How To Price Your Services To Make MORE Money & Give MORE Value (Masterclass 3/5)

if you're having a hard time getting customers to buy from you you got to understand pricing psychology in this video we're going to break down the science behind it and a key method to doing it effectively to increase your sales the third core essential out of the five is pricing psychology so at this point you understand the Persona that you're serving under by your psychology you understand how to handle the sale and we are easing into what I would assume is what's the investment what do you mean when you say pricing psychology and what do

we need to know about it there's a lot of debate around how to price and why we price the way we do a lot of it comes from an old model I think it's an industrial model where there are Factory workers in an assembly line making stuff and we measure the amount of value based on the time or effort that we put into something and these are very old Concepts it's labor theory of value which is things in the market the free market it should be only priced as much as the necessary labor to create

it and that's kind of usually closely associated with Karl Marx Marxism so people who look at Americans with stain say you're you're capitalist and this is peer greed because you're charging more for something than the necessary labor to produce it but it doesn't explain human nature and why we pay more for Fendi Prada Gucci Louis Vuitton bag a pair of shoes you don't understand that there's a gentleman on Tick Tock what he does is he buys luxury wallets and bags and then he goes to deconstruct them all he rips them apart because he's a leather

crafts person so he'll say this is a good top grain leather this is really horrible I hate this coating and then he burns it does all kinds of things and he says okay based on the components this leather is worth this it tells you what the market price is for and then he tells you how much with the necessary labor to produce it and then it adds in a little bit extra for profit so he says this wallet sells for 3 500 but really the fair value for this is 275 dollars so he's reinforcing this

concept that the leather only costs so much and the labor is only worth so much and if you can only add in a certain amount of profit Why Pay More this is a fundamentally flawed concept because what he's done is he's failed to understand by her psychology this is why we do it in his order mode it's because when I buy something I start to form my own identity Annie aleppa said how you spend your money is a vote you cast for the world you want to live in okay let's understand this now I'm gonna

pick on an easy target let's talk about fashion most people think it's cars that are destroying the world there's plastic bottles or other kinds of things but the number one polluter in the world now is the fashion industry so it used to be in ancient times I'm just talking about like 150 years ago you would probably only own a few pair of clothes and you'd wear them all the time you take good care of them you'd clean them and if it broke he would fix it and then something happened there was an ample supply of

cotton mostly coming from the southern plantations in America so cotton was cheap and so now they can make more clothes and then what we do is we fast forward to today we have something called Fast fashion from Brands like h m Zara and other like it and what they do is they churn over an incredible amount of goods that are being transported from country to Country for fabrication because it's the cheapest way to do this it's not only using Arbitrage to underpay people to make Goods but it's also creating a huge carbon footprint the cotton

is grown in one country it's shipped to another country to be processed into fabric then they ship to another country for fabrication and then it shipped to another country for delivery and for sale so we're talking about a lot of things moving around in order for you to have a shirt that's eight dollars and an eight dollar shirt as I witness falls apart almost instantly in one wash and so they don't really care the price of goods now have become so cheap it's actually cheaper for you to buy the new one than just to have

it professionally clean which is ridiculous and this is not to mention the amount of clothes that they don't sell and just go into the garbage now what we are asking ourselves is why do we want to buy this versus why do we want to buy something that's made really well a high quality garment that's going to last that we're going to wear more than eight times that's the average amount that people will wear a garment eight times I believe so we're able to buy something that lasts longer we'll reduce our footprint but we'll have to

pay more for it let's get back to the whole goods and pricing psychology here what you don't understand is people want to pay more for something you just need to give them a reason to this is fundamentally going to upset a lot of creative people because we think what we have is a commoditized service and you'll see in the comments on the logo video how people are so quick to jump on their own grave and say screw that guy for doing the logo for eighteen thousand dollars I'll do it for 400 I'll do it for

25 and it's a race to the bottom because they think people are motivated by the lowest price but what we need to do because I'm like an evidence-based thinker is to go and look in the real world to see how you spend money and to reflect on that so that that informs how you should sell as you can tell I'm nearsighted Mo are you I actually don't know I don't think so you do wear glasses uh no okay so you're not you have good Vision then yes so I am nearsighted okay that means I cannot

see far and now I'm getting old I can't even see near either so we got all kinds of problems welcome to midlife midlife baby midlife here we go if I want to have corrective surgery like the Lasik I can go to the mall and get it done I can go to another country South America I can go to somewhere else or do I want to trust my eyes to some place that is reputable that's clean that might be more expensive than the discount right and I keep thinking about this do I want to buy discount

bottled water or do I want to buy premium bottled water and yes you might say well easy for you to say you're in a place of privilege and I accept that I am what creatives often don't understand is when you price something low it signals to their client something and we can get into that and when you price something High relatively speaking it signals something totally different I'm going to give you some of the answers now in the workshop we'll do this a little bit differently if you're enjoying this video I just want to let

you know I'll be leaving some information about an upcoming European Workshop tour in the description below go check that out because I'll share this and so much more that's it let's go back to the video if you meet with two firms or let's say three firms one has a high price one has the mid price one has a low price this is why things are triple bid oftentimes we will not buy the lowest price we will feel like the highest price is too premium we don't need we'll pick the one in the middle it's like

Choice architecture so we understand that right like when you go into Apple site do you buy the most cranked up MacBook Pro or the most cranked up version of the iPhone or do you want usually buy the one in the middle like I don't want the baby one because you know I'm better than that but I don't want the extreme Pro extra large with 2 000 Mega gigabytes of memory either with the M2 Max Pro chip or whatever they're calling it these days it's too much so we usually pick the one in the middle because

what we understand at this point is we're contextual thinkers it's very hard for us to make a decision absent context is this room hot I don't know go outside was really cold outside this is not that hot it's actually really comfortable you know it's the Goldilocks syndrome Goldilocks doesn't know which bowl of porridge to eat until she tastes three bowls apart she said this one's just right so what you're trying to do with pricing is to be just right so one of the things that we're going to explain to you is why you should provide

three options if you want to make more money just provide three options a low cost or ideal cost and a premium cost and there's way to structure this by doing so you no longer invite the client to bid someone else if you give them one price there's no contacts so I'm going to call to other vendors and we'll get into all these Concepts and one packet for you and help you to understand a key concept there's no such thing as a commoditized service or product there's just a lack of imagination there's a quote from Ohio

Miyazaki one of the most celebrated Japanese directors who've directed Spirited Away which is reality is for people who lack imagination if you believe you're a commoditized service or product that you're selling then you just lack imagination that's from Ron C Baker his book implementing value pricing and they're examples of this Alex from Rosie talk about this in this book 100 million dollar offers where he's like what are the uses of a brick like we can go to one of those home improvement stores and buy brick and bricks are not expensive if we say well we

have a supply of bricks what can we use it for you can use it as a paperweight you can use it as the door stop a lot of different things you can use a brick for and you go through this exercise in our Moses book you understand how used brick determines the value of the brick and not all bricks are created equal so don't be a brick I want to leave this video with the last quote that you said reality is for the people that lack imagination so don't lack imagination use that imagination to kind

of put yourself into these three lessons that we just talked about to elevate whatever stage you're at in your freelance business and we are then going to leave you on a cliffhanger for number four and number five which is irresistible offer and crafting it so crafting an irresistible offer and then attraction marketing if you enjoyed this episode if you've gotten value from this first of all thank you for listening bottom of my heart thank you share it with a friend it costs nothing to do let's together educate and inform form the people if you're in

such a position where you have a hole burning in your pocket money saying I need to be spent come and see us live workshop I'll teach you and I promise you something if you show up I would deliver to you in orders of magnitude more value than you've paid whatever it is that you pay I will deliver X multiplier on top of that one concept from one of the five modules that we're going to talk about could change your business so that you'll make thousands of dollars more thousands of Euros more thousands of pounds more

and the reason why I know this is because absolute strangers for no other reason would send me a note saying you help me to do this amount of business this year and imagine they're only watching 60 year old videos at this point and then people the proof is here the evidence is here randomly send me money all over the place from five dollars or even a dollar to thousands of dollars and it's incredible because it reaffirms me that we're doing the right thing we have this strange and crazy belief that we can actually change the

education model by totally looking at it from a different point of view I'll keep making this content if you keep watching I'll be able to hire a bigger team if you keep buying and so I thank you for that and I want to remind you one message you're not defined by your past the future is what you make it and on that note I will see you in the future [Music]