundreds of years, and essentially that’s what it is. I understand what your challenge is, why what you’ve done to date hasn’t worked. It’s not your fault, and I’m here to actually guide you to get the solution that will actually finally work for you. And now that differentiation actually means something because they can connect what it is that you do to them solving the problem. You’re essentially in your messaging, you’re promising to solve their greatest problem. So now all of a sudden that differentiation means something to them. So you have to be able to state that in very clear terms. I don’t tell people I sell marketing services or I don’t tell people I license my fractional CMO system until they understand that we work with agencies that are tired of working more and making less.

(04:17): That’s the problem we hear all the time. That’s really what we do. Now here happens to be the different way that we do it, but that’s the start of messaging that allows you to charge a premium. I know I said this was about pricing, and it is, but you can’t have that without the proper setup. You solve a specific problem for a specific person in a specific way. Now I want to listen. Now you can charge a premium for what it is that you do because you are talking about something that nobody else is talking about. And what’s funny, premium pricing, there’s actually far less competition charging premium pricing than there are people that are charging an increasingly falling price point because they don’t have that message. They don’t have that differentiation. They don’t understand the problems that their ideal client is trying to solve.

(05:13): And even if it feels today like, wow, could I really charge that much? Pick a number, $5,000 a month, $10,000 a month, whatever it is that you do as a service that you provide. In many cases there’s some amount of fear holding you back because you’ve felt the pressure of being like everybody else. And you go in and you say, I do this. And the next person says, I do this. And what’s the buyer going to do? How much? And so there’s a lot of pressure, downward pressure on pricing in that kind of lower tier. You start getting this messaging right? You start going out and saying, no, we charge a premium because we deliver an amazing value. In fact, we know our value and we can stick to it. You’re going to have far less competition for the ideal client at that level. So it’s kind of counterintuitive, but it makes a ton of sense.

(06:02): And then of course, you can start doing all kinds of the math calculations on this. You want five clients at X price or you want three clients at a much higher price. It’s probably not that much more work to serve clients at that higher price. So even if you get especially initially more nos at that higher price, who cares? And now a word from our sponsor, work better now. Work better now provides outstanding talent from Latin America, hand matched to your business with over 40 roles across various industries, including marketing. They’re a reliable partner for consistently finding the perfect fit for your business. Simply tell them what you need and they’ll handle the rest hassle-free. We have two work better now, professionals on our team, a marketing assistant and a marketing coordinator, and we’ve been blown away by their abilities, responsiveness, and professionalism. They’ve really become an essential part of our growing team.

(06:57): And to top it off, each dedicated and full-time work better. Now, professional is 2350 per month and there are no contracts to schedule a 15 minute consultation with a work better now rep and see how they’ll support your business growth goals, visit work better now.com. Mention the referral code DTM podcast, and you’re going to get $150 off for your first three months. That’s work better now.com. And don’t forget that DTM podcast code, the math will actually help itself work out. If you’re stuck in low pricing on your services today, start going and telling your clients why you need to double and triple what you’re charging them today. You’re going to lose some of them, but again, work the math on it. Probably in the long run you’re actually better off and certainly as you go out to new clients, in fact, I’ll challenge you if you’re listening to this today, and this resonates, this idea of I’m stuck in this price rut.

(07:57): Just the next three people you talk to, next, three prospects you talk to, just shoot a much higher number for your services and see what happens. You might actually be pleasantly surprised that you get no resistance, and maybe the resistance was here right in your own head. I know it sounds really simple, but you get that message part right? And you’re going to have different conversations. Now, another thing that I want to throw in here, this is going to add on, but if you want to have clients for life as opposed to just going out there and doing a project, then going out there and filling the pipeline again and starting over again, here’s one of the things I would urge you, regardless of what you sell, if you’re a marketing consultant, this will really resonate with you, but certainly any service business, professional service business can take this approach, create a productized package.

(08:49): So figure out the real value you bring, the real problem you’re solving, and figure out how on the front end to sell a very repeatable productize. Here’s what you get. Here’s what I’m going to do. Here’s what you’re going to do. Here’s what it costs, has a very set timeline to it, and that’s going to be your initial offering. That’s how you’re going to attract clients. What happens is, first off, it becomes very easy to explain. Everybody else is out there saying, we had this process and we’ll do discovery and we’ll figure this out. And you’re saying, no, we’re going to solve this problem in this way, and here’s what it costs. You’re going to attract some clients that just if nothing else, because of the ease of being able to explain that. But here’s what also is going to happen. You’re going to get really good at delivering that productized initial package.

(09:39): You’re going to be able to deliver far greater value. You are going to actually be able to potentially start delegating some of that consulting work that seems very hard to do for a lot of people because of this productized approach. But what you’ll also do is in that first phase one engagement is you will develop so much trust with your client that the idea of an ongoing client for life relationship is probably a foregone conclusion because of that trust in the relationship that you’ve built. Now, the second piece of that is then a lot of people talk about long-term retainers, and in many cases, they are scoping out what the work is or doing. A heaven forbid, a proposal about what the next six month follow on project might be. And the way that I would suggest that you consider is if you want to have a client for life, what if you mentally asked yourself or maybe actually asked the client at that point, what’s the amount of money that you would feel good or you would feel capable of paying me every month for the rest of your life?

(10:56): Heard another consultant. We’ve been doing this for years, and I finally heard another consultant actually give it a name. He calls it Colorado pricing. I can’t remember actually why he used that term. I haven’t live in Colorado, so that’s probably why I remembered it. But the idea here is that you now have that level of trust that you are going to actually scope out what needs to be done. The client’s not saying, how many hours do I get for that? Or, what are you going to do next week for me? That you are actually saying, look, we’ve got a level of trust. We’ve worked together. I’ve delivered an amazing result. Would you like to have that amazing result as we mature and do more and more for you each progressing month, I’m in charge of the scope. I’m in charge of what that costs me to deliver.

(11:40): Obviously, all of the profit equations that have to go into what you can afford to deliver, but you’ll find that clients get very used to getting that result. They get very used to paying that amount. There’s no more monitoring as long as you’re delivering, obviously. Hopefully that’s a given. But it is a way for you. We have clients that we have kept in that relationship for in excess of 10 years. The business has grown. We’ve matured with them. We’re able to continue to deliver value, but the relationship is such, that becomes their expectation. It becomes a builtin cost for them because they see the return on investment. So let’s wrap this up. Charge more for professional services by having the right message that’s not just, here’s how we’re different or here’s our solution, but it is, here’s the problem that we promise to solve for you because we get it.

(12:31): Nobody else gets it. Nobody else is communicating it. We get it. We’re going to solve your problem in a very specific way using this packaged approach that gives you the first phase of our engagement so that we build this amazing trust and an amazing relationship. Then you’re just going to be a client for life. That is our expectation. Lots goes into what that package looks like. Lots goes into what that fulfillment looks like on an ongoing basis, but this is how you build a monthly recurring revenue model that allows you to scale a professional services business. Alright, that’s it for today. Hopefully we’ll run into a listener or two out there on the road.

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