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Value-Based Pricing is a complete system for doing client work.
We have solved every client problem.
Imagine every issue you’ve faced with clients that makes your life a living nightmare— gone.
That’s not something we say lightly. It’s something we worked on intently for years to solve.
We don’t want pricing to be a guessing game for you.
You DESERVE for it not to be a guessing game.
This is the fourth and final part of our series on client work. Check out the past three episodes if you missed them.
We bring it all home with a conclusive episode on pricing your work according to the value you create for your clients.
Ben had some huge breakthroughs in this episode. I know you will too.
Highlights, Takeaways, Quick Wins
- Your job is not to convince clients of the value of your services—find people who already value the solution you can provide.
- If your client doesn’t understand their own business, this is going to cause problems for your pricing.
- Communicate the benefits to the client of discovering the value of your work (listed in e310 show notes at 37:28).
- If you don’t ask “Why?” until the answer stops changing, you aren’t going deep enough.
- The client is responsible for defining three things: content, goals, and value.
- Clients don’t want tasks done, they want goals accomplished.
- Take ownership and don’t blame the client for any problems that occur. All problems are your responsibility.
- The same problems are going to exist with every client until you make a change.
- The only way to become empowered is through responsibility.
- Good clients are rare. You can’t chase them, you have to attract them.
- You’ll make the most money when you’re eager to solve other peoples’ problems.
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- 03:21 Sean: For so many people, pricing is a guessing game. Client work is a guessing game. They don’t have a system. They don’t have something they can rely on. They’re just trying to figure it out. Sometimes things go well, sometimes they don’t. It’s really just a big guessing game, and we don’t want it to be a guessing game for people. That’s why we built this system, Value-Based Pricing.
- 03:49 That’s a bold statement, but it’s not something we say lightly. It’s something we worked intently on for several years. This is a big thing to say, that we’ve solved every client problem, but we really thought through it. We thought through every single thing. “Oh, the client doesn’t pay on time.” We solved that. “The client wants to shift the deadline and there isn’t enough time.” We solved that.
- 04:16 “They made it through and I thought they were a good client, and they turned into a bad client.” We tell you how to fix that. This is what we’re passionate about. We’re passionate about the process and the system. We don’t want pricing to be a guessing game for people. So many people say, “Pricing is a dark art,” and it makes sense, because a lot of pricing is guessing. It’s based on arbitrary things, like what other people charge.
- 04:47 Or, “What’s my hourly rate?” But where does that come from? It’s arbitrarily set and arbitrarily increased. “Oh, I don’t think I’m charging enough. I should increase my rate.” The thing the rate is based on isn’t concrete. There isn’t a pricing method out there that’s 100% fair to both you and your client, and that’s what we set out to design.
- 05:17 Ben: The hourly thing is so funny to me. Even if you were to figure out, based on your living expenses, whether you’re bringing in the sole income in your family, and needing to work however many hours—let’s say 40 hours a week—you’re trying to know how much you would need to make per hour. Even if you did that, there are so many other things going on in there. Who says you only have to work 40 hours a week?
- 05:47 Who says you have to work as many as 40 hours a week? Who says you’re actually going to get that project done in that amount of time? Who says that you have to be the sole income in your family? You can make an argument for so many different things, when it comes to the hourly rate, that it never becomes this concrete thing. Really, the only thing you can go to is how much it’s actually worth to the client.
We have solved every client problem with Value-Based Pricing.
Discovering the Value
- 06:12 Sean: That’s what we talked about in the last episode (Related: e310 Discover How Much Your Work Is Truly Worth (And Price Accordingly)). We’re assuming that you’ve listened to the first three parts, building on each one, setting the foundation. In the first one, 308, we talked about how It’s Possible to Enjoy Client Work (Here’s How).
- 06:42 In 309, How to Get Good Clients Every Single Time, we talked about attracting clients, filtering with your questionnaire, and a bunch of good stuff. Then, in the last episode, 310, Discover How Much Your Work Is Truly Worth (And Price Accordingly), we did a deep dive on the value discovery process. The second one in this series was really, really good. We didn’t think we could top it.
- 07:03 People were saying that the third one did, so definitely check out that last one, episode 310. That’s where we talked about what your work is worth and how you’re able to price on value. One of the biggest misconceptions is that you, as the professional, define the value. Some people get this. They’re like, “I understand, Sean. I don’t define the value. The client defines the value.” But when it comes to what that looks like, they’re still confused.
- 07:32 They’re still projecting a value onto this project. They’re still saying, “I think the client will realize about this much,” and they suggest a value, they guess it, or they ballpark. Or they kind of go a little bit off of what the client said. It needs to be a number that comes from the client. All you’re doing is asking questions and listening. A big question I was still getting this morning, that I continue to get from people, is, “What if the client can’t place a value on the work? What if they can’t give you a number?”
- 08:10 It’s two parts. They either can and they aren’t, or they just can’t. Like, “I don’t know. It’s priceless to me. I can’t give you an actual value.” If they’re saying they won’t, this is a problem we solved in the last episode. Go listen to 310. You need to position the benefits of discovering the value to the client as being in their best interest.
- 08:46 It’s just so much better for them. You’re thinking about you, like, “Once I know the value, I can come up with a price,” but it’s actually better for them. We give you a dozen reasons why. If they can’t, if they’re like, “I would, I want to help you and answer your questions, I know you’re going to do great work, but I don’t know!” This is where you need to do one of two things. You need to start asking deeper and deeper questions.
- 09:12 Or, and this is a possible conclusion, they very well just could not tell you the value. That’s a possible conclusion. If that’s the place you reach after asking a bunch of good questions, and I’ll give you some good ideas in a moment—if the place you reach is ultimately, “I don’t know. I can’t give you a value”—then Value-Based Pricing does not work. It’s simple, because it’s value-based. If you don’t have a value to base your price on, the system simply doesn’t work.
- 09:49 No! “This should be worth $2,000 to you! Don’t you understand? This is worth this. How do I convince the client? How do I show them? How do I make them realize the value of the work?” These are all the wrong questions. None of those things are your job. You’re not trying to make them realize. You’re not trying to show them. You’re trying to uncover value. It’s either there or it’s not. The value is there. The client knows.
There are so many benefits to the client of discovering the value of your work that, if you’re communicating well, they’re going to want to.
Don’t try to sell the value of the work to the client.
The Client Defines the Value
- 10:17 Sean: Ben, you were saying that maybe we could do some role playing or something in this episode, to show how we might go about uncovering it.
- 10:26 Ben: In the past, when I’ve tried to use what I understood about this approach with clients, some of the questions I would ask had to do with the purpose of my work being to get new clients, to increase the number of clients coming in. I would ask questions like, “How many clients do you have right now? On average, how many new clients do you gain over the course of a year?” I set this baseline, and I know that, with what they’re already doing, this is their baseline growth.
- 11:12 Then I say, “If this works the way it’s supposed to and it’s properly implemented, what do you expect to see, in terms of the number of clients coming in?” They can usually assign a value to that. So I say, “Okay, what’s the lifetime value of a client?” If it’s just a one time service, what’s the value of a single client? We try to figure that out. I’ve never gotten to the point where I go further and ask them to do the math.
- 11:49 “If it’s this many clients and you’re thinking this many more clients over the next five years, and each client is worth this much, how much is that?” I don’t ask them that question because I don’t want to put them on the spot. I don’t want to make them do the math. Another thing I hear you saying is that, if I do the math, is that me putting the number in their head?
- 12:20 Sean: Yes, it is.
- 12:27 Some clients, right off the bat, they know it. Other clients don’t know it yet, so you have to ask these value discovering questions. That was a great example, Ben. A lot of times, there are different levers you can pull to create value. It depends on the kind of work you’re doing. It depends on the goal of the client. Sometimes, they want to sell more products. Other times, they want to increase their number of customers.
- 12:56 Sometimes, they want to increase the number of items that a customer purchases, or maybe the frequency of the purchases. Maybe someone, on average, purchases once a month. They want to increase that to twice a month. What would that look like? What is your average monthly income? What’s the average cost per sale or items per order? These are different levers, and it depends on the work.
- 13:22 The client knows their business, so you have to rely heavily on their knowledge of their business. If they don’t know their business, they’re not going to make a good client. Just as heavily as you want them to rely on you in your process and your expertise in the work you do, you have to rely on them. They’re a crucial part of this whole project, of coming up with the price of the project. Again, this is in the best interest of both parties.
- 13:53 You want to remind them, “Hey, I’m only here if we’re sure we can create value for you.” If you’re not going all the way to the point of that dollar figure that they’re providing for you, “This is what this is worth to me,” then you’re doing them a disservice. Yes, you’re making it difficult for yourself. You end up guessing on the price. They’re also uncertain. They don’t know what the result of this project will be.
- 14:18 That makes for very difficult business decisions. “I’m trying to make good decisions for my business and how I spend my money, and this decision here feels ambiguous. I don’t know what the end result is going to be.”
You have to bring the client to the point of articulating the value for themselves.
Can Value-Based Pricing Work for You?
- 14:31 Ben: It seems a little bit like the client needs to have some kind of marketing knowledge, some understanding of how a specific marketing tool would work. If we’re talking strictly to people who design things, designers and developers, the math isn’t completely solid on whether this thing is well designed and implemented as well as it’s supposed to, where we can expect this kind of result. It’s fairly close, if you do your research and you know what you’re talking about.
- 15:16 Sean: I’m really glad you brought this up.
- 15:23 Ben: Let’s suppose the client knows their business really well, but the extent of their knowledge on the tool is, “This other business has the tool, and they seem to be doing well. I want those kind of results. I think I need that tool.” Maybe through the discovery process, you come to find that tool would work for you, but there are other tools that would do the same kind of thing. If this is specifically what you want, then it would work. How much do you define the effectiveness or the potential outcome for the client, and how much do you leave that up to them?
- 16:04 Sean: I love this question. This really gets into the meat of things. To set the stage, I want to recap something I mentioned in a previous part. People are wondering, “Can Value-Based Pricing work for me?” This is the litmus test. You need to be able to say yes to all of the following three questions:
- Do you do client work?
- Is your work customized for each individual client?
- Do your clients realize a financial gain as a result of your work?
- 16:50 What we’ve found is that intangible value doesn’t work. You have to anchor to tangible value, a real figure, just like a ship in a harbor has to anchor to something solid. It can’t anchor to seaweed. Intangible value is like a mist. You can’t anchor to it. We spent a long time exploring it. Intangible value doesn’t work with this system.
- 17:15 The system we’ve built with Value-Based Pricing works where there is a financial gain created. Where there’s financial gain created and you’re working with a client, it stands to reason that, in most cases, they will have a business. In some cases, maybe they don’t actually have a business, but maybe you’re able to create financial gain somehow. Most of the time, that’s going to be a business.
- 17:39 We need to look at what a business is. A business is, essentially, commerce. If you’re giving things away, you’re donating things. That’s not a business. That’s fine. You can donate things. You can help people. You can give stuff away, but it’s not a business. There’s a difference between being in business and wanting to be in business, and doing business-y things and pretending to be in business. Business is commerce, and commerce is transactional, the exchange of goods or services for currency, money, or some kind of compensation.
- 18:16 That is what a business is. You want to work with savvy business owners. They don’t necessarily have to be the owner. It could be the head of a department or whatever, but the people you’re working with, in businesses, need to understand their business.
- 18:43 They don’t know their business, how they make money, who their target audience is, or how they’re attracting them. They don’t have any kind of sales funnel. They have no idea of the customer lifetime value. All of these numbers are very important to the lifeblood of a business. If you don’t know these things, it’s going to be really hard to survive as a business. First of all, you want to assess your client’s current situation, and ask yourself, after having asked them questions, “Does my client understand their business? Is my client a good business owner?” If not, most likely, they’re not going to make a great client.
If your client doesn’t understand business, this is going to cause problems for your pricing.
Stop Trying to Convince Clients of the Value
- 19:28 Ben: To give a really practical example, let’s say there’s a potential client. They own an apparel line, and they sell their designs on clothing and all kinds of stuff. They want to hire me to shoot some videos for five of their products, so they can use that on the product sales page. Are you talking about the difference between someone who understands that putting a video on their sales page is going to equal X% of increase in conversions, vs. somebody who thinks, “Video would be a really nice thing to have,” but doesn’t know that number?
- 20:15 Sean: That’s exactly right. This is huge for most people. I’m going to try and pull it apart a little bit, but help me clarify this for people too, Ben. What you’re describing are, and should be, separate services. One is the creation of a video that goes on a homepage or a landing page. The other is the understanding that the addition of a video on a homepage or landing page will create increased conversion.
- 20:46 These are two separate services. One is educational and consultative. They’re two different services. Too many people try to educate the client on the value of their work, and the client doesn’t already value it. You’re trying to create value. You’re trying to come to someone, give them an antique lamp, and convince them that it’s super valuable. It doesn’t work. Go off of the lamp they already have that’s valuable. Try and sell them on something. That’s not a great example, but don’t try to do both at the same time.
- 21:40 If you want to be in the business of convincing people that something is valuable, go all in on that. Ben, you could teach clients how to increase their conversion rate. That’s something they’re looking for, right?
- 21:54 People are at different stages. One person is like, “I need products and I need customers, and I’ll go to these trade shows, shake customers by the hand, and I’ll ask them if they want to buy my product.” They figured out the simplest way to make a sale. Shake a person’s hand, convince them to buy your product, you give them the product and they give you the money. Super simple.
- 22:17 Then, they realize there’s this thing called the internet, and you can get exposure to way more people than you could going to trade shows and shaking peoples’ hands. There could be ten people on your website at the same time, where you can’t really shake ten peoples’ hands at the same time. The only thing is, not all ten of those people are going to close and do business with you. Only some of them will.
- 22:40 The difference between the amount of people on your site who don’t do something and those that do is your conversion rate. Now, this business owner is starting to understand, “Okay, this is important stuff. I want to increase my conversion rate, the number of people coming from these different traffic sources.” Helping your client understand what a conversion rate is and why increasing it is good for their business is valuable education you can offer.
- 23:06 You could offer a course on traffic, conversion, leads, all of this stuff. That education alone could increase their awareness to the point where they’re like, “This is something I should focus on, something I should invest resources in. I should hire people. I should buy tools and services to focus more on this.” That person is in such a different place than someone who understands conversion rates, who understands that video is engaging and that more people will sign up if you have video. They’re to the point of, “Now, I need the best video person.”
- 23:43 Ben: Really, they’re coming at it already understanding what the effectiveness of it would be, if the video meets the quality standards that it should and if it’s implemented correctly, or whatever it is. For them, it’s already simple math. I saw this on a video once. The guy who was speaking said that companies who understand their business care most about lowing the amount of risk. The better the designer or the developer, the better quality that person produces, the lower the risk that when you implement it, you’re going to see the results you expect.
- 24:42 Sean: Let’s keep going deeper here. I know there’s still a disconnect here, so I want to go even deeper. Go to ValueBasedPricing.com. By the time this episode goes out, we’ll have a brand new mini course there that Cory and I just shot last week. It’s called Learn to Price on Value. There are three new video lessons, so definitely go check that out. I wanted to mention that.
Your job is not to convince clients of the value of your services.
You need to find the people who already value your services.
The Subjectivity of Value
- 25:13 Sean: People in the chat are talking, and someone says, “It sounds like many things are intangible value.” Darian says, “But there are things you do that don’t have ‘value.’ What’s it worth to the client to not have a cart bounce? What’s it worth to you to give up six hours a day that you could be spending with your kids?” What is this worth, what is that worth? How can you put a price on it? That’s totally true. There are so many things like that.
- 25:43 What is the value of getting a few hours of recoup time? How do you put an actual price on that, a value on that? What we’re describing here is intangible value. It’s value that is not tangible, and there’s nothing wrong with it. It’s not like right and wrong, tangible and intangible value, it’s just that Value-Based Pricing only works with tangible value. There are a lot of people who, like we just explained a moment ago, are further along the education spectrum.
- 26:17 They understand, “I know exactly what six hours with my kids is worth.” They can actually put a tangible value on it, for them. That’s a weird thing to say.
- 26:33 Ben: It’s not, though, if you think about it. I’m starting to think about my time this way more and more. If there’s a service that I know would save me this much time per week, I can look at how much it costs, and I can measure that against how much I believe my time is worth. You can’t come up with some subjective number for that, but if the client gives you a solid figure and they say, “Six hours of my time is worth $1,200,” then you have something tangible.
- 27:11 Okay, so what if that saves you six hours a month for the next five years? Then you’re talking about tens of thousands. I lost the math, but you get what I’m saying. If they can define a specific value, even if it’s arbitrary, because it’s coming from them, can you treat it like it’s something you can anchor a price to?
- 27:37 Sean: Here’s why it’s so difficult for everyone to understand this. They have been working with all the wrong clients for their entire life. The clients we are describing here, they don’t even know. They’ve never experienced them. They’re not on their radar. I think it was the first episode of this series, 308, where I was talking about myself as the client. I’m an example of a good client, but I’m not a common client.
- 28:10 We talked about this is part one. These things are not normal things. You’re thinking about normal things and common clients, and you’re coming up with these objections. Of course those objections apply.
Good clients are rare, which is why you have to attract them a certain way.
The Client Defines Whether the Value Is Tangible (Or Not)
- 28:34 Ben: My question was, if I came to you and you said, “My time is worth $1,000 an hour,” as the professional in this situation, even though that’s subjective according to you, because you’re stating it as the worth of your time, I can anchor to that.
- 28:58 Sean: Exactly. That’s a great point.
- 29:17 How much is your time worth, Ben? Well, it’s worth a certain amount to you, but it’s worth a certain amount to other people. How much is time with your kids worth? You can put a value on it, but someone else would probably put a different value on time with your kids. Everything is different. Your website, your business, is more personal to you. Maybe you have a more aggressive willingness to take greater risk in your business. The value is different for you.
- 29:45 Maybe you don’t want to take risks, so you’ll do anything to mitigate all risk. Value is different to you. Everything is subjective. For them, they place a greater amount of value on the sliding scale of, “I want to be safe.” Okay, we can create safety nets for you. It costs money to build the safety net, but we can do that. It’s a spectrum.
- 30:15 Once they define it, that’s what it’s worth to them. If they say, “This is worth $20,000 to me,” it’s worth $20,000 to them. They said it. This is all we’re determining. Any time we buy something, we are saying that we value it greater than the price.
- 30:33 Ben: The disconnect we’re having is that we’re trying to think of a thing as intangible. Are wedding photos intangible, but a website is tangible? We’re trying to think about it that way, but really, our definition needs to change. Something that’s intangible is something the client can’t give a value to; something that’s tangible is something they can give a value to. That really depends on them, not on the specific thing.
- 31:08 Sean: Exactly. That’s why you can’t know. Whenever we talk about things like wedding photos, it’s not as simple as, “That’s intangible value, it doesn’t work.” In the past, we’ve said that in a lot of cases, that is an example where a client may not be able to provide a tangible value, but you don’t know. If they can, then it works.
- 31:35 Ben: That makes me want to get really creative about, “Okay, what kinds of questions do I need to ask to mine that from them?”
- 31:42 Sean: That’s right.
- 31:52 It’s no wonder you don’t know the value. You should always, in every value discovery process, hear one of the answers multiple times. That’s the only way you know. If you ask why again and again, when they repeat the answer, you’ve gotten to the bottom of it. If you haven’t heard a repeated answer, you didn’t get to the bottom of it.
Value can be subjective according to the person that’s defining it, but once they define it, the professional can use that objectively.
Value is always subjective.
The client defines the value, but how they come up with that is their own business.
If you don’t ask why until the answer stops changing, you aren’t going deep enough.
Setting Expectations & Establishing Roles
- 32:40 Ben: I definitely came in feeling like I didn’t understand, and I kept wanting to take on saying what the value was to myself. I’m like, “Can I take this number from the client, or this answer and this answer, and come up with that?” No, I need to keep asking questions so it comes from their mouth.
- 33:10 Sean: It’s so normal, Ben. It’s so common. We naturally want to do this. We’re naturally like, “Let me figure this out.” I’ve said this so many times with establishing roles. Setting expectations, establishing roles. Who is responsible for what? Who is not responsible for what? The client is responsible for content, goals, and value. Those three things. Everything else is your business.
- 33:39 You’re the pro. You need to set these expectations with your client. However, just like if the client came into your office and said, “No, you need to do it this way. You need to do it that way. I want your world-famous pizza, but you have to make it with this sauce,” trying to tell you how to do your work—just like that would be wrong and out of bounds, you’re doing the same thing in the value discovery process. Who’s responsible for defining value? The client is. They are responsible or they’re not. If that’s on them, they have to say it.
- 34:20 If you’re taking something they said and performing a math equation on it, you’re defining the value. You have to walk them through those steps, not to convince them, but to uncover the value that is already there.
- 34:35 Ben: It seems more and more like, in that discovery process, your job is to sell them on the idea of fully understanding the value of it for themselves.
- 34:51 Sean: In the last episode, we talked about how you want to position this whole value discovery process as being in their best interest, even beforehand.
- 35:00 Ben: You said that, but it didn’t quite click until now. It’s almost like a person is drowning, and you’re trying to give them the lifesaver. They’re like, “No, I don’t want it!” I don’t like this metaphor, I’m sorry. The point I’m trying to make is, yes, it’s in their best interest for them to fully understand the value.
- 36:44 Sean: Yes, yes, yes. That’s such a huge mindset shift, and I forget. Every other pricing method is about you. It’s one-sided. If it’s ever fair to you, it’s unfair to the client. That’s how those other models are designed. This is the only one that’s designed so it’s fair to both of you. Your job, your goal, is your client’s success, and their goal is their own success. When they succeed, you succeed. It’s the most altruistic way to approach business with a client.
- 37:21 You want the client to do well. All of this is in their best interest. When I say “position it as being in their best interest,” I don’t mean that it isn’t and you should be dishonest and deceive them. I mean that it is, and do the work of positioning it so that they understand as well.
- 37:42 Ben: We shouldn’t be doing work with client for whom the solution they want isn’t something they can afford to invest it, or that doesn’t make sense for them. When we’re just putting an arbitrary price out there, we never get a chance to discover whether or not that’s the case. How valuable would it be for a potential client to find out, in a meeting with you, that it would be nice for them to have this thing, but it’s not something they can afford to invest in right now.
- 38:19 It would be better for them to start with something else. You can point them to somebody who does that. That leaves a great impression, and it saves you from doing work that’s ultimately not going to benefit the client, and that you wouldn’t have charged a fair rate for, for them or for yourself.
If you’re taking something the client said and tweaking it, you’re defining the value—which will ruin everything.
You’re not trying to get a number from the client so that you can give them a price but so that they can make a good decision.
Objections to Value-Based Pricing
- 38:39 Sean: Derrick asked this earlier on: “Since we all understand that Value-Based Pricing is the way to get great clients and price fairly for all parties, can you tell any stories or situations where clients simply won’t get on board with this method? What are some common excuses for objecting to Value-Based Pricing on the client’s side?” This is a very important thing. You think we’ve taught so much about this in all of the shows, but there are so many things that I hold back on.
- 39:08 I’m like, “I can’t even get to that.” So many things build on each piece. We’ve got a four part series, and the first questions, every single time, are things we answered in the last one. People aren’t even listening to the different parts. I can’t go into this super in-depth material. You can’t understand one piece unless you understand the one before it. I would be doing people a disservice on the podcast, because it would be so confusing.
- 39:37 I’ll answer Derrick’s question, but this is an example of a large piece that’s not even worth getting into outside the course, but I’m going to tell you anyway. There’s so much education behind this.
- 40:02 You don’t say you use Value-Based Pricing. You don’t try to convince them of the reason why that your pricing method is in their best interest. All of those things are irrelevant details to the client. It’s just like you don’t need to tell them about the macros you have on your computer, how you do your work, and what shortcuts you use. All of this is irrelevant. Your pricing method is irrelevant. The kind of paper you print your proposal on is irrelevant.
- 40:28 These are irrelevant, distracting details that you shouldn’t talk about with the client. We also go into a lot more, other distracting things that you shouldn’t bring up to them. The short reason is that it is not relevant to the client. We’ve spent how many years doing shows talking about this stuff? We’re still trying to get into things. There are so many questions people have. This is advanced.
- 40:54 This is not a simple method. You can’t educate the client on Value-Based Pricing, even if it was a good idea. Bringing up the very topic of Value-Based Pricing isn’t relevant to the project at all. I think there’s a little bit more to Derrick’s question, but I wanted to make sure that’s very clear. He asked what some common excuses are for objecting to Value-Based Pricing, but they should never know.
- 41:20 That’s not because it’s about being deceitful, but because it’s not relevant to them. It doesn’t help the project. It’s not what they should be focusing on. It’s way too complicated.
- 41:40 All it is is good business. All it is is, “I want to help you be successful.” All it is is, “How can I create value for you?” That’s what the conversations look like. Never, in any of the scripts or anything we provide, do you talk about the method itself. Now, I’m going to take some liberty with his question here. He could also mean, what are are some common objections people have when you are using Value-Based Pricing?
- 42:07 The biggest ones would be, “Why are we even talking about the value of the project to me? Just do the work. I told you what you need to do. This is what I want you to do.” To that, like we talked about in part one or two, you want to refocus them on the goals they want to accomplish. Clients don’t want tasks done, they want goals accomplished. If you’re just performing tasks, you’re asking as a technician, not a professional.
- 42:37 You’re just trading your time for money. You want to position yourself as a partner in your client’s success. You’re a smart person. You understand that people don’t want tasks done in isolation. They want bigger goals accomplished, and if you know what those goals are because you ask them questions, you can help them accomplish them better, faster, stronger. Client work is hard, difficult, and necessary.
Don’t ever talk about Value-Based Pricing to the client.
A client will never reject Value-Based Pricing, because someone practicing it doesn’t talk about it as such.
- 43:24 Sean: Professionalism isn’t sexy. It’s not fun. It’s not fun to tell people, “No, it’s your fault. You are responsible. The reason your employees take home work on the weekends because they have to work overtime to meet some deadline is because you’re responsible. It’s your fault. The reason things change because the client said, ‘Oh, this happened and that happened, so the deadline’s different,’ is because you’re responsible. It’s your fault.”
- 43:54 People don’t like this. Responsibility and excuses have one thing in common: you will find whichever one you are looking for every single time. If you have a mindset of excuses, you will find all kinds of other people to blame. If you have a mindset of responsibility, you’ll find all kinds of ways that you can take ownership for not just the things in your business, but the things in your life. It’s just a way of going about things.
- 44:21 What’s so great is, it’s empowering. Don’t you realize? Once you understand that you’re responsible for everything in your life, everything in your client relationships, you have control. You can solve problems and improve things.
- 44:41 “They were late. They changed things. They didn’t tell me information.” Every single one of these things, if it’s their fault, you didn’t set the expectations right. If they’re late, you didn’t set the expectations right. You didn’t communicate. You didn’t talk about deadlines. You didn’t talk about ramifications if things weren’t on time. All of these things.
- 45:00 If they don’t pay you, it’s because you didn’t talk about the terms. If they’re changing your process, it’s because you didn’t build trust. Everything leads back to you. I hate having to be the bad guy. I don’t like being disliked by people. I don’t like people saying, “Sean’s the mean guy. He’s always talking about professionalism.” I’m a fun person! I don’t want to be disliked by people, because deep down, I want you to be empowered.
- 45:37 Nobody wants it. No one in the world wants it. Everyone in the world is all about excuses. This is a very uncommon thing, and it makes me unpopular. I believe in this mission, in the work, so much that I do it anyway. I’m going to be the bad guy, because I want to help people. That’s why I crack the stupid dad jokes. I want relief. Ben, you hang out with me when we play poker and get coffee. I’m not all about the hardball.
- 46:14 Ben: You make sure we follow the poker rules. What’s more fun, though? Clicking on an article and reading comments from people complaining about their clients, agreeing with each other, or is it more fun to get to a place with your clients where they really trust you because you’ve taken on responsibility? You’re doing amazing work that you feel proud of, that’s really effective for them.
- 47:15 Sean: It’s so worth it.
- 47:17 Ben: There are always people you can commiserate with. There’s a certain kind of satisfaction that can come from that, but it’s so fleeting. At the end of the day, you still come back to the same problems. The same problems are going to exist with every client until you make a change.
- 47:44 Sean: Yeah. I care about that for people. I care about more than just tomorrow, and that’s not always fun. What’s fun is complaining about your client and getting 43 likes. That’s fun. You feel good in that moment, and it’s not your fault. It’s the best, but your life sucks. You’re broke. You’re not making good money. You’re not working with great clients. You’re not proud of your work. You feel like a victim. That’s no fun.
Your life becomes better when you take ownership and don’t blame the client.
The only way to become empowered is through responsibility.
Solve Other Peoples’ Problems
- 48:17 Sean: All of this is worth it. It’s a whole new realm of clients. This sounds like magic to you because you’re looking in the wrong place. You’re out in the desert in Arizona, with the sun and no time, and you’re looking at pictures of waterfalls in Hawaii. You’re like, “This isn’t real. It’s not the world we live in.” It’s not the world you live in, but it’s a real place. It’s out there. Yeah, it’s a tiny island.
- 48:48 The percentage of all of the land in the world that looks like this is very small, but it’s out there. If you can live there, where the waterfalls are, where it’s green and nice, and you can support yourself, why not do what it takes to work hard and save up the money to get the plane ticket? Let’s get to a segment I like to call, The Way I See It With Cory McCabe.
- 49:52 Cory: Last night, I was at a shop, and the guy was talking about how he worked with this client, saying, “Let’s see what we make out of this one. I priced him at this, he’s going to counter, and then I’m going to say this.” It was this back and forth thing, and in the end, you have no idea what you’re going to make out of this project. He doesn’t know what he’s going to make next week. There’s so much uncertainty.
- 50:23 What would the world look like if they all used Value-Based Pricing? He doesn’t know what he’s going to make. That’s how so many people do things. It’s like you’re going to buy a car, and you’re like, “How much do you want for it?” They say a price, and then you’re like, “Well, I’ve got this.” You’re lying. You have a little bit more than what you’re saying. They’re like, “Well, I’m not going to go any lower than this.” You’re like, “Okay, this.” It’s terrible.
- 50:52 Sean: That’s why I call it a game. It really is a game. You play it. You know your part. You know the steps, the dance. It’s a game. You and I were talking about this yesterday.
- 51:25 When you learn to see problems in the world and solve them, you’re creating value. Meanwhile, we all have our own problems, and the last thing we want to do is solve our own problems. I was talking to Cory and I was like, “Wouldn’t it be great if we all focused on solving other peoples’ problems and then paying people to solve our problems?” We can work on other peoples’ problems all day, and the cool thing is, we get to go home.
- 51:53 They still have to live with those problems. You come home to your own problems, and the last thing you want to do is, “Ugh, the yard needs to be mowed.” The guy who’s like, “Look at all this tall grass. I need to solve these problems. I’ll knock on the door and take my money. I don’t want to deal with my problems. I want to go to work, solve other people’s problems, and then go home.” That would be an interesting world.
- 52:26 Ben: It would be really interesting.
Not everyone is eager to solve other peoples’ problems, but those that do make the most money.
- 52:33 Ben: Let’s say you’re living in Arizona, in the sun where there’s no time. These guys on this podcast are talking about this island in Hawaii that has these waterfalls and beautiful green trees and lava mountains and stuff. You’re like, “That sounds really cool.” In the first place, you have to believe it exists, that it’s a real place, and that you can be there. You have to believe that.
- 53:11 Sean: Otherwise, you’re going to be in the middle of the Pacific Ocean.
- 53:16 Ben: To go and buy a plane ticket, you have to believe that’s an actual destination where you could travel, where you could stand with your own two feet, with your own eyes, and see the waterfalls. You have to believe that’s true. In the same way, this idea of working with these kinds of clients and going through this kind of process, you have to believe that’s possible. My question is this. What is the plane ticket? What’s the thing the person could do to get them from here to there?
- 54:07 Sean: It takes a lot to build a plane. It takes a lot of resources, time and expertise. I know for a fact that I will never find the time in my life to build a plane that takes me to Hawaii. It would take my entire lifetime, and that’s not what I want to do. I want to focus on what I want to do. I want to focus on doing great work for people that I like, making money, and having freedom. That’s what I want for myself.
- 54:39 I don’t want to have to go build the plane. Let someone else do that. Getting across the Pacific is a problem I have that I want to throw money at someone else to solve, so I can go out in the world and solve other people’s problems. There are people out there who have made it their job to say, “You know what? There’s a problem. We don’t have planes to fly across the Pacific Ocean. We’re going to make it our full time job to build and maintain planes for these airline companies who want to sell tickets and move people from one place to another.”
- 55:11 They have a problem. They need planes. They’ve made it their job, their life, and their mission to craft the best plane, the safest vehicle, safer than a car, to take you halfway across the world. To them, I say, “Hey, here you go. I want to buy a ticket.” That’s what we’ve built with Value-Based Pricing.
- 55:39 It’s more than I can get into in a dozen podcast episodes, because it’s literally a book. There’s a lot here. It’s not simple, but we make it easy. Normally, I say, “It’s simple, but it’s hard.”
- 55:56 Ben: It’s not easy, but we make it simple?
- 56:04 Sean: People get what I’m saying. We’ve simplified it. All of this stuff is hard, but we’ve simplified it for you. I probably said it the wrong way a minute ago, but you understand what I’m saying. There’s a lot here to figure out. When Justin and I were developing this, we had multiple Excel spreadsheets with all of these formulas, cells, and values that were dependent on other values in other spreadsheets. It was a mess.
- 56:33 It’s crazy. It worked, but it wasn’t simple. We’ve custom-developed pricing tools. There is so much more that goes into this, which is why we didn’t ever want to just sell the tools. If people didn’t understand everything that went into it—filtering with your questionnaire, attracting the right clients, positioning the discussion and the conversation around value, and going through the value discover process, none of this matters.
- 57:13 There is a lot of education around it, but once you get to that point, the tools do the complicated work for you.
- 57:20 Ben: Yeah. You have to look at what the flight schedule is, the price of the ticket, and see if it’s something you can afford. You have to figure out how to get to the airport. You have to go through customs. Can I bring a carry on? You have to understand that stuff. You step onto the plane, you sit down in your seat, you turn off your electronic devices, and then the plane takes you.
- 57:47 From then on, you don’t have to worry about, “Okay, how do I navigate the plane? How do I help the plane get there? What speed do we need to go to take off?”
- 57:58 Sean: All you have to worry about is, “Is my neck pillow clipped on? Because I need that guy.” This Hawaii analogy isn’t just an analogy for me. I was born in Hawaii, in Honolulu. This is the next place I would like to go on a trip. I’ve always wanted to go back. I was born there, but I haven’t been back. I would love to go back. Whenever I do, whenever I buy that ticket for—I don’t know how much tickets from Texas to Hawaii cost, is it $600? $800? $1,000? I don’t know. Even if it was $1,000, it’s obviously worth more than $1,000 to me. The destination is worth more than the cost of the ticket. Value-BasedPricing.com.
At ValueBasedPricing.com, you can get a system we’ve spent years perfecting, solving every client problem.
The tools won’t work if the value you put into it is messed with in any way, if you’re influencing that value.