He was obviously very clear in terms of his pricing methodologies and there were great insights and things into that. I thought actually what would be quite useful maybe is to get another angle and look at how we use our pricing methodologies and what we do now.
I believe realistically that most business owners start a business because they're probably frustrated with elements of the quality that's being deliver.
Within the industry there's a few maybe who is product related and they think:
“Oh, I can do this cheaper.”
But most of my experience relates within the service industry in which case it's often not about being cheaper, but it's about delivering better quality.
Now, ignoring the fact that in the early stages you need to generate revenue because
you've got bills to pay,
you've got a mortgage to pay,
you've got rent to pay;
you've got food to buy.
Right?
So, ignore that early period because you need to be Income established. Once you then run into the point of where you've got that business established.
I think it's clear that what probably most people run into is a bit of a trap here, where what they're trying to do is be a little bit of everything to everybody.
That's probably causing the most challenge and most difficulty.
So not only is then maybe not a clear client or ideal client, it's whoever will buy our service. I think maybe there's not a clear understanding of what pains and problems you're fixing for people. Most people aren't interested in the features of what you do--- like in terms of us being accountants.
Most people aren't interested in how we fill out tax return or how we will produce accounts. They're interested in terms of how we will help them go from this pain experience to this pleasure experience.
In our view that in an accounting world, actually that's going from financial challenge and financial difficulty.
So probably working long hours, not earning great money to working the right balance of hours for you and earning the right money for you where you can live a comfortable, happy life.
Therefore, we're selling outcomes.
We're selling the benefits.
We're not selling the features.
Nobody's really interested in the methodologies that we're going to use to move you from surviving to thriving.
They're just interested in the fact that:
Can you, do it?
Have you done it with other people?
Have you done it with other people like me?
Have you been successful?
that we're going: “Okay, well I want to be the best of his quality. Yay. Fantastic. Great.”
Like that it won't be the most convenient.: Like people shouldn't have to wait a long time to work with us.
You go:
“Okay, great. So, you're going to be really high quality, but also people are going to be able to get the results or get working with you at least fairly quickly. And then we want to be competitive within the market pricing wise.”
You go: “Okay, wow. So, you are going to be the best quality but the best price and I don't have to wait at all."
And it's just actually:
And it took me a little while to realize this and work it out.
You think you got certain people or certain businesses within the industry who are really good at doing this and getting it right.
A great example is Apple in terms of actually, they don't overly make it convenient. It's not easy to get the new iPhone or the new MacBook. It is now about high quality and they don't try and compete on the price. Like the price is a little bit high, maybe. Actually, they sort of “We're mainly focusing on the quality and the experience and everything.”
And it's convenient, I suppose, in terms of how it all interacts and works together.
But actually, people are prepared to pay for it because they know that it's not available. They know it's not available later.
Another one is McDonald's in terms of, they know it's all about convenience and they sort of don't worry too much about the other ones. McDonald's is cheap, but actually it's not in terms of an example six chicken nuggets and some chips in a drink, right?
You can do that at home for a fraction of the cost of what you can pay at McDonald's. McDonald's is convenience. It's that:
“Oh, it's a long trip home on the motorway. Kids are all crying in the car because they're hungry or they're moaning and oh look, there's McDonald's.”
We know actually even like through drive thru, we can literally, we can pull in, we order it, the kiosk, pay it the next window and boom, it's in the car and we can eat it by the next window.
It's a matter of minutes. It's absolutely convenient.
If there's ever a complaint or an issue relating to all your stuff, they generally don't kick up too much of a fuss.
You know, it might be that you didn't want mayo on your burger, and they have put it on and you just go back and just go, there's mayo on this.
And you go, okay, great. Boom. Swapped, sorted.
And I think, where's that clarity?
Probably in those early stages of the business, there isn't a right or wrong answer to what's important. But you need to line it up with who your clients are.
What pain points are you overcoming and are you making decisions that contradict yourself?
And now we just got very clear in terms of we know who we can help. We know that actually there's certain people have got to get through that initial pain period.
We aren't great at helping startups, for example, because those methodologies and understanding that we have in those early stages, you sort of have to ignore them and you just have to get money in.
We need people who have got to that pain point where they go trying to extract themselves in business because they can't do all the work and then now it doesn't stack up anymore and the profits are disappearing.
This is where we can help you get control and understanding and understand why people buy from you.
Build up waiting lists if that's appropriate.
Make sure you've got your pricing right.
Make sure you've got your quality control right and.
There are plenty of people within the accounting industry who argued with me and go, you can't have a waiting list for people to join your accounting firm.
They will not wait.
We've got any given time. We've got between 10 and 30 people on a waiting list waiting to join us, and usually they can't join within the current month.
We find that that just doesn't give the quality results. We are definitely achieving and delivering, and that the client's looking to achieve and get delivered.
So often we're like:
“Actually, there's a list and You've got to wait, right? You can join next month. Then we can deliver the quality you're looking for."
And this comes back to the positioning we have before that, because actually our positioning is very much around, we're looking, our ideal client is somebody who's experiencing financial challenge and difficulty in business.
Therefore, they've probably done it a little bit on the cheap, not had financial control, and now they are prepared to not look at the cheap options because actually they've done this to maybe a few times and they've realized the cheap isn't working.
And actually, maybe we need to just move up the market that bit more in terms of this is an investment into quality.
I think there's that element actually, and we don't do this on purpose.
It's like “all you can't habit” sort of thing, but it's that actually great things you usually have to wait because they're in demand.
So, we're very clear just to go, “Look, this is our availability.”
“This is what we've got. You know, in terms of how many people come on board. This is the number of people we've got waiting, get no sales gimmicks, no, nothing like that.”
If we've got space and we don't have people waiting, we're very clear and we'll say that, but it's just that,
And they're not prepared to rush things. They're not prepared to make mistakes and get it wrong.
So, I think in terms of pricing, I think the actual pricing methodology needs to come from those earlier stages.
You need to understand the real benefits of what you deliver.
You need to understand the pathway that you are helping people on.
Where's that pain? Where's that pleasure? And how are they moving? And how are you helping them?
Where do they sit on that journey and understanding who it is, who's likely then to value what you do, and then specifically sort of talking to them like in terms of your marketing, your website copy.
The presentations that you do, the proposals that you do, it all talks to them, their pain points, the pleasure they'd like to experience.
And that actually then the pricing comes off the back of that because now you price for delivery of the outcome.
