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SHOW SUMMARY: In this episode of The Soul of Enterprise, Ron and Ed dive into the transformative world of pricing strategies. Pricing is more than just setting a number—it’s about understanding and conveying the true value of outcomes. Together, they explore the common pitfalls of cost-based pricing, the importance of focusing on utility, and how consultants can command higher prices by focusing on transformations rather than time spent. They’ll discuss the need to apply the same creativity to pricing that consultants apply to solving business problems, and why having the courage to walk away from negotiations can actually increase your pricing power. Other topics include providing pricing options, leveraging the power of transparency in expectations, and avoiding the trap of negotiating solely on price. Whether you’re a consultant, business owner, or service provider, this episode will challenge you to rethink your approach to pricing and provide practical tips to boost your profitability by focusing on the value you deliver. Tune in to learn why leading companies never limit their profitability—and neither should you!
SHOW NOTES
Segment one
Pricing principle: Remember that transformations command higher prices than services.
“There's a universal desire to become healthier, wealthier and wiser period. That's true for all of us.” —Ron Baker
From Ed today (and often quoted), “Common offerings command a common price, but uncommon offerings command and uncommon price.”
Pricing principle: Use your costs as a floor, not a ceiling. None of the world’s leading companies put a limit on their profitability, and neither should you.
Segment two
Pricing principle: Provide pricing options, but never ranges. When discussing options, don’t focus on the amount, focus on the difference.
“If you picked up anything off the shelf and saw a price range on your can of soup or your box of cereal, you'd be annoyed. And your customers are annoyed when they hear a range.” —Ron Baker
Pricing principle: Apply the same creativity to pricing as you do to solving your customer’s business problems.
Pricing principle: Price when you have the most leverage. A service needed is worth more than one that has been delivered.
Segment three
Ask a question of Ron or Ed…..OR ask a question of an upcoming guest. From any device, just use this link https://www.thesoulofenterprise.com/questions
Will you be in Vegas on October 25th? Ron will be speaking at the Professional Pricing Society. More information here: https://www.pricingsociety.com/ppsvegas24
Pricing principle: Signal early in the process that you’re willing to walk away, you’re not a supplicant to your customer.
Pricing principle: Insist on transparency of expectations in place of transparency of costs and hours. Costs are the seller’s concern, not the buyer’s.
Pricing principle: Never negotiate on price. If you reduce price, reduce value. Otherwise, you impair your pricing integrity.
Segment four
Pricing principle: Always structure payment terms upfront (no billing work in progress in arrears).
Pricing principle: Stop running away from risk — embrace it. All profits originate from risk, especially supernormal and windfall profits. Actuaries price risk, so can we.
Bonus Content is Available As Well
Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention.
Click the “FANATIC” image to learn more about pricing and member benefits.