In this episode of LMScast, we have Loren Fogelman from (www.businesssuccesssolution.com). She has been helping entrepreneurs and agencies with pricing, financial advising, and accounting services since 2009. Loren believes in driving more income through increasing pricing by value creation.
What is value?
For course creators, this is essential to nail because this is what people will come to your platform for. Your brand value, or the value that your multi-instructor platform can create, will be the defining factor between the learner enrolling in your course or going to a course marketplace like Coursera or Skillshare.
People come from all walks of life. Some may seek just the utility from your courses, like “I want to earn money with this skill”. Some might want more security, like “I want to transition in my career to ensure my promotion.”. Then some people care not for utility or safety but a cause or status. These people may think, “Doing this course, I will become more acceptable as a leader, and the accreditation will be my status symbol.”
Creating value for each of these segments and understanding their aspirations is key to more conversion, rather than making only one option that is not flexible enough. But any way you price your segments, remember that the middle segment will attract most of your buyers.
One thing you must consider as a product owner is to consider the lifetime value of the customers. For example, for Loren, it is yearly. So, to keep people still engaging with her products throughout the year, she has created some other minor services that offer sustainability. Another great approach is to educate your clients to make better decisions at the end of their lifetime value, so they stick with you next time.
How to increase your pricing? First, understand your niche customers and whom you work best with. Then specialize your services, and you can easily create value pricing. Finally, communicate that with the broader end of your niche.
You can get a screening questionnaire for clients by Loren at businesssuccesssolution.com/lets-talk/ and adapt your questionnaire modeling it. You can also get a free resource from her on 10 Steps To Package And Price Your Services.
At LifterLMS.com, you can learn more about new developments and how you can use LifterLMS to build online courses and membership sites. If you like this episode of LMScast, you can browse more episodes here. Subscribe to our newsletter for updates, developments, and future episodes of LMScast. I’ve got a gift for you over at lifterlms.com/gift. Thank you for joining us!
Chris Badgett: You’ve come to the right place. If you’re looking to create, launch and scale, a high value online training program. I’m your guy, Chris Badgett. I’m the co-founder of lifter LMS the most powerful learning management system for WordPress. Stay to the end. I’ve got something special for you. Enjoy the show.
Chris Badgett: Hello, and welcome back to another episode of LMScast. I’m joined by a special guest Her name is Loren Fogelman she’s at businesssuccesssolution.com We’re gonna get into pricing, we’re gonna get into value. We’re gonna get into rates and mindset around that. But first, Loren, welcome to the show.
Loren Fogelman: Thanks so much, Chris. I am excited about what we’re going to dig into today.
Chris Badgett: Yeah, I’m pumped. So let’s start with just the deep question of what is value like if I’m if I’m an expert in something or I’m an agency providing services, how do I even think about what value is?
Loren Fogelman: Well, I think the first thing is to recognize that value is subjective. Chris, what you care about and what’s important to you and a priority to you is going to be different from me as well as the people that are joining us today. And a way to be able to look at that is vehicles on the road. If you are looking at the vehicles on the road, there’s going to be some people that have the economy vehicles like a Geo Metro or they care about is getting safely from their home to that meeting. And then the majority of vehicles might be that mid size range, possibly a Volvo where that driver is concerned about safety not only for themselves, but their family. And then there’s going to be the luxury vehicles like the Tesla’s which are a status you recognize it as soon as it drives by and that person is looking for a certain type of driving experience and might also care about the environment and to recognize that you actually have those three types of clients coming to you interesting new services also is the people who might be looking for something more basic. They might be price sensitive, most of your clients or to be in that mid range, and then you’re going to have some premium clients as well. Therefore, you want to understand value from their perspective, depending on which category there is doing as opposed to looking at it from your perspective.
Chris Badgett: I love that. So we don’t actually as a consultant or coach, we don’t have to pick like the premium only or the middle option or the bottom it’s better to have a spread, right?
Loren Fogelman: Absolutely better to have a spread and also to give your clients options of how they want to work with you as opposed to just one option of if they work with you or if they’re going to move on to another alternative.
Chris Badgett: We can’t talk about pricing without getting into packaging. So let’s unpack that more. How do we if we have like kind of a three phase a good, better, best or beginner intermediate advanced? How do we think about those packages in terms of what’s inside and how clients can kind of easily pick the right one for them?
Loren Fogelman: First, I would like to actually define packages because it might not be familiar to everybody that’s joining us today. I see packages as being results based so when you bundle certain tasks or activities or other things together then those things will deliver a certain result that you can highly values and to recognize that you want to be able to offer three packages instead of 1453 is what they call the sweet spot or the charm number for most people. And therefore consider looking at having what I call a silver gold and diamond package. This silver is going to be the bare minimums for the clients that need just the essentials or maybe their price sensitive or they can’t afford something higher level yet they want to work with you. And then everything from the silver goes into the gold but the gold has others and it meets the needs of the majority of your clients similar to the fact that they is primarily those mid sized cars on the highway as opposed to premium or the budget costs. And then the third tier is your diamond package which is going to have all the things from the silver and the gold but it’s going to have more maybe this is done for you services. Maybe this is what access to you. Maybe they get a quicker response. But these are the people that they always fly first class no matter where they go. And you want to be able to understand that for them. They care probably more about time and speed, then about the cost. And that because of that they’re looking for a different type of experience working with you. So once again, you want to have three different options of packages, the silver, the gold and the diamond, recognizing that most you clients ought to be in the gold but every now and then somebody’s going to surprise you and want that diamond premium package where if you never gave them that choice, they never would have up leveled and they wouldn’t have been as high value of a client you would have been leaving money on the table.
Chris Badgett: Well, I’ve never heard that explain so well. What about the like the actual price points? How do we find I know you have a background in like the accounting market or kind of business markets or what like how do we even think about how many how many numbers like should be there where to kind of position our pricing how do we how do we figure out those those points.
Loren Fogelman: You want to challenge your comfort zone and there’s many different ways to price the majority of people will probably price on an hourly rate. They’re going to calculate the time by their hourly rate and then come up with pack prices for their packages. Some of them will do a fixed fee, which is typically your hourly rate, as well as your course and maybe you’re going to build in some profit for that. I want to just let you know that either one of those leaves money on the table. That’s because once again you’re pricing from what’s important to you what you value which is your time and costs as opposed to looking at it from the clients point of view and what they value. I will let you know that if you make the jump to what is called value pricing, you could probably earn two to three times more for the same exact work. But that’s because you’re looking at things from the clients perspective, instead of just focusing on your time and cause when thinking about pricing those services.
Chris Badgett: Let’s say we have a pricing box three boxes area on our website. And we have an opportunity to put one message or headline above the pricing table like what’s the kind of structure to position the offer from a value based prices pricing standpoint. Like how do we like what kind of what would the what would the words say? Let’s say you were I know you have a lot of experience in accounting. What would an accountant say above the pricing table to really prepare the viewer to be best in line to see the value?
Loren Fogelman: Well, I think Chris, what’s coming up me is that there’s a difference when you look at this for courses, or SAS products, or looking at really more of a service based entrepreneur courses and SAS products absolutely list your prices there. I don’t think that you ought to be listing your prices when you’re doing some type of service for a client because the fact that it’s a higher price point and they don’t really fully see the value of working with you yet. Therefore I would rather them get on your calendar, then just make a decision based on price. So that’s the first thing but I think the other thing is understanding what is it that’s important to those clients in those three different categories. I’m going to just go ahead and stick with accounting professionals because that’s what I do. So maybe the big The Basic package is going to be pay your taxes on time never be late again with taxes. And those people just want the basics with the financials so that they could go ahead and file on time and not have to worry about having late fees or having to do an extension. The second one is going to be grow your business with insights, you know financial insights to make the best decisions possible. And so those people might be growth minded. They might be looking to know if they can expand or add another person to their team or if they’re even pricing their services. Right. And so they want that insights. And the last one would be possibly let us be your CFO and those want a chief financial officer to be able to help them really grow their business. They’ve got to be in a fast growth mode. They understand the value of having someone give them insights as far as the pricing goes as far as where they might be living leaving money on the table in order to improve their profit margins. So those are some of the things to think about. As far as how to tag what your three different levels would be.
Chris Badgett: I love that! And you know, there’s this there’s this thing, you know, the concept of having like a fractional CFO or fractional, some other kind of executive role like you can create a service where you don’t always like somebody doesn’t always need to hire somebody full time to do great, amazing work. So I love that you said that like, it’s like a C-level role in your company and it’s expensive, but it’s not like a full time commitment so you can create value there, right?
Loren Fogelman: I’m going to say it is an investment, it is not an expense. It is an investment because if someone’s going to be paying you, let me give you the essence of value pricing is that the client that hires you and want to pay two or three times more than they would maybe somebody else doing something similar. They need to believe that what they gain from working with you is greater than the fees that they’re paying you. That is the essence of value pricing. They need to believe that what they gain from working with you is greater than the fees that they’re paying you.
Chris Badgett: Yeah, that’s awesome. Yeah. And you’re just kind of disconnecting from time. It’s all about the value of the ROI. Right.
Loren Fogelman: Well, that’s another really interesting point is that people actually value speed. Yeah, people will pay three to four times more to FedEx something overnight than to go to fedex round, and it’s probably five or six times more than if they went with the Postal Service. The other thing is that people pay for Amazon Prime because they want it delivered overnight tomorrow. And that just shows you that speed has value to people. When you position it better in a way that makes it an advantage to them. They don’t want a long drawn out process they want to get this problem solved that behind you for as quickly as possible.
Chris Badgett: I love that. I heard recently from a friend people pay for speed certainty and insight. So, speed also that it certainty that it’s going to be done right and correctly, and insight that like kind of like so I can figure out what’s going on here. I’m sure you can think of an example of that and those things are all this they’re all just super valuable to the right person who wants to move fast can afford it, wants to achieve the outcome with a higher degree of certainty. I love that.
Chris Badgett: Let’s let’s go into the app. Well, I don’t know if you would call it the application funnel. But a you know getting on the calendar. What would you how would you choreograph the sales process there? In terms of like qualifying the lead, like making sure you’re getting on the phone with qualified leads, and maybe it’s different for a beginner versus somebody who’s advanced and really busy. And then how do you kind of go through the steps of finding the right package for the person without perhaps being too direct or you know, like, sometimes when you get on a call and immediately the first question is what’s your budget? That’s like a little too soon sometimes. So like, what advice do you have on the choreography of that process?
Loren Fogelman: Okay? So there’s like three or four questions in there and want to make sure that I give everything that goes so if I’m missing something, Chris, please partner with me and make sure that I answer those questions to the very first thing is that you talked about whether it would have been different for someone maybe first starting out versus someone more advanced. I want to say build your practice for where you want to be instead of where you are now. Therefore, go ahead and start to prequalify people that you’re speaking with, because your time is important, and I want to really make sure that you’re creating that boundary right off the bat. That way you avoid ending up with clients that tend to be low value or someone that really just wanted to pick your brain and they were never interested in investing in your services. So
Chris Badgett: Using accounting as an example, what are some like qualifying questions like that aren’t as direct as like, what’s your budget or whatever?
Loren Fogelman: Okay, I’m gonna just say if you want to know qualifying questions, you can go to my website, it’s at businesssuccesssolution.com/letstalk all one-word businesssuccesssolution.com/letstalk. Go ahead and you can model my questions.
Chris Badgett: Nice. Haha. Nice.
Loren Fogelman: So I’ll just give you the shortcut right there. You might need to work out one or two, but most of them work for service-based entrepreneurs. And you want to know why they’re reaching out to you what the challenges are, what they would like to achieve, and if they are interested in investing in that solution. So that is pretty much the four questions that I think would be helpful. In knowing what it is. Oh, the other thing that I have on mine is what was last year’s income, and what would they like their income to be for next year? So I do ask about the money part.
Chris Badgett: In accounting, you need to know that so I mean, there’s more direct money conversations. And I’ve also heard people say doing things like team size, and there are other ways to kind of triangulate what you’re trying to find out too. So,
Loren Fogelman: Yes, and it depends on when you’re first starting out. You’re probably going to work with a wide range of clients. Whereas you move forward and you grow, you might become more aware of what makes someone a high-value client as opposed to a low-value client, and the questions that you have for pre-qualifying will help you to be able to understand that so I think the main thing I just want to say to that Chris is take away your calendar link with anybody has free access to your calendar, have them go ahead and fill out those poor questions because the ones that do not want to ants answer yes I’m willing to invest in my services, or maybe the ones that say no, they’ll never fill it out and it saves you that headache of having someone who just wants to get a lot of free information without having to pay for it.
Chris Badgett: That’s awesome. That’s some sage advice there. What about recurring revenue or you know, increasing the lifetime value of the customer or like kind of how do you position the package and the pricing so that I mean accounting lends itself definitely to an annual thing, but you also mentioned like ongoing CFO stuff. How does one kind of position the pricing without overcomplicating it for recurring revenue or increased lifetime value over time?
Loren Fogelman: I agree with looking at the lifetime value of a client. It’s not something that everybody does what happens with so many service-based entrepreneurs is that they bring someone on at one rate, their rates go up over time, but they leave that legacy client, that original client at the old prices, and as a result of that, what started out maybe as a high-value client becomes a low-value client because your price have changed but your legacy clients are at their old prices. What I want to look at is being able to recognize that packages on an open-ended from now until eternity. I want you to once again have boundaries and the more that you have these boundaries in place, the more that you’re protecting you and your time and you no longer feel like a slave to your business. So what you want to do when you have packages is make them for a set amount of time. You could make them for three months you can make them for six months, you can make them for a year, I wouldn’t make them more than a year. I and I personally have 12 month packages so people engage with me for a year because it just takes that long to make the changes to be able to increase your profits and also free up your time and I want to make sure that the results we get stick over the long run. So think about how long do you need to work with someone for them to get the results that they hired you for? Is it three months, six months, nine a year and then have that be a finite package and then you revisited before the package is over to look at what it would be like moving forward and the opinion to the next package that way you never stuck having a client at your old rates and everybody else’s at new rates. Everybody now will be on the same page.
Chris Badgett: Can you give us a possible like just kind of dialogue of how to communicate that price change even if it’s like the kind of the same prep, more or less the same package for another year, but the price has changed? How do you recommend communicating that?
Loren Fogelman: Well, this isn’t going to be a pitch because I don’t think that anybody ought to be pitching their services or selling the services. Because of the fact that I know as a customer, I don’t want to be sold to and as a service provider. I don’t want to sell to people. So we’re you know both sides of the table. Nobody wants to be pitched or do a pitch. Therefore I look at what’s called having a value conversation. Whether this is with someone new potentially looking to work with you, or a current client that you look into re-enroll into another package. What you want to do is have a conversation that focuses on what’s important to them and what they value as opposed to what’s important to you. You want to find out what it is that they want to achieve over the next 12 months where things are currently what is some of the things that are preventing them from possibly reaching that goal and what are some of the frustrations coming up? Then you want to let them know how you might be able to achieve that possibly faster with better results than they expected or with less frustration. So once again, this is what I call a value conversation and really looking at things from their perspective. What is important to them what they want to achieve, where things are now what the gap is, and how you can help them to do that. And then also having them understand that you had the solution. So I call this connecting the dots, where you want any conversation to be understanding what’s important to them. So you’re looking at their point of view. You’re educating them so you’re not pitching them. You are educating them about how you could assist them with achieving that solution, and possibly given them the peace of mind that you can do this together. And then by doing those two things, connecting the dots between their problem and your solution, they see the value of moving forward and working with you.
Chris Badgett: That’s awesome. I love that and we often don’t even think about it. For example, when we get a new smartphone and it’s more expensive than it was last time we got one it’s just the new version. Not it’s not a pitch really it’s just hey, this is the price going forward.
Loren Fogelman: Exactly.
Chris Badgett: Um any thoughts on add ons like if some somebody wants something, it’s outside the scope, but maybe you have like an add on service you can bolt on or they’re like an additional like that’s like in construction, you know, they call it a change order or out of scope kind of thing. And then also related to that. How do we protect ourselves as consultants from getting too far away from our core offer? And going to custom or something like that?
Loren Fogelman: I think that customer might actually be attracted to some of the service providers that are joining us today. And I want to acknowledge that because they like the variety or it will let them go ahead and expand what it is that they offer as well. Let’s get insights. But what happens that makes you more efficient and more profitable in your business is when you have things as productized as possible. You do the same essential deliverables. For each package. But even with the county professionals, every single one of their clients needs something a little bit unique to that particular client. What you want to do then with your silver, gold and diamond packages, is have templates. You have core services that are in each one of those, and you’re able to go ahead then and come up with that price for each of those different packages based on that template. And then you can adjust it accordingly. If somebody needs something a little bit different, you can go ahead and adjust the particular packages to accommodate that client’s needs. And make sure that you adjust the pricing as well. So this way, instead of coming up with a brand new set of packages for every single client that you’re meeting with, you’re going to be more efficient because you have a template of packages and then you just need to make certain adjustments. The other thing that I would say to avoid scope creep and scope creep is a client asking for something else that’s not in a package is make sure you have a work agreement that really spells out what it is that you are doing for them and also addresses how your policy or processes when maybe the package needs to change for them. So I would go ahead and educate them upfront about this is what I’m offering have it all listed out so everybody’s on the same page that means that you’ve been great with communication, and also teach them if something goes if they need something and additional. It’s something that you will review and it will probably adjust the pricing for the package.
Chris Badgett: That’s awesome. Any other kind of productized productizing a service wisdom you’d like to share just because I know sometimes it’s hard. I see a lot of smart people consulting and they, they sometimes they just kind of get in this like I’m just constantly inventing the new any other advice on how to really lock in those packages and like kind of create the architecture?
Loren Fogelman: Yeah, I want to first say Chris is so many business owners entrepreneurs are creatives. They love the strategy so they’re always creating something new. And by doing that you never quite figured out your lane because you’re always adding something in or you’re making an adjustment. And that was true for me also in the beginning. When I first started out I was working with a wide range of service-based entrepreneurs because I didn’t know who was going to be the best fit for me. I was focusing on a lot of different things as to what I offered because I didn’t know what my specialty was. I want to say that eventually, you could be more profitable and able to charge higher rates. If you know your niche and or a specialty a niche is who you work with and we get the best results with it could be an industry or it could be a particular type of person that you just have a great chemistry with. And the specialty is what you do for them the problem that you solve. Some people have just one or the other and some people have both. I happen to have both my niches accounting professionals and my specialty is helping them double their income working half the time. Because of that, I’ve been able to come up with my system. And I just want to go ahead and share that my system is called the raise your rates formula. So what I do with almost every single client and what I talk about all the time, and I’m a deep matter expert on is how to be able to price your services and raise your rates without feeling like a slave to your business. And the five step is knowing who your high-value client is. The Step number two is being able to communicate your value. Step number three is packaging your services. Step number four is value pricing, which is what we’ve been going into today. And step number five is consultation mastery, so you never have to sell your services. You can have what I call a value conversation with clients. So that’s something that’s possible for your business. And by doing that, I’ve been able to go deeply into something so even though I’m a creative, and I love being able to challenge my limits, I can go deep into something and I am never bored because I always find different nuances. or ways to approach something that really gets better results. And I find it deeply rewarding because it is going to consistently challenge my limits too.
Chris Badgett: That’s awesome. You mentioned niching and you mentioned I love that distinction between niching and specialty by the way, I hadn’t heard it put that way. That’s really cool. What about like as an example, I know a lot of people sometimes they have a hard time choosing their niche. And maybe they have like several options to kind of choose from that around them and they don’t know how to choose. What are some things that make the accountants a good niches an example or what kind of characteristics would you look for in a niche market that can help people make that commitment or decision?
Loren Fogelman: Well, I want to say that it was more of a process of knowing who I didn’t want to work with then knowing who I did want to work with in the beginning. In the beginning, I worked with a wide range of service-based entrepreneurs. And then I would say so I’ve been doing this since 2009. So it’s been an evolution, I would say maybe about four or five years into it. I realized that most of my clients were either creatives that were in the marketing space and some or they were in the accounting space in some way. So I had to and I actually loved both because they gave me more variety creative so tons of fun to work with because they love to strategize, they are full of ideas. And then accounting professionals are more likely to follow through and they just want you to tell them how to do it. I really enjoyed the variety and I went back and forth with both for probably another four or five years. So this was not an overnight process. What I realized for me is I wasn’t being effective, trying to attract two different types of industries that were very different. I really wanted to find the one that I could just hone in on and five years of going back and forth between the two. I decided to choose the accounting professionals because it was a better match for me personality-wise. And also strategically I saw a better fit with what I was doing as far as the pricing piece. And they were more comfortable dealing with financials and money than the creatives were so that was part of why I moved in that direction was because I found I was getting better results with them.
Chris Badgett: Do you have any advice around referrals getting referrals or like lead generation, once you’re kind of in your niche and moving? Yeah, what can you advise there?
Loren Fogelman: I believe that referrals are definitely an important part, but there’s many ways to do it. Depending on whether you’re more extroverted or introverted. I actually tend to be more of an introvert than an extrovert. Therefore, what works for someone who’s more outgoing is going to be different than for me. However, what I did is for many years, I was involved in my local chambers. I was involved in a networking groups specifically BNI business networking International. I was also starting to do more speaking over time, and from being getting out there and not hiding behind my computer and remaining a best-kept secret but being out there I was able to meet people and over time, I found people where I could add value to them, and they could add value to me. We worked with a similar type of client, and we were able to close refer because we weren’t being competitive. We were being collaborative so a lot of referrals from me come from people who work with the same clients as I do, and we’re able to add value. And a lot of the value that I add comes from speaking I love to have conversations like we’re having right now Chris and I have a couple different firms. Or businesses where I come in regularly and speak to their clients or to their followers. And by doing that I’m able to give generously, and the people who know that they’re a good fit for what I want to put what I do the problem that I solve, they take those next steps so that’s one way of realizing that you have referrals is being able to find a way to give to someone else’s audience. And from that you get leads. The other way to look at is how can we refer back to each other because we both solve a problem that our clients need and that you have a referral partner. So a lot of referral partners in the accounting space would be accountants with CPAs and bookkeepers, or tax advisors and bookkeepers, and so they both work together for helping the clients with their financials.
Chris Badgett: That’s awesome. You mentioned a lot about value pricing, but in terms of you know, really helping people make more and less time what is the what are some other secrets or methods or techniques you have there to that businesses are often the or consultants are sitting on that they may be able to tweak to cause that to happen?
Loren Fogelman: Well, I think that what I would like to do is actually give an idea as to how it value pricing so that interest someone and they’re confused about how to get started. Do you mind if I share a way for them to get started with that that might be actually more helpful.
Chris Badgett: Yeah.
Loren Fogelman: So I believe that going from either fixed fees or an alleyway to value pricing is messy. It challenges you limits and let’s just agree on that. So the way that I do it is called good, better and best price. And you mentioned that a little bit before. And this is similar to learning to ride a bicycle. And when you first don’t let it ride a bicycle, you have training wheels, until you get your balance and you feel a little bit more confident and then you can take off the training wheels. So I’d like to explain how I teach good, better and best because this is a way to move towards value pricing. You have clients that are looking to come to your work with you. And what you want to do is with the clients come in and work with you figure out what you would charge for a monthly rate go ahead and come up with that fixed fee that you would normally give them. Usually, it’s your hourly rate by how much time you think it’s going to take. And we want your client. We want these clients now to have your new good rates. So what you’re going to do is take that fixed fee that you would normally charge them and multiplied by 1.5. That’s going to be your new good rate. After you enroll three people at your new good rate, we’re going to move up to the next tier which will be your better rate. So once again, you’re going to have people coming to you you’re going to calculate how much a monthly fee is going to be for them. And now you’re going to go ahead and multiply it by 2x. This is going to take a little bit of courage it’s going to challenge your limits because you now actually earning two times more for the same exact amount of work no more time no more doing both. It’s just that you’re getting more confident with how to have that value conversation with potential clients and you realizing that clients on as price sensitive as you thought that they were. So you now go ahead and row three people at your new better rates and then we’re gonna go to the top tier, which will be your best rates, because you have more confidence. You’re getting better at the end one way conversation. You’re going to have these new people coming to you, you’re going to come up with what that initial fixed fee would be. And now we’re multiplying by 3x. You’re going to be offering these new potential clients services at three times your original rates, and go ahead and you will start to enroll them also, you realizing that these clients that are enrolling with you a new best rates are actually a more enjoyable client to work with. They value you they follow through. They really respect what you do and they don’t treat you like an employee or take your services for granted. And as a result of this, you have better cash flow you’re more profitable with your services and allows you to either take some of the money that you’re making and reinvest in your business, or now you don’t need as many clients and so it frees up some of your personal time that you can now get back you don’t feel like a slave to business any longer. So that’s how you do the good, better, best pricing. In the beginning, you have your flat fee you multiply it by 1.5 for your new good rate enroll 3 people, we move up to the next tier and those you multiplied by 2x and the best rate is 3x and it makes a difference it is possible and it changes your entire business model because of the fact that you moved to this new way towards value pricing.
Chris Badgett: That’s great and I really appreciate you sharing that very valuable framework. That’s awesome. I’ve seen it come up. It’s come up for me and as a software guy in terms of psychology and price and price increases and things like that. And you mentioned at the beginning of what you were just saying that it’s like there’s some mental movement that has to happen. But what’s behind the psychology of where people kind of freeze or have dealt with prices what’s kind of going on there because I think it helps people to understand maybe some of the emotions under the surface or why sometimes this feels so much harder than it should be to especially increase our prices, especially by if we do it by a lot.
Loren Fogelman: I believe that pricing no matter what size your business is, whether you are a single solopreneur or whether you are top of the Fortune 500, pricing is one of the most challenging things for any business to do. And so let’s just get on the same page. It is still something that you know, I think about all so I don’t always just go ahead and oh, I should raise my prices and then tomorrow I have my new wage. It’s something that I also have to work through and continue to challenge my limits on. But a lot of times what happens is that we had these thoughts of I can afford to lose clients, they can’t afford my new rates. How can I expect someone else to pay those rates when I couldn’t even wouldn’t even pay those rates myself? My clients will leave me. What if someone doesn’t sign on? And a lot of these are based on fear. I will let you know that. That is because we’ve most of us came from the workforce when we were first an employee for somebody else. And when you start out working for somebody else, your income is always based on time either you’re getting an hourly rate or you’re getting a salary which is still connected his time somehow. So when we go into a business and there’s so much that needs to be done, we just go with the simplest model that we’ve always seen and know ourselves which is charging an hourly rate. It is the most efficient because all you have to do is calculate your time by your hourly rate. And then you know how to price your services. But I will also say that even though it’s the easiest, it’s not the most effective, which means that yes, it’s the easiest, you know what your rates would be but you leaving so much money on the table probably two to three times more than what you could be charging if you want with the value-based pricing so it’s the fears of things coming up who am I I don’t have enough time in the business. I don’t have credentials. My mentor doesn’t even charge those prices. How could I do that? So they’ve all scarcity and fear base that hold you back and keep you in your comfort zone. But that’s why I handhold my clients through this process, because when I handhold them through it and we work through those things, and we figured out what the new rates ought to be and how to be able to have that conversation with the clients. Then they actually start to get results and they see results pretty quickly. It’s not a warm painful drawn out process. They can see changes as soon as like within a week or two or maybe within 90 days. So it’s really quick. And it changes everything for them as far as their quality of life because they get their life back. As working with high value client. They don’t need to tolerate those headache clients that they wish would go away. Everything changes about their business model.
Chris Badgett: Wow, that’s awesome. That’s Lauren Fogelman from businesssuccesssolution.com Any final words for the people and where can they go? To find out more about you?
Loren Fogelman: Well before I was sharing about how to move away from an hourly rate into the value pricing with the good, better, best. I actually have a free handout that gives you the steps to do that and start packaging services. If that interests you, go to businesssuccesssolutions.com/value and you can get immediately the different steps to be able to start to package and value price your services. Once again it’s businesssuccesssolutions.com/value and you can get started today.
Chris Badgett: Loren thanks so much for coming on the show. You added an incredible amount of value here in less than an hour. We really appreciate it.
Loren Fogelman: Absolutely. Thank you so much, Chris and I am cheering for each and every one of you to really go ahead and make this change. It’ll make a difference for you as well as for your clients.
Chris Badgett: And that’s a wrap for this episode of LMScast. Did you enjoy that episode? Tell your friends and be sure to subscribe so you don’t miss the next episode and I got a gift for you over at LifterLMS.com/gift. Go to lifterlms.com/gift. Keep learning, keep taking action and I will see you, in the next episode.