Advanced pricing workshop 2012

5 September 2012Advanced pricing mentoring group

Knowledge Effectiveness Frequency of use TOTAL

Value drivers

Pricing

Demonstrating value

Pricing effectiveness quotient

Knowledge Effectiveness Frequency of use TOTAL

Value drivers 7 5 5 17.5%

Pricing

Demonstrating value

Pricing effectiveness quotient

About the day

9.30 Introduction

10.50 Coffee/tea break

12.40 Lunch

2.50 Coffee/tea break

4.30 Close

Last time

Ideal client profile

Little things

Your practice as a “club”

What do we measure

£3.50

£3.54

£7.80

£7.88

£0.95

£0.96

A thought

Tax saving = £50,000

Success = 90% +

Hours = 10

Fee = £12,500

Rate = £1,250 ph

Fee = 25%

Value?

Tangible versus intangible benefits,i.e. solutions vs experience

Perceived value = f ( Perceived benefits

Perceived price)

Gianni

Franco

QuestionsQ

10%

=

Answers

Questions

300%

Key learning points

1.2.3.

Putting it into practice

Tangible versus intangible benefits,i.e. solutions vs experience

Perceived value = f ( Perceived benefits

Perceived price)

Mortgage references

Mortgage references

How to price

How to add value

How to explain

Putting it into practice(again)

Menu pricing (top down pricing) Options Language How to price (link price to value) Add tangible value Add intangible value Benefits Unique selling points Presentation Guarantees Service standards Payment terms

I enclose a cheque for £ ________ (inc. VAT) made payable to Bloggins & Co]

I wish to pay £ ________ by: Visa q Mastercard q

Card No: Security No:

Start date: / Expiry date: /

Cardholder’s name:

Cardholder’s address:

Signature:

insert practice name

Key learning points

1.2.3.

The biggest research studyin the world

Behavioural economics

Loss aversion

Social proofInertiaAccommodation

“Do defaults save lives?” Eric J Johnson & Daniel

Goldstein

“Total Accounting Solution”

Step 1There is always a default…

So make it the outcome you want

Choicearchitecture

Behavioural economics Loss aversion – we hate the idea of missing out

Social proof – we like to do what others do

Inertia – we go with the status quo

Accommodation – we quickly get used to new

status quo

Step 2

Offer it to everybody as the default “Our standard service is what we call the Total Accounting

Solution”

Carefully designed script to explain they can opt out

“Most businesses like yours go for of our Total Accounting Solution because it gives them everything they need to earn more money with less effort, and also pay less tax. But if you don’t think it’s the best solution for you, you can always downgrade by taking out parts of the package.”

Step 3

Carefully designed script if they want to opt out

“If you take that out of the package the price comes down by £300, but just to be clear, you then won’t get to see how well your competitors are doing, and you won’t get a profit improvement action plan based on those findings, so you may miss out on extra profits as a result.”

Step 4

Do it in person – not by post

Do it with every prospect

And do it with every client…

… every year until they choose the default

… and it becomes the new status quo

And…

Key learning points

1.2.3.

Most firms with the highest average fees do it

Design a big package

Offer it as default – “this is how we do business”

Opt out, rather than opt in

Key learning

Stretch your thinking!

Ryan Deiss

Conversions Revenue

$197 340 $66,980

Conversions Revenue

$197 340 $66,980

2 x $97 977 $189.538

Conversions Revenue

$197 340 $66,980

2 x $97 977 $189.538

3 x $97 1008 $293,328

4.46 x increase

People focus on the $97 not the $291

Key learning points

1.2.3.

Your feedback, and…Your key actions