In this episode of ‘It’s a Numbers Game,’ hosts Adam and Daniel are joined by special guest Mark Peacock, a pricing expert who runs the company Pricemaker. Mark discusses the crucial, yet often overlooked, area of pricing and shares effective strategies for business growth. The conversation covers the psychology of pricing, client profitability analysis, and the importance of annual price increases. Key insights include the impact of small price changes on net profit, the concept of price anchoring, and segmenting clients for tailored price adjustments. Mark emphasises the need for confidence in pricing decisions and offers practical tips for MSPs and businesses to enhance their pricing power. The episode also touches on common psychological barriers to proper pricing and aims to demystify this often daunting area. This engaging and valuable discussion is a must-listen for business owners looking to improve their bottom line.
00:00 Introduction and Guest Welcome
00:18 The Importance of Pricing in Business
07:54 Understanding Client Profitability
13:41 Annual Price Increases
22:33 The Psychology of Pricing
31:36 Conclusion and Contact Information
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DM Adam or Daniel to request a copy of the “Raise your prices without raising eyebrows” guide.
Connect with Mark Peacock on LinkedIn by clicking here –https://www.linkedin.com/in/mark-peacock-pricemaker
Connect with Daniel Welling on LinkedIn by clicking here – https://www.linkedin.com/in/daniel-welling-54659715/
Connect with Adam Morris on LinkedIn by clicking here – linkedin.com/in/adamcmorris
Visit The MSP Finance Team website, simply click here – https://www.mspfinanceteam.com/
We look forward to catching up with you on the next one. Stay tuned!
Transcript;
Daniel: Thanks for joining us today on another episode of It’s a Numbers Game. Today I’m joined by my regular co host
Adam: How are you doing?
Daniel: Very good indeed. And our special guest today, Mark Peacock. Mark, welcome to the show.
Mark: Thanks guys. Great to be here. Looking forward to having a chat.
Daniel: Indeed. And, our chosen topic today is, very close to Adam and iHeart. probably why we got on so well when we met, last year at, at co at a compeer event, pricing. so, mark, perhaps you’d like to tell us just a little bit about, how you approach this topic.
Mark: Yeah, sure. So, yeah, my name is Mark Peacock. I run a company called Pricemaker and we help companies improve their pricing. And the reason I focus on pricing is almost, it’s one of the last things that business owners, business leaders tend to look at. When it comes to how can they grow their business?
Mark: How can they grow top and bottom line? and the reason I think it’s like that is because people are a bit scared of pricing and what I, what part of my mission is to show business owners, business leaders, that actually there are lots of simple things that you can do with your pricing approach that aren’t difficult to apply, a really simple.
Mark: And they make a huge difference to your top line and your bottom line. So breaking down some of those barriers, some of those fears and showing people some of the helpful and interesting techniques that can be used as part of your pricing strategy. that’s one.
Adam: and we were just saying, weren’t we, Mark, before we pressed record that we all see this as such a key area. you know, especially in the, smaller end of the MSP market. and there seems to be an overall kind of reluctance, I would say, you know, with owners out there to really value what they do.
Adam: and they often sort of, I don’t know, there’s something around confidence. There’s something about. Misunderstanding of value, the value they bring, people pleasing, you know, various kinds of psychological hangups about, you know, about truly valuing what they do and pricing properly for it. and we often see this across the board with the people we work with.
Adam: and it’s generally always something that we can help with. so, so, you know, I think this is going to be a great show today where we can really dig into some of these factors and some of these techniques.
Mark: Yeah. And just to comment on that, I mean, particularly at the small end of the business size scale, you know, if you’ve got five. people and somebody running it. what’s the background of those people? It doesn’t tend to be from a, you know, strong level of commercial expertise. It’s, you know, they’re highly skilled technically, obviously, and they’re very good operationally, but possibly lacking in commercial expertise.
Mark: And as a result, tend to take them. Minimum action they need to take, to devise a pricing strategy, which is usually copy the competition and set the highest price we can get away with, or the lowest price, depending on where you are in your business journey. but there, there are lots of things you can do to get past that and create a more profitable
Adam: in fact, actually, we’ve established a new record actually of meeting someone where they revealed what they charged and they revealed the amount of hours that they worked and turned out they had 1. 88 an hour, in the MSP industry. So I don’t know if you can better that Mark, but I reckon that’s going to be, that’s a world beating record, right?
Mark: yeah, that’s sad to hear, but hopefully you
Adam: Well, we’re going to turn it around. We’re going to turn it around. and it’s going to be, you know, well, a massive improvement on that by the time we finished. So,
Daniel: thi this is a, a. Yeah, this is a big topic for us to try and tackle in our regular sort of half an hour. episode. So we’ve, we plan this in terms of, we’ve got five areas that we want to talk about. we will, we’ll try best to get through as many as we can. and if we don’t, Mark, we’ll, we’ll have you back for a part two or maybe even part three.
Daniel: Our, our first point though, perhaps you’d like to start us there. which I think is a great demonstration of the power of pricing and how it can affect the bottom line. Talk, talk us through that if you would.
Mark: Yeah. so I think what people don’t fully appreciate is how a small change in price can make a massive change to your bottom line. So in really simple terms, McKinsey give a really great example of this. And they state that for every 1 percent increase in average price, you can normally increase your net profit by 8 to 10%.
Mark: Net profits, you know, EBITDA, your net profit, whatever your measure is, you can increase that by up to 10 percent just by having a 1 percent increase in your average selling price. now that you know that fact, what’s stopping you taking action on your pricing? just to add to that, to just to make it more, even more impactful.
Mark: So Warren Buffett. the world’s most famous and successful investor. So he says that pricing power is one of the most important things that he looks for when deciding whether or not to invest in a business, because he knows it’s the leading indicator of enterprise value and therefore the amount of return he’s going to get on his investment.
Mark: So companies with strong pricing power generate high margins. And the message that I want listeners to take from this today is that any business can improve its pricing power and therefore generate higher margins. You’ve just got to think a bit more smartly and a bit more creatively about how you tackle your pricing.
Mark: So, yeah, don’t ignore pricing because it seems scary. Embrace pricing because it’s one of the biggest levers that you can pull to increase bottom line growth.
Adam: yeah, completely agree. And just using that 1 percent increase. that works, doesn’t it? If we translate that onto a million pound business, 1 percent is 10 K assuming no other costs come in, then that 10 K goes to the bottom line. Assuming a hundred K offer it that’s 10 percent increase.
Adam: So, so the numbers are there for you to see, and indeed, if you look at, say, a 5 percent or a 10 percent increase on that 1 million, all of a sudden you’re now doubling that profit from 100K to 200K. So, so 100 percent growth, from a 10 percent increase. So, so it’s absolutely huge.
Daniel: And, just breaking that down into an even smaller, more manageable number, like if we were going to take a, an action from today’s, today’s episode, if you currently charge 50 per user per month, increase the price to 50 and 50 pence. And you’re there
Mark: Exactly that. So, I mean, look, there’s lots of ways and means which will come onto how to increase prices, but just as a mental exercise to think it’s not difficult to calculate, is it? You’re basically just putting a one or 2 percent increase on your current average selling price or on your total revenue. Yeah. and that up, that uplift all. Falls through to the bottom line because there’s no increasing cost. Price is the only lever you can pull. that doesn’t increase costs.
Adam: Agreed. and, before we move on to the second one, I’ve got to add. If you don’t do this annually with the increase in inflation at a minimum, of course, you’re actually reducing your prices every year. So, so that has exactly the same effect, but in reverse as was discounting, of course, so, so, you know, it’s vital that the, these things are treated within the overall context of, you know, an overall plan, I guess.
Adam: and it’s vital that owners really, you know.
Mark: that.
Daniel: and we’ll come on to annual price increases, in one, one or two topic topics times. So, your second point, Mark was one that Adam and I, are also, advocates for, for addressing. talk us through that, if you will.
Mark: So a key first step in improving your pricing is understanding individual client profitability. So what I mean by that is because you, could you create a list of all of your clients? And let’s say you’ve got 100. So for one to a hundred and you rank them all in terms of revenue, can you add another column which shows their actual gross profit margin contribution, both in pounds?
Mark: and the percentage margin. If you can, and you’ve got that data accurately captured, brilliant, well done. Because the next step from there is now you can make some sensible decisions about pricing. And the quick analysis that I encourage any business owner to do when you’ve got that data is just to plot all of those clients on a bar chart.
Mark: With highest on the left and lowest on the right. So from the left hand side, you’ve got your highest contributing clients contributing, say, I don’t know, 80 percent gross margin. And then on the very right hand side, at the far right hand side, you’ve got your lowest contributing clients who may be only contributing 10, 20 percent gross margin, or maybe they’re even negative.
Mark: They’ve gone below the line. So great. So now you’ve got a clear plan of action, and for any client. with less than 40 percent gross profit margin, draw a big red box around that group and decide, right, what are we going to do with all of these clients? We need to take some action, which could be to increase prices.
Mark: It could be to change their service proposition. It could be to change how you resource those clients, but you’ve got to be aiming for, at least a 40 percent margin, I would say on any of those client clients. Sorry, Daniel, you had your hand up.
Daniel: I think we’d, we’d agree the, perhaps the immediate barrier for most MSPs, well, and the immediate mistake that most, most MSPs could make here, because of the mix of the cost of sale for an MSP is that there’s obviously a product subscription service, but there’s also a, there’s also a time, a labour element, and, being able to, you know, factoring labour into that calculation is critical to getting that seeing a 40%, you know, which is probably the sort of labour loaded gross margin, level that you should be aiming to be above of rather than below.
Daniel: But, but yeah, that, that’s the, that, that’s the key thing. and even if you don’t, even if you don’t know your exact labour cost, it’s better to put an assumption in there, rather than not. Yeah.
Mark: just, yeah, exactly that. So when your cost of sale, your Microsoft licenses and all that, you know, you should know those numbers fairly clearly. For labour, if it’s in house, you know, a simple rule of thumb, just take the total employment costs, the annual salary, plus all of the additional employment costs, pension, etc.
Mark: Divide by 250, number of working days. So that gives you a cost per day and then apply a utilization rate. So if they’re only working 80% of the time, then you divide that number by 80%, so it raises the effective cost per day and the, and then you’ve got a number, right? And it’s 200 pounds a day or whatever the number is, and you can divide it into hours and so on.
Mark: So it can be as simple as that. Right. But if you’re not doing that, you’re not even trying to understand crop client profitability. But, you know, a simple assumption like that can really take you a big step forward to give you a rough idea about what your profitability by client looks like.
Adam: and, if you’re not doing this already and you’re using one of the major PSAs out there or other third party, analytics tools, one, one of which we supply as well. You can get the, this gross margin information, as long as you’re putting all the data in correctly and putting all your time correctly out of these tool sets and you can put in your fully, burdened, engineer costs, et cetera, into those.
Adam: So, so there’s no excuse. I don’t think for owners out there. to analyse all of this, you know, spend some time looking through it quarterly, perhaps, you know, tweaking things as you need to stay on top of this, otherwise just flying blind on you. That’s the thing you’re just getting.
Adam: You’re just guessing. and it can really make a huge difference. you know, going back to the first point, a few little, changes of the dial on a few customers, you know, can suddenly make huge differences to the bottom line.
Mark: And if you’re let it with within your business, you’re letting your operations manager or an account manager make decisions on pricing and you’re not overseeing that and they’re just looking at it a revenue and a relationship level, they’re not going to make the best decision on your behalf because they don’t want to put prices up.
Mark: They don’t want to upset the customer. But if they haven’t got insight into margin, they could be making your business worse because actually you could be, you could have a negative situation.
Adam: Yeah. A hundred percent agree. Everyone needs to be on board with it, right? The account management, the salespeople, your operations managers, they need to be on board with.targeted clients, which are underperforming from a gross margin perspective, we start, I think we used to have them on listed on a board.
Adam: I can’t remember exactly, but I think we might’ve had them listed, you know, on a board as ones that we wanted to ensure we didn’t want to over service for any reason, you know, or there was extra sensitivity around we hand the way that we managed that account. so, yeah, this is a huge area. you’ve got to get the data, you’ve got to get the information.
Mark: But once you get it, it’ll make a huge difference. It really will. So yeah, that’s step number one, I would say.
Daniel: ab absolutely. Point, 0.2, step one. so, for anyone still following, our numbering system, we’re now on, we’re now onto, element. element 3. 3, and, Adam kind of gave it away a little bit earlier, but, there’s a lot more, there’s a lot more to it. So, talk us through, annual price increases.
Mark: Yeah. So, the first thing is you have to do an annual price increase. As Adam said a minute ago, if you don’t, inflation is eating away at your margins. If you do nothing over 10 years, you’ll lose 30 percent of your buying power due to inflation alone. So the second thing is, well, what’s the best way to do it?
Mark: So I, I do see a lot of businesses and this is across the whole business community, not just in tech or MSP land is just applying a flat across the board pricing, correct? Right? So we’re going to increase our prices by 3 percent or inflation plus 3 percent or whatever the number is. And we apply that number across the board.
Mark: and I think it’s common because everybody does it. So everybody else does it, because everybody does it, if that makes sense. But nobody’s stopping to think, is there a better way, or what’s the problem with that? The problem with it is, if you imagine you’ve got a very small client who’s only paying you a couple of hundred pounds a month, you know, 3 percent for them might be neither here nor there.
Mark: But if you’ve got a really large client and they’re paying you thousands of pounds a month, 3 percent might be material. And they might cause them to rethink their whole approach and their relationship with you as a business holder. So why on earth would you treat all your customers the same, exactly the same, when it comes to such a critical thing as pricing?
Mark: So my general advice is never. Never apply a flat across the board price increase to all of your customers because they all have different levels of price sensitivity and willingness to pay. Far better to take a targeted approach and you can break your customers into segments or into groups and just imagine them to be small, medium, large.
Mark: And think about, well, what would be an appropriate price response or price increase proposal for each of those three groups? And at the large end of the scale, you know, your big strategically important customers, clearly you don’t want to upset them too much. So you’ve got to treat them with gloves, right?
Mark: And you’re going to be very cautious and you’re going to put your best foot forward and look to maybe recover inflation as a minimum. But for those at the bottom end of the scale, and particularly for the ones where having just done your client profitability analysis, if their gross margin is really low, you know, you need to be sticking at least 10, 15 percent on those guys, just to bring them up to a level that’s acceptable to you.
Mark: And do this understanding that it’s okay to lose a couple of unprofitable clients, and because a few might leave, but you’ll be better off. As a result of having lifted your entire customer base up a level and lost a couple of unprofitable clients. You’d be far better off doing that than worrying about all of them and doing nothing.
Mark: So yeah, segmenting your price increase approach and applying a different price increase to each one is the key there.
Adam: Yeah, I again, completely agree with that approach. I never understood blanket approach at all. It’s just too complex. All the different shapes and sizes and relationships out there. And, and. You know, there’s always, this is a messy area, isn’t it? It’s not a perfect area where all clients are priced in exactly the right way.
Adam: You know, you’ve taken them all at different stages of growth and different maturity in your business and clients from 10 years ago aren’t paying what they should be, you know, compared to clients today, et cetera. So, so there’s a lot more to it. I’m also, I also think to some extent as well, you want to be pricing clients.
Adam: So that almost you do lose one or two because of it. In other words, it needs to be at a level where it’s causing some of your lower level clients to, to feel uneasy about it. You know, you know, that pricing needs to be, if everyone’s just willingly taking it on and accepting it, it’s probably too low, quite frankly.
Adam: And I’d
Mark: So in the SaaS world, it’s well understood that 3 to 8 percent churn annually due to price is a good thing. Right? Because what it means is you’re constantly pushing up the envelope of Willingness to pay and affordability. and it forces you to, understand and accept that’s the trajectory that we’ve got to be on to grow this business.
Mark: And it’s absolutely fine to lose 5 percent of our customers every year. That’s B2B.
Adam: not necessarily B2C. I
Mark: the figures for B2C. I do know them for B2B, but yeah, it’s fine. Churn is good as long as you’re doing it for the right reasons and pushing up prices. If you’re churning for other reasons, that’s not good. but yeah,
Adam: say you can have, you can double the price and get a hundred percent churn and you’re still in the same place, but with half as much work to do,
Mark: exactly that, you know, you have fewer clients and you’ll be more profitable. I mean, what’s wrong with that as an outcome? Nothing at all.
Daniel: really interest. Interesting. And I guess I’m in two. I’m in two. I’m probably, fibbing. When I say I’m in two minds, I’m in about four, four or five minds on this topic, if I’m being honest because, I, I guess there’s a, there’s a. what would be, perfect execution and there’s a pragmatic and a journey that I think some people will be on.
Daniel: And there’ll be some listeners to this who haven’t increased prices at all for 10 years. And the thought of, of implementing this, you know, is overwhelming and very scary. So, in, in some ways, I think I would be, advocating, coming up with a plan that has a realistic time frame to implement something around this.
Daniel: And if the first step is, is a flat across the board model, and perhaps not fully, observed across the entire client base, excluding some of the ones that you feel are, Particularly price sensitive, then, or even experimenting with, almost a client by client approach in terms of, to reduce the risk.
Daniel: Then, then my view would be that’s better than doing nothing at all and putting this off until a perfect point in the future. and, but I think just thinking about it, having it front of mind as an important thing on that to do list is key to building up.
Daniel: the courage and then developing the confidence to move on this. So, so I guess, yeah, if someone’s listening a bit overwhelmed by this, then, yeah, baby steps are fine.
Mark: I do have a booklet on this, which I’ll happily send you the PDF, Daniel. And I don’t know if you can include it in the show notes or something like that. It’s a download, but, I’d be happy to offer that. It’s a 15 page guides to the do’s and don’ts of how to implement price increases.
Daniel: That’s brilliant. And we’ll find a way to share that, even if it’s just to. To DM us and request a copy. we’ll find a way to, to distribute that. that’s really good of you. Thank you.
Adam: it’s an interesting, really interesting area. the number of discussions I’ve had over the years, you know, some people saying, Oh, just go and do it, you know, just. Just bung your prices up 20%, just do it. Well, it’s not as simple as just do it, is it? You know, there is, there’s all sorts of systems, worries, concerns, you know, whether they’re correct or not.
Adam: and so going back to what Dan was saying, it is absolutely appropriate to test the water. Right. You know, try something, try it with a few clients, what reaction do you get? was that what you were thinking? or is there, or is it surprised you? you know, and also how are you delivering the message?
Adam: You’re just going to send an email or are you going to meet with them face to face and talk about it? You know, these, all these factors can influence how you approach, what could be a thorny subject, for me, I think there’s a lot to be said around putting the time in. ensuring the relationships in the right place, the service provision is in the right place.
Adam: Clearly, if you’re gonna bump the price up, the last thing you want is rubbish service. So you’ve gotta make sure there’s a number of other spinning plates working in the right way. face-to-face meetings are always good, you know, and then starting to deal with the issue, and learning from the process, fine tuning the process and then getting into a better rhythm and improving it over, you know, on an ongoing basis.
Mark: Yeah, you’ve got to build your pricing muscles, right? And this is how you do it. You have a go at things and you learn just like every other process in your business, people don’t because they’re scared of it. So they do nothing. but you know, there’s some simple things that you can do, as I said earlier, that will make,
Mark: and just like going to the gym, you dread it beforehand, but you do feel better afterwards. exactly.
Daniel: and actually this leads really neatly as though we’d planned, had some design behind this episode, but this leads really neatly into point four. So, Mark, give us a bit of an intro into point four.
Mark: Yeah. So this is about the psychology of pricing, and this is one of the favourite things I like to talk about when I do talks on pricing, because actually, once you start to understand it, you realize actually it’s quite, it’s not difficult to understand. It’s quite simple, and there’s some really powerful techniques that any business can use to help sell and communicate the value of what you do.
Mark: So if you take the concept of a price anchor, for example, so an anchor is something is the first thing that goes into your mind when you think about something. So somebody gives you one price and then another price, they judge the second price by relating it to the first price. So what does that tell us?
Mark: Well, we can use price anchors in a number of ways that help. Subtly influence our buyer’s expectations of value and quality. So let’s just say you, you’re selling a service and it typically costs, I don’t know, 2000 pounds a year, for example, it doesn’t really matter what it is, but it’s two grand a year.
Mark: So normally you might try and sell that service by saying, well, here’s all the features, here’s the benefits, here’s the value, this is what you can expect and so on, and the price of that is 2000 pounds. So when a buyer hears that, what are they judging that number against? You don’t know. So they could be judging it against the competitor’s price.
Mark: They could be judging it against an internal budget. They might have no idea about how much these kind of things cost. So you’re not taking advantage of the opportunity to give them a reference number. And the way you do that is by creating a high price anchor or another price offering. So let’s just replay that sale scenario where you’ve got a couple of options and you say to the buyer.
Mark: Okay, Mr. Buyer, we’ve got a couple of options to share with you today. We’ve got our all singing, all dancing, deluxe gold plated service, and that’s 5, 000 a year. Or you can have our standard service, which doesn’t include all the gold, the bells and whistles, but still does the core things that you need.
Mark: And that’s 2000 pounds a year. So what’s happening now in the mind of the buyer is they’re evaluating those two prices and packages together. More often than not, people in that buying situation will think that 5k option is too expensive. Sounds great, but I don’t need it. So therefore in comparison, The 2k option sounds good value.
Mark: What it’s also doing, don’t forget, is that if you’re communicating that you can do, deliver a 5, 000 pound a year service, it’s going to create a high perception of quality. Wow, these guys must be good if they can deliver that level of service. So you’ve done two things. you’ve created a high perception of quality in the mind of the buyer, and you’ve given them a price anchor that you’ve controlled.
Mark: to let them better judge and evaluate the value that they’re going to get from the lower priced option. So price anchoring is your best friend. And, the mistake that many people make is that we start by communicating our lowest price first, don’t we? And we see this in shops. We see it online prices from 99 P prices from 50 pounds and up.
Mark: But the trouble with that is that’s the price anchor that you’re giving your customers. So if the first number you communicate is your lowest price, guess what? When the actual price for the service that they actually want to buy is higher than that, you’re causing them psychological pain. So you’re far better off, and you just need to practice this and get confident with the idea, of communicating your highest price first and then coming down.
Mark: So you can say, well, we’ve got three packages. I’ve got a 500 pound bundle, which does everything. We’ve got a 300 pound bundle, which does all of the standard services you’d expect. And we’ve got a budget price bundle at 200 pounds. So you’re coming down in price rather than going up. So think about how you can use price anchors to influence, perceptions of quality.
Mark: Create a reference price that you’re controlling for your buyer and then communicate your prices from high to low rather than low to high so that they’re coming down in price and seeing that, it more psychologically favourably.
Adam: Could you, help us explain or explain how to handle the scenario where you have an initial, discovery call with, a prospect on the cell phone and you’re trying to weigh each other up and you’re trying to work out, are they a fit or not? And, you know, are you going to be able to move them along to a meeting?
Adam: And they say roughly what your services cost and the inclination is to go low, perhaps my inclination. Yeah, you know, we used to be to go low because you don’t want to at this stage, reject the opportunity because you want to have a meeting face to face where you can talk about all the value of what you do and you know, they don’t necessarily understand what that is at this stage.
Adam: So there’s that kind of, how do you kind of choreograph that at the same time in doing surf course, you’re going.in the opposite direction to, to, to anchoring. In fact, you’re anchoring a low figure. Oh, it’s probably only 500 pounds. Oh, I don’t know. Maybe it’s a thousand pounds, you know?
Adam: and of course reality is it’s 2000 pounds or something like that. So, so this, I think this is a really key area. I think it’s really important and really often overlooked. So, so what would your approach be in that situation?
Mark: Yeah. So firstly, you need to have a really good idea of what the typical spend rage is for a small, medium, or large client. And then you’re going to tailor your answer depending on how you know, and based on the sales interview that you’re having, you need to pick up on some clues to tell you roughly whether they’re a small, medium, or large size client.
Mark: Once you’ve understood that and you think, okay, well, I think there are medium clients. So they could be in the market for, you know, fees between, you know, five to 10, 000 pounds. Now the temptation is to say, well, You know, fees start at, you know, X per user, and then you just multiply everything up from there.
Mark: A better approach is to say, well, for clients like you, for businesses like yours, we typically charge fees in the range of. X to Y. Okay. so you’re giving a fairly wide range. Now that range could be from 5, 000 pounds to 10, 000 pounds a year or whatever the numbers are. Even better to build on the language that I just previously used would be to say for clients like you, our premium clients are paying 10, 000 pounds.
Mark: And our standard clients are paying 5, 000. So you’re communicating the highest priced first. That will be best practice in that kind of response handling situation. So again, not being afraid of communicating that really high number first. you know, you know, some people might. React slightly to that, but you do that with confidence because, you know, you’ve got some cheaper numbers to come next, you know, you’ve got the low end of the range to talk about, or you’ve got a series of bundles or packages to talk about.
Mark: So, yeah, so that’s how I would deal with that, that situation there.
Adam: And again, it’s a training process, isn’t it? It’s the pricing muscle. It’s just getting to the habit. of. Presenting, your pricing in that way.
Mark: exactly that. Yeah.
Daniel: and I guess as well, from a position of confidence, if you’ve, an abundance of opportunities and you’re practiced and you’re winning business at the higher price, then you’re going to be more. Confident and adept at pitching that higher price. And, if however, you’ve, a scarcity of opportunities and you’re unpractised and it’s irregular, you’re going to be immediately discounting, dropping your price, because there’s so much pressure on this one, one
Adam: So it’s so closely entwined, isn’t it? It’s all about how you feel, you know, that day you can try it that morning and literally, you know, have a different type of conversation in the afternoon.
Mark: Yeah, absolutely. It depends on how desperate your need is for new business. the value of the client opportunity. your where you’re at in your business cycle. All of these things play a part competitive intensity and so on. But I think the first thing to do is to get confident about your price messaging.
Mark: Right. Work it out, right? You only need it on one sheet of paper, right? Small clients look like this. Medium clients look like this. Large clients look like this. What’s the price range? What are the typical values and how can we best communicate that in a way that supports our value? It doesn’t make us look cheap because we don’t want to look.
Mark: There’s always somebody cheaper than you. Right. There’s always somebody cheaper than you do not play the price game because you will not win. It’s no point. You’ve got to play the value game and work out ways to get better at delivering and justifying the value that you create. And just
Daniel: I’ve got so many more questions, even on this. point alone, before we even get to, to, to the fifth point, we’re out of time though. And, therefore, as we suspected, we are going to have to invite you back for, for another episode. and, I’m sure I’ll have thought of even more questions by then.
Daniel: you’ve been, you’ve been incredibly generous with, with your time and sharing your wisdom today, Mark, and, really appreciate the, the offer of the, the 15, page guide, which will include a way of sharing that with our listeners. if anyone, wants to carry on the conversation, how best should they get in touch with you,
Mark: find me on LinkedIn. So Mark Peacock slash price maker and send me a message and happy to have a chat with anybody who’s got any pricing questions.
Daniel: including what your pricing is?
Mark: Yeah, maybe. Great.
Daniel: Lovely, Mark. Thank you very much indeed for your time. And we look forward to welcoming you back on the, on the podcast very soon.
Mark: Thanks for having me guys.
Adam: Mark.