Understanding Product Pricing with 7 Stage Advisor

Are you worried your business isn’t growing at the rate you want? 

7 Stage Advisors helps clients accelerate and sustain their business growth. They help your team discover where to place your efforts for maximum impact. They coach, mentor and train their clients to take their firm to the next level.

To 7 Stage Advisors, Growth isn’t just about the company getting bigger. It is also about becoming more efficient, more effective, and smarter. They believe that any organization can bounce back and become better if they work towards it.

They employ business experts from around the world who have been certified in the 7 Stage Growth Methodology.

Carl Gould is a Certified 7 Stage Advisor & Executive Coach. He is a life and business coach, a serial entrepreneur, and is certified to train others in business management. He is the author of the “7 Stages of Small Business Success”.

0:00
Welcome to the thoughtful entrepreneur Show. I’m Josh Elledge, founder and CEO of up my influence.com. We turn entrepreneurs into media celebrities, grow their authority, and help them build partnerships with top influencers. We believe that every person has a unique message that can positively impact the world. stick around to the end of the show, where I’ll reveal how you can be our next guest on one of the fastest growing daily inspiration podcasts on the planet in 15 to 20 minutes. Let’s go. Right with us right now. We’ve got Carl Gould. Carl, you are the chief discovery officer for seven stage advisors. You’ve been in the media, you’ve been all over the place. You do a lot of great work with business professionals, entrepreneurs. And it looks as though I’m really excited to chat with you because one of your main areas of expertise has to do with pricing, and I think the pricing could be one of the most most confusing aspects of product development. And and so and if you don’t mind me, I would love to talk about it because it’s good timing that we’re having this conversation because we’re in the midst of kind of trying to decide on some price points for a product that we really are going to be hitting hard in terms of launching to our partners. So first off, welcome. And thank you for joining us.

1:27
Well, thanks so much for having me, Josh. And I really appreciate the opportunity to speak to you and ultimately to your audience and share whatever I can do to help them take their business to the next level.

1:36
Sure. So Carl, what makes you an expert in items like pricing and business development and growth?

1:45
Well, I’ve been I’ve been at the forefront of this niche since 1991. had launched over 5000 businesses and mentor the launch of 5000 businesses and work and we’ve done business us now in 35 countries. So we get to see what’s working everywhere at any given time. So currently we don’t we’re doing business in a dozen countries. And so we see the macro trends as well as the micro trends. And where we have settled in and, and our approach to business is, we have decided very strategically to become a generalist. In other words, we work across industries, and over 80% of the innovations of the 20th century, came from the front lines of another industry. And so we are what are called cross sector experts. We find out what’s happening in one industry or sector and we bring it over and we parachute it down and drop it into another sector. And all of a sudden it becomes innovative, because that sector is not thinking that way. But we were able to borrow something from another industry and bring it to them. And so that’s what’s given us this area of This niche expertise over the years?

3:03
Well, okay, so you have some experience.

3:07
You’ve helped a few folks.

3:08
And and so one thing I’d really love to zero in on is this subject of pricing. And, you know, before we get into that, I’d really love to get your perspective on consumer behavior and where consumers have, how they have evolved over the past 10 years. Now, based on a lot of work that I do as a consumer expert, and as a as a someone who’s studied and led consumer behavior. It’s my belief that consumers are a little bit more skeptical than they ever have simply because they have tools that allow them to do that, like never before. We don’t have to just take the marketing, you know, the marketing’s word for it. We don’t have to take a salesperson’s word for it, we can actually use the internet and do a little bit of it. Due diligence, you have any observations in that in that regard?

4:04
Yeah, I would not, I would not only agree with what you had to amplify what you’re saying, I think they’re not only more skeptical maybe because they’re more educated and have more tools to analyze the purchase. But But if you tack on, you can’t underestimate what happened 10 years ago, when the world went upside down due to the global financial crisis. In mass, companies broke their promise to the consumer.

4:29
And

4:32
they also broke their promise to their their employees. They didn’t have a choice. The whole world went upside down. Global Markets lost 36% of their value. the mortgage industry dropped 60% almost overnight. And the least of all worries, but this, I’ll give you the perfect example. I had one of you probably came up with it because it was brilliant. I had one of those business cards from my local pizzeria that said You buy 10 pizzas, you get the 11 for free. And I was on number eight. I was on number eight, right 2008 2009 happened a year later, I’m ready for my ninth pizza. I drive up I’m all psyched. I’m walking away. And guess what they’re out of business. And, and you know, the first thought in my mind was, I was upset, beat now I should have been more empathetic like, Oh my god, what happened? Why are they out of business? But I was more upset because they broke their promise to me. They said to me, Carl, if you’re a good customer, if you carry this card with you, if you make sure you present that I will, I will stamp that card. And by golly, if you buy 10 for me, I’ll reward you with the 11th pizza. Well, I was eight pieces in I was not the reason they went out of business. I was the reason they were in business. And I was very upset with them that they broke their promise to me because I’m not the problem. Someone else was the problem or they were because they didn’t manage themselves well, and you know what I lost out on my free pizza. So now when somebody says to me, hey, call me Give me one of those business cards and you stamp that baby 10 times and you’ll get the 11. Three. Well, guess what? I’m not. So I’m very suspicious about that now, because I had my heart broken before.

6:14
Yeah. You know, and I think that we’re in an age to that as business owners, business professionals, entrepreneurs, you know, you just, you can’t get away with, you know, bad service. Because everybody is an influencer to some degree. And so, oh, yeah, one bad customer experience. And all of a sudden, you know, that can get picked up that can go viral. I mean, it could be scary. I mean, even if it impacts, you know, a couple of city blocks, I mean, that can absolutely impact business. If you’re a local mom and pop retailer, you can’t afford to mystery people. You just can’t get her. I don’t think you can get away with it. today.

6:55
I’ll tell you what rankings and reviews are the great equalizer on both sides. You know what the Uber is a great example because I hop in an Uber, and with one minor exception, and I’ve used Uber in 20 countries thousands of times, with one exception. I have been treated wonderfully on every level and gotten exceptional service, because you know what my ranking and my review matters. Whereas I can’t tell you the last time I got half that level service from a local taxi driver, who, you know, there was no ranking or review review mechanism for them. So it’s the great equalizer. It’s brilliant. I love it. Yeah, you got to take it with a grain of salt. And I don’t necessarily believe that just a bad review does you win, but a chain or a pattern of bad reviews and bad rankings? Absolutely. Will will destroy your business.

7:52
Clearly. Yeah, absolutely. So, so chrome on your website, it’s Carl gould.com CARL GOULD calm, and I see that you get into the realm of pricing. And I mean, how does someone I mean, just very broadly, how do you set prices?

8:16
Well, I so I, I’m a firm believer that when you are setting your pricing, you need to, you need to look in the eyes, the whites of the eyeballs of the person that you are expecting to buy from you. You tell them what your product and services, what their features, advantages benefits are, what you’re charging for, what your expectation of the client is, as far as when they’re going to pay, how they’re going to pay, what frequency they’re going to pay, and how often you expect them to come back. And if you have the right message. Pricing is all about traffic and offer. Okay, so it’s the offer side right? But you have the right offer, you’re going to get the traffic and if you you You look them at the right in the whites of the eyes, and you tell them what you want. Now, you’re going to get one of three, you’re going to get one of three responses. First first response is, oh, okay, I get it. Hey, well, good luck to you, sir. And then move on. You haven’t priced yourself right. Something about it is not compelling. The other one is Whoa, whoa, geez. Oh my gosh, does that come with a trip to Hawaii with it? What are you talking about? And they automatically eliminate themselves. So you’ve you’ve overshot the market. Here’s the response I’m looking for. There you are, you build a value, you tell them all about your product and service. Then you tell them the price and they go, Oh, he, Josh. You know, I had it in my head. It was going to be a little bit less. So there’s that twinge. They haven’t left. But there’s a little twinge. They’re like ooh, you want five I was really thinking it was going to be four. Okay. You know, Josh, that’s a little bit more than I was thinking or that I can afford. But I want to work it out. I want to how can we work together is there do you have options is there financing I came all the way cash was. So in other words, you want them to feel the value of the price. And, and you want that and the price be just a tad more than they were expecting. But you want it to be a touch of a stretch so that they feel fully committed to the product. If I don’t have to like Netflix, God bless them. They did it on purpose. They said, Look 812 bucks a month. You only have to think about it. Just do it. If you don’t watch a movie, you’re not going to be upset. But if I go to the local theater, man, they charge $19 for that movie, but when I’m taking my family and it’s $90 for tickets, another $50 for food, I got own I’m know I want to watch that movie. And so I’m committed. Like, I’m like, I get psyched up for like, we’re going to the movies tonight. Right? Because I know because they’re not only charging me more but they are giving me more of an experience. And here’s here’s the thing about pricing, Josh that I’ve learned is that pricing is the number one way that you communicate with your clientele. The day that you the day that you give your clients your pricing, two things happen. One, you are announcing to them who you are as a provider? Are you the premium version? Are you the mid version? Are you the value play? You’re telling them who you are, but more importantly, you’re telling them who they are. You’re telling them what kind of shopper they are. Right? There’s, there’s there’s many many jokes that that that go along the lines of this and and it’s been attached to genders and ethnicities and types of people. So we don’t have to get into that. But the joke is basically this, what is it? What are three words that this type of person is never going to hear? And the answer is attention Walmart shoppers, mm, meaning there’s certain people that would never shop at Walmart because it doesn’t reflect who they are, or the product line or the type of buyer or the type of products that they’re after. And so Walmart told the world who they are. And they told the the shopper who they who they are. But that automatic that can eliminate some people right away, which is ok. But pricing is that important.

12:12
So right now we’re actually in the middle of getting ready to to relaunch a kind of a makeover product. So one thing that we’ve learned is, we help a lot of people get tons of media, we’re really, really good at it. So we get a lot of people that come through the front door, and they say, Hey, can you get me on the Today Show? Can you connect me with this influencer? Can you do this? And usually these folks are not. They’re not the type of people that are going to stroll into a Madison Avenue, PR firm. You know, so they’re earlier stage startups. So they don’t have, you know, enterprise level budgets. And that’s fine because our audience you know, I, you know, part of our values system is democratization is that we want people to be able to increase their authority and influence ultimately, they can have a bigger impact on the world. So. So we’ve created a product that that helps them on the front end, kind of get all of their authority indicators taken care of, so that they’re much easier to pitch, you know, you and I had a conversation as we were getting on, and I’m like, Carl, you’ve got a great bio, like, you’ve given me everything, I checked out your website, it has everything I need. So as a podcast host, you make my job really easy. And so it’s very, very easy for me to promote you. And I’m going to guess 95% of the people that that I encounter, they don’t have what you have and what you have is valuable. So So anyway, so we’ve created a product to help them get all of those things done. Now, if our core value is democratization, I think I’m starting now and i and i really take all of that information I just shared with you and somehow I need to come up with a price for that makeover service that that platform. And, you know, I can value stack and, you know, come up with, you know, the fact that it’s over $8,000 in value. But how do I how do I decide what that price I offer to them is? I mean, I know what my hard costs are, and respect that a lot of people probably value their hard costs into that formula, maybe a little bit too much.

14:30
Right. So yeah, if you if you’re pricing one of the one of the things to be careful of a one of our clients made this mistake was they were very much a cost plus pricing company. So they looked at the cost and they said, Well, we mark it up 33%, you know, because that’s the industry standard and blah, blah, blah. Well, they worked really hard on becoming very efficient. So as they got more efficient, their pricing actually came down. In other words, they were punishing themselves for becoming efficient. And they were finding that other their competitors were charging more They said, Wow, how are these other guys doing this and making all this profit? I said, they’re not the inefficient. So they have to charge what they charge to make any money. But you are punishing yourself for you are punishing yourself for being efficient. So I would I would expand the question a little bit Josh, and you said, What price should I charge? I would suggest that the question be what prices? Should I charge? Okay, so here you have this product, and it’s a fantastic makeover product. And I would I would take that product and say, how would it apply to the, to the three main types of buyers that I’m going to encounter? And the first buyer I’m going to encounter is the achiever. Somebody who’s kind of been there already has had certain amount of success, whatever they define as success, but they have set goals achieve them, they will put themselves in the class of somebody who’s made it happen. Okay. Then the second class is the emulator. The emulator says Gosh, I want to be like the achiever. I want to be the boss man someday right now I’m a weekend warrior. I want to be the boss man. I aspire to that. And I want to get to that place. And then you have the more utilitarian shopper, who’s the person who is purely looking at dollars and cents has a budget doesn’t go over it. And, and they’re the cost plus shop. Right? So what I would do is I would look at those three groups and I would say, okay, who is like, of the people that fit into my ideal client avatar? I this is someone who wants to get on TV, all right. So your ideal avatar is somewhere in their name is going to have the word expert or authority or subject matter expert or something like that. Okay. Let me look at the three types of subject matter experts, the achiever expert, somebody who has gotten some press already, but wants to get on the the, the a level press, you know, a level press, I would take that and i would i would make sure I have a premium offering for that Michael Gold Standard. And let’s say your product, you were thinking of charging 100 for it, that product, what the way you would charge for that prices, take your cost, put a nominal nominal profit on there right. Now you have your baseline price, what I would do is I would cross that out double the price, then I would double it again. And then I would say, are the the bonuses features, advantages and benefits of this price, can I justify my double than double again price, and that’s going to be my premium offering. If the bonuses and the features don’t add up to that value proposition, then don’t change the price. Look for ways to add features that would make sense to that person. You know, so, so not so if it’s a home study course, or it’s a DIY course, you might add coaching, you might add a visual makeover you might give them an image consultant to work on their on their appearance, you might you might be able to offer them three sit downs with industry experts, you know that immediate experts. You that’s how you would do that now

18:10
to your core. Now, something to understand about the achiever. The achiever will pay for your services they will pay for your premium services. Now focus on the word pay for a moment. Your second level remember those emulators, they want to be the achiever. They will overpay for your product or service, because the now the achiever can get press without you, but they need you to polish the polish the diamond a little bit, right. However, the emulator can’t get on the stage without you and say they will overpay to get in the game. They won’t overpay to stay in the game for another achiever, but they will overpay to get in the game. Because what you have is so high value and what you have is the one thing they can’t figure out on Their own. So they are willing to overpay. And I would suggest not only should you over not only could you charge for it or overcharge a little, you should, because the reason why they can’t get on that stage is they haven’t made the time or made the energy in their life or made it a high enough priority. But if you make them overpay, they will, it will catch their attention. And you will be doing them the biggest favor of their career because they’re going to say, you know, Josh, you bugged me in the beginning. I didn’t want to pay that extra 20% or whatever, but I did. And you know what, thank you because you made me focus on this. I’ve solved this problem, or at least advanced my progress in this and this issue. And you have really helped me here. Thank you. Okay. youtility person cost plus, right, you’re going to have to have, you’re gonna have an industry level standard price if you even want them, right, but it’s bare bones. This person is willing to do the work on their own. They’re willing to write up their own notes. I’m not going to buy the workbook from you because they have a pen in their own pad. You get it that it’s that kind of person. That’s cool, because we like those people because they’re the hardest people to convince that what you gave them was quality. And when you get a review from a utilitarian is probably more valuable than a review from your emulator or achiever.

20:16
Wonderful. Well, Carl, this is extremely valuable information. And I want to thank you so much for joining us. Now, of course, you’re on the web at Carl gould.com. That’s Carl with a CN Gold is GOULD. com. I’d invite the folks who are listening to us right now, Carl, you’ve produced three books that look really great biz dev done, right? The seven stages of small business success, and then blueprint for success. And your world renowned speaker. You’ve obviously you’ve helped all a lot of companies in your tenure. So I want to thank you so much for joining us.

20:56
Hey, Josh, thanks so much. This has been a blast and thanks for allowing me to come on. here and talk about my favorite subject, which is pricing strategy. So thank you. This has been fun. Love it, Carl.

21:05
Thank you.

21:07
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