how to price a product so I got a great question for one of my YouTube viewers
question for one of my YouTube viewers
question for one of my YouTube viewers Eduardo
Eduardo
Eduardo love you guys and in order wrote in to
love you guys and in order wrote in to
love you guys and in order wrote in to say hi Evan I have a question for you
say hi Evan I have a question for you
say hi Evan I have a question for you what happens if you found the product or
what happens if you found the product or
what happens if you found the product or service that people need as extremely
service that people need as extremely
service that people need as extremely valuable but are having a hard time
valuable but are having a hard time
valuable but are having a hard time deciding how much to charge people for
deciding how much to charge people for
deciding how much to charge people for thanks Eduardo so this is a great
thanks Eduardo so this is a great
thanks Eduardo so this is a great question and one that every entrepreneur
question and one that every entrepreneur
question and one that every entrepreneur has to go through when you’re launching
has to go through when you’re launching
has to go through when you’re launching your product your service and I’m going
your product your service and I’m going
your product your service and I’m going to give you three tips a lot of people
to give you three tips a lot of people
to give you three tips a lot of people will look at pricing based on your cost
will look at pricing based on your cost
will look at pricing based on your cost right you look at will it cost me $50 to
right you look at will it cost me $50 to
right you look at will it cost me $50 to make it so I’m going to sell it for $100
make it so I’m going to sell it for $100
make it so I’m going to sell it for $100 and make this margin it’s the wrong way
and make this margin it’s the wrong way
and make this margin it’s the wrong way to look at it because you have to think
to look at it because you have to think
to look at it because you have to think about the value first point is value a
about the value first point is value a
about the value first point is value a customer cares about what value they’re
customer cares about what value they’re
customer cares about what value they’re getting from it if you’re trying to sell
getting from it if you’re trying to sell
getting from it if you’re trying to sell me something I don’t care that it cost
me something I don’t care that it cost
me something I don’t care that it cost you 50 bucks I may only look at it as a
you 50 bucks I may only look at it as a
you 50 bucks I may only look at it as a $40 product and that’s the maximum that
$40 product and that’s the maximum that
$40 product and that’s the maximum that I’m going to be able to spend on it so
I’m going to be able to spend on it so
I’m going to be able to spend on it so your cost doesn’t matter here for your
your cost doesn’t matter here for your
your cost doesn’t matter here for your pricing your price you should look at
pricing your price you should look at
pricing your price you should look at the value that you’re adding to your
the value that you’re adding to your
the value that you’re adding to your customer how much value can you bring in
customer how much value can you bring in
customer how much value can you bring in there the more value you’re going to add
there the more value you’re going to add
there the more value you’re going to add the more money you’re going to make the
the more money you’re going to make the
the more money you’re going to make the more you can charge for your product or
more you can charge for your product or
more you can charge for your product or service okay business that one of the
service okay business that one of the
service okay business that one of the most important rules is adding value you
most important rules is adding value you
most important rules is adding value you want to make a lot of money quickly you
want to make a lot of money quickly you
want to make a lot of money quickly you need to add a lot of value to your
need to add a lot of value to your
need to add a lot of value to your customer quickly so think about how you
customer quickly so think about how you
customer quickly so think about how you can add more value how you can make your
can add more value how you can make your
can add more value how you can make your customers lives easier and what that
customers lives easier and what that
customers lives easier and what that time savings is worth to them or what
time savings is worth to them or what
time savings is worth to them or what the extra bonus that they get from using
the extra bonus that they get from using
the extra bonus that they get from using your product or service is worth to them
your product or service is worth to them
your product or service is worth to them then that’s how you figure what you’re
then that’s how you figure what you’re
then that’s how you figure what you’re going to charge ok so think about value
going to charge ok so think about value
going to charge ok so think about value added instead of cost based way of
added instead of cost based way of
added instead of cost based way of pricing your product okay number two is
pricing your product okay number two is
pricing your product okay number two is your audience you have to understand who
your audience you have to understand who
your audience you have to understand who your audience is and what their budget
your audience is and what their budget
your audience is and what their budget is and there’s two ways that companies
is and there’s two ways that companies
is and there’s two ways that companies usually goes either going after low low
usually goes either going after low low
usually goes either going after low low quantity but high price ticket or big
quantity but high price ticket or big
quantity but high price ticket or big quantity and low price ticket so you
quantity and low price ticket so you
quantity and low price ticket so you look at cars okay you have Ferrari you
look at cars okay you have Ferrari you
look at cars okay you have Ferrari you have Honda they’re both selling cars but
have Honda they’re both selling cars but
have Honda they’re both selling cars but they’re selling to different audience
they’re selling to different audience
they’re selling to different audience their audience have different budgets
their audience have different budgets
their audience have different budgets and so they sell different vehicles to
and so they sell different vehicles to
and so they sell different vehicles to them and
them and
them and it’s not just about a different price
it’s not just about a different price
it’s not just about a different price point it’s a different car completely
point it’s a different car completely
point it’s a different car completely right when you buy a Ferrari versus a
right when you buy a Ferrari versus a
right when you buy a Ferrari versus a Honda Civic you’re getting a different
Honda Civic you’re getting a different
Honda Civic you’re getting a different car okay it’s not the same car and they
car okay it’s not the same car and they
car okay it’s not the same car and they understand who their audience is and
understand who their audience is and
understand who their audience is and what their budget is so if you’re
what their budget is so if you’re
what their budget is so if you’re selling to Ferrari those guys are
selling to Ferrari those guys are
selling to Ferrari those guys are spending tons of money on it but they’re
spending tons of money on it but they’re
spending tons of money on it but they’re getting still value for their dollars
getting still value for their dollars
getting still value for their dollars right they’re they’re buying it because
right they’re they’re buying it because
right they’re they’re buying it because they feel like they’re still getting
they feel like they’re still getting
they feel like they’re still getting good value and then when you buy a Honda
good value and then when you buy a Honda
good value and then when you buy a Honda Civic it’s a completely different
Civic it’s a completely different
Civic it’s a completely different audience but the people buy a Honda
audience but the people buy a Honda
audience but the people buy a Honda Civic they’re still feeling they’re
Civic they’re still feeling they’re
Civic they’re still feeling they’re getting value for it so you’re pricing
getting value for it so you’re pricing
getting value for it so you’re pricing that according the value but
that according the value but
that according the value but understanding your target audience and
understanding your target audience and
understanding your target audience and then you build your product or service
then you build your product or service
then you build your product or service to kittu that market so you have to
to kittu that market so you have to
to kittu that market so you have to understand as a company which direction
understand as a company which direction
understand as a company which direction you’re going to go in do you want to
you’re going to go in do you want to
you’re going to go in do you want to work with a few clients who are paying
work with a few clients who are paying
work with a few clients who are paying you good money and that’s how you’re
you good money and that’s how you’re
you good money and that’s how you’re going to grow your business or you want
going to grow your business or you want
going to grow your business or you want to hit a ton of people mass-market this
to hit a ton of people mass-market this
to hit a ton of people mass-market this thing and that reflects having a lower
thing and that reflects having a lower
thing and that reflects having a lower price point for your product or service
price point for your product or service
price point for your product or service number three is stage of business you
number three is stage of business you
number three is stage of business you have to think about what stage of
have to think about what stage of
have to think about what stage of business you’re at right now you a pure
business you’re at right now you a pure
business you’re at right now you a pure startup or duty have a reputation of
startup or duty have a reputation of
startup or duty have a reputation of being established because there is a
being established because there is a
being established because there is a bias against start-up entrepreneurs
bias against start-up entrepreneurs
bias against start-up entrepreneurs because it’s riskier it’s riskier
because it’s riskier it’s riskier
because it’s riskier it’s riskier dealing with startups as a customer it’s
dealing with startups as a customer it’s
dealing with startups as a customer it’s harder to deal with a start-up
harder to deal with a start-up
harder to deal with a start-up entrepreneur than it is a more
entrepreneur than it is a more
entrepreneur than it is a more established business why you look at so
established business why you look at so
established business why you look at so I don’t know what you’re selling say
I don’t know what you’re selling say
I don’t know what you’re selling say you’re selling machines or equipment if
you’re selling machines or equipment if
you’re selling machines or equipment if I buy from you I want to make sure that
I buy from you I want to make sure that
I buy from you I want to make sure that you’re still around in five years I need
you’re still around in five years I need
you’re still around in five years I need someone who’s going to maintain my stuff
someone who’s going to maintain my stuff
someone who’s going to maintain my stuff if my machine breaks down I want
if my machine breaks down I want
if my machine breaks down I want something to come and fix it or give me
something to come and fix it or give me
something to come and fix it or give me a replacement if I’m more than your Jif
a replacement if I’m more than your Jif
a replacement if I’m more than your Jif starting you’re not going to be around
starting you’re not going to be around
starting you’re not going to be around in five years then it makes it riskier
in five years then it makes it riskier
in five years then it makes it riskier for me to buy from you say you’re
for me to buy from you say you’re
for me to buy from you say you’re selling a service if you’re a consultant
selling a service if you’re a consultant
selling a service if you’re a consultant as an example I want to look at well who
as an example I want to look at well who
as an example I want to look at well who you work with the for what other
you work with the for what other
you work with the for what other companies like me have you helped the
companies like me have you helped the
companies like me have you helped the answer is nobody you’re just getting
answer is nobody you’re just getting
answer is nobody you’re just getting started
started
started then it’s risky for me right I’m
then it’s risky for me right I’m
then it’s risky for me right I’m probably going to say no it’s harder for
probably going to say no it’s harder for
probably going to say no it’s harder for me to get to that yes because you don’t
me to get to that yes because you don’t
me to get to that yes because you don’t have the track record so matter what
have the track record so matter what
have the track record so matter what you’re selling there is a bias against
you’re selling there is a bias against
you’re selling there is a bias against the pure startups because you don’t have
the pure startups because you don’t have
the pure startups because you don’t have that track record of experience it’s
that track record of experience it’s
that track record of experience it’s riskier for me to work with you than
riskier for me to work with you than
riskier for me to work with you than somebody else so typically you’ll find
somebody else so typically you’ll find
somebody else so typically you’ll find that there’s a
that there’s a
that there’s a a price reduction that comes with
a price reduction that comes with
a price reduction that comes with startup entrepreneurs so you start by
startup entrepreneurs so you start by
startup entrepreneurs so you start by having a lower price because you need to
having a lower price because you need to
having a lower price because you need to get your name out there you need to get
get your name out there you need to get
get your name out there you need to get a portfolio and you need to get some
a portfolio and you need to get some
a portfolio and you need to get some traction some momentum to show that
traction some momentum to show that
traction some momentum to show that everything you say works actually works
everything you say works actually works
everything you say works actually works right so you have a lower price point
right so you have a lower price point
right so you have a lower price point and then as you get more experienced as
and then as you get more experienced as
and then as you get more experienced as you get better as you can add more value
you get better as you can add more value
you get better as you can add more value and demonstrate that you can increase
and demonstrate that you can increase
and demonstrate that you can increase your prices a big challenge though for a
your prices a big challenge though for a
your prices a big challenge though for a lot of entrepreneurs is we stay stuck at
lot of entrepreneurs is we stay stuck at
lot of entrepreneurs is we stay stuck at that low pricing too many entrepreneurs
that low pricing too many entrepreneurs
that low pricing too many entrepreneurs underpriced themselves and what I want
underpriced themselves and what I want
underpriced themselves and what I want you to do is think about how can you
you to do is think about how can you
you to do is think about how can you start increasing your pricing okay
start increasing your pricing okay
start increasing your pricing okay you’re adding a lot of value just not
you’re adding a lot of value just not
you’re adding a lot of value just not charging for and test it test working
charging for and test it test working
charging for and test it test working with a 10% increase and another 10%
with a 10% increase and another 10%
with a 10% increase and another 10% increase and see where you’re starting
increase and see where you’re starting
increase and see where you’re starting to get pushback from your customers
to get pushback from your customers
to get pushback from your customers because a lot of times the customers who
because a lot of times the customers who
because a lot of times the customers who can’t afford to pay that little boost in
can’t afford to pay that little boost in
can’t afford to pay that little boost in revenue those are not your ideal
revenue those are not your ideal
revenue those are not your ideal customers they’re not your best clients
customers they’re not your best clients
customers they’re not your best clients are the ones who give you the the
are the ones who give you the the
are the ones who give you the the hardest the hardest time they don’t work
hardest the hardest time they don’t work
hardest the hardest time they don’t work for business to you they don’t
for business to you they don’t
for business to you they don’t appreciate your value and you work to
appreciate your value and you work to
appreciate your value and you work to make them happy and they’re never happy
make them happy and they’re never happy
make them happy and they’re never happy and they’re not giving you a lot of
and they’re not giving you a lot of
and they’re not giving you a lot of money
money
money every entrepreneur almost can increase
every entrepreneur almost can increase
every entrepreneur almost can increase their prices and it will help their
their prices and it will help their
their prices and it will help their business so test it test and start
business so test it test and start
business so test it test and start working with more ideal clients if
working with more ideal clients if
working with more ideal clients if you’re in the brand-new startup stage
you’re in the brand-new startup stage
you’re in the brand-new startup stage you don’t have anything launched yet
you don’t have anything launched yet
you don’t have anything launched yet then fine
then fine
then fine it may even be free just for you to get
it may even be free just for you to get
it may even be free just for you to get some experience and build up a portfolio
some experience and build up a portfolio
some experience and build up a portfolio and build up a client list get people
and build up a client list get people
and build up a client list get people giving you testimonials but then start
giving you testimonials but then start
giving you testimonials but then start increasing your prices don’t be afraid
increasing your prices don’t be afraid
increasing your prices don’t be afraid to constantly check and test your
to constantly check and test your
to constantly check and test your pricing and see where you can increase
pricing and see where you can increase
pricing and see where you can increase it to the point where you’re getting
it to the point where you’re getting
it to the point where you’re getting feedback from your customers saying hey
feedback from your customers saying hey
feedback from your customers saying hey this is our limit one quick example so
this is our limit one quick example so
this is our limit one quick example so part of what I do is I work with brands
part of what I do is I work with brands
part of what I do is I work with brands I work with brands who are trying to
I work with brands who are trying to
I work with brands who are trying to reach entrepreneurs or create content
reach entrepreneurs or create content
reach entrepreneurs or create content for them help them with our marketing
for them help them with our marketing
for them help them with our marketing campaigns the very first one I did they
campaigns the very first one I did they
campaigns the very first one I did they said Evan we want you to write a 300
said Evan we want you to write a 300
said Evan we want you to write a 300 word blog post for our site we’ll pay
word blog post for our site we’ll pay
word blog post for our site we’ll pay you 500 bucks to do it you can link back
you 500 bucks to do it you can link back
you 500 bucks to do it you can link back to your site I’m like I get a link back
to your site I’m like I get a link back
to your site I’m like I get a link back from a big site they’re gonna help
from a big site they’re gonna help
from a big site they’re gonna help promote me and they’re going to pay me
promote me and they’re going to pay me
promote me and they’re going to pay me 500 bucks to do it I’m in why not but I
500 bucks to do it I’m in why not but I
500 bucks to do it I’m in why not but I didn’t just do what they asked for
didn’t just do what they asked for
didn’t just do what they asked for I didn’t just just write that 300 word
I didn’t just just write that 300 word
I didn’t just just write that 300 word I wrote 1,500 words and I made a video
I wrote 1,500 words and I made a video
I wrote 1,500 words and I made a video and I promoted it and did way more than
and I promoted it and did way more than
and I promoted it and did way more than anybody else did that they hired and I
anybody else did that they hired and I
anybody else did that they hired and I slowly started increasing my prices
slowly started increasing my prices
slowly started increasing my prices because I was adding a lot more value so
because I was adding a lot more value so
because I was adding a lot more value so wasn’t just tracking $500 now it’s
wasn’t just tracking $500 now it’s
wasn’t just tracking $500 now it’s $2,500 you want me to write a blog post
$2,500 you want me to write a blog post
$2,500 you want me to write a blog post to your site it’s $2,500 that’s what I
to your site it’s $2,500 that’s what I
to your site it’s $2,500 that’s what I charge that’s where I’m getting some
charge that’s where I’m getting some
charge that’s where I’m getting some some resistance now from clients that’s
some resistance now from clients that’s
some resistance now from clients that’s where I’ve gotten to but I’ve increased
where I’ve gotten to but I’ve increased
where I’ve gotten to but I’ve increased my prices five times I’m just talking a
my prices five times I’m just talking a
my prices five times I’m just talking a small 10% increase five times increase
small 10% increase five times increase
small 10% increase five times increase in the pricing because I added more
in the pricing because I added more
in the pricing because I added more value and it continuously increased it
value and it continuously increased it
value and it continuously increased it they went from 500 to 1,000 to 1,500 to
they went from 500 to 1,000 to 1,500 to
they went from 500 to 1,000 to 1,500 to 2,000 to 2,500 over the course of about
2,000 to 2,500 over the course of about
2,000 to 2,500 over the course of about a year and a half by testing my prices
a year and a half by testing my prices
a year and a half by testing my prices and I could still be that guy stuck at
and I could still be that guy stuck at
and I could still be that guy stuck at 500 bucks
500 bucks
500 bucks where meanwhile could be charging 2,500
where meanwhile could be charging 2,500
where meanwhile could be charging 2,500 dollars and that’s where a lot of you
dollars and that’s where a lot of you
dollars and that’s where a lot of you guys are you’re under pricing your
guys are you’re under pricing your
guys are you’re under pricing your products so remember it pricing is
products so remember it pricing is
products so remember it pricing is important remember to think about
important remember to think about
important remember to think about charging based on value the value that
charging based on value the value that
charging based on value the value that you’re adding think about your
you’re adding think about your
you’re adding think about your demographic your target audience on the
demographic your target audience on the
demographic your target audience on the chicken a four and what their budget is
chicken a four and what their budget is
chicken a four and what their budget is and think about your stage of business
and think about your stage of business
and think about your stage of business and if you’re just trying to attract
and if you’re just trying to attract
and if you’re just trying to attract clients to get started or now if you’re
clients to get started or now if you’re
clients to get started or now if you’re really trying to grow a big company
really trying to grow a big company
really trying to grow a big company start making them serious revenues don’t
start making them serious revenues don’t
start making them serious revenues don’t be afraid to test your pricing believe
be afraid to test your pricing believe
be afraid to test your pricing believe so as you’re watching the video please
so as you’re watching the video please
so as you’re watching the video please give it a thumbs up below let me know
give it a thumbs up below let me know
give it a thumbs up below let me know what you think leave a comment
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