Blair Enns, Author, Pricing creativity

Hacking the Value Conversation

 

Blair Enns, Author of Pricing Creativity Book

Blair Enns, Author of Pricing Creativity Book

By Blair Enns, Pricing Creativity Webinar Host – May 2018, details here.

The value conversation is where value pricing theory goes to die. The difficulty in mastering this conversation is what causes most people to give up on value-based pricing completely and revert back to selling time and materials. It needn’t be so difficult, though.

There’s a hack to the value conversation that a successful former client of mine pointed out after reading the manuscript of Pricing Creativity: A Guide to Profit Beyond the Billable Hour. When he explained it to me over dinner I thought, “This is brilliant. I should put it in the book.” In the end, I didn’t include the hack because I feel strongly that mastering the value conversation is one of the most valuable skills in all of business – a skill that can transform careers and businesses. So, while encouraging you to learn that skill, I’ll now give you the shortcut. But first, some context.

Perhaps the Most Valuable Skill in Business

There are three tiers of financial success in a creative firm that I can correlate to pricing strategies. The lowest tier of true financial success is occupied by the efficient cost-based pricers – those firms that bill as many of the available hours as possible. An efficient firm might bill around $200k in adjusted gross income (AGI) per full-time equivalent employee (FTE), whereas the average cost-based firm might bill around $140k in AGI per FTE.

The next tier of success is where you find the value-based pricers – those who charge based on the value to the client and not based on their costs or inputs of time and materials. These firms escape the limits imposed by the pursuit of efficiencies, moving their AGI/FTE number north of $200k, into $250k and maybe even the $300k range.

The very highest tier of financial success, however, is reserved for those value-based pricers who master the value conversation. These firms can push into the $400k range and beyond, with no real theoretical limit. A well-facilitated value conversation not only has a profound effect on the income of the firm, it creates more value for the client and it is a thing of beauty to behold. I consider it to be one of the most valuable – perhaps the most valuable – skill in all of business.

The Value Conversation Framework

Here’s the simple four-step framework for facilitating the value conversation:

  1. Confirm the client’s desired future state (What do you want?)
  2. Agree on the metrics of success (How will we know we have achieved these things?)
  3. Uncover the value that would be created by hitting these metrics (What’s this worth?)
  4. Offer pricing guidance (I’m going to bring you a range of solutions in the $Y to $X range.)

There’s lots of nuance around the “how” of each of the four steps above, but it’s really that straightforward. You’ll notice that by the end of the value conversation you haven’t even begun to think about solutions. Your entire focus is on the client: what they want, how you’ll measure their success, how much value you might create for them, and finally, some initial ideas on what you might charge for helping to create such value. After this conversation, you retreat to think about costs and solutions, building and pricing your proposal accordingly, while following the rules set out in Pricing Creativity.

The Reality: Few Get There

So, why are there so few firms mastering what seems like a simple conversation and moving to the highest tier of financial success?

The reasons are many:

  • This mastery is a sales skill and not a pricing skill
  • It requires you to be selling from the expert practitioner position and not the vendor position
  • It’s tactical knowledge acquired from doing, not implicit knowledge acquired from reading or listening
  • It requires you to be talking to client-side executives charged with value creation and not middle managers charged with managing a project or budget
  • The first few conversations can be awkward, and few push through the awkwardness to get to the incredible riches on the other side

All of these reasons and more make a value conversation hack so valuable. So here it is…

The Hack

Early in Pricing Creativity, I tell the story of the first time I saw a one-page proposal based on value rather than inputs. It was the principal of that firm that I found myself having dinner with while the book was in pre-production. Commenting on the manuscript he said, “You left out my hack!” What did he mean, I asked? He replied that he never mastered the value conversation. (Chapter 9: Master the Value Conversation – to me, perhaps the most important chapter in the book.)

Instead, early on in the sale – much earlier than I would advocate – he would put a one-page proposal on the table with three options. But he didn’t view this proposal as the final one. In fact, he said that the initial proposal was never the final one. It was only there to serve as a catalyst for discussion over what the client really valued. The hack, according to my client, was to put at the bottom of each option, “Choose this option if X is important to you.” X might be speed to market, customer service, low risk, knowledge transfer or anything else. He would then ask the client, “Which one of these options is the most appealing to you?” The client would point to one, and in doing so, reveal what he most valued. This would direct the conversation. “Ahhh, so educating your team as we develop the product (or programme) is something important to you?”

In this way, the early proposal led to a more targeted value conversation in which the client and the firm could talk through specific value drivers that the client had revealed by simply pointing to an option, all while framed by the context of the initial prices. The discussion would result in the firm coming back with another proposal more specifically targeted to what the client most valued.

To Hack or To Hold Firm?

As someone who values rule-breaking as much as I do rule-making, I love this hack while I simultaneously worry about sharing it with you. There is no substitute for mastering the value conversation. I’ll repeat that I believe it might be the most valuable skill in all of business, but I also know that the size of the gap between those who understand value pricing and those who truly implement it is problematically large, especially in the creative professions.

As I craft this parting advice I find myself wondering what I would do if I were in your shoes (Win Without Pitching is a productised service business – we don’t value price the way a customised service firm like yours should) and I don’t think I would deviate from proper sales process and a good value conversation. But not all value conversations are good and easy, especially in the beginning. And like all good hacks, I would keep this in my back pocket for those situations where I saw that an elegant theory was clashing with my harsh reality.

So use at your discretion. If you do try it, I’d be interested in hearing how you make out.

Pricing Creativity Webinar Registration Details

Pricing Creativity Webinar Registration Details

 

What the F(acebook)?!

WTF? That’s likely a thought running through many people’s minds as they hear that Facebook has just announced one of the biggest changes to the social media platform – ever.

With over 2.13 billion active users each month, there’s no doubt that this news has made a groundbreaking difference in the way that people and businesses use Facebook.

What’s the big news and what can we do about it? Below, we uncover what these changes are, how they will impact the way businesses use Facebook, and give suggestions on how you can adapt your Facebook strategy by creating meaningful content.

We will also share details of a seminar on how to stay up to date with the most popular social media platforms and their ever-changing algorithms.

So what’s changed on Facebook?

Algorithms, that’s what. Complex algorithms are what determines your unique experience on Facebook. Your news feed is catered specifically to you – based on what you like, how you interact and even search history from outside of Facebook.

When it comes to using Facebook for business, many strive to create content that resonates with their audience. Competitions, giveaways, new products – these are all important business updates that are shared on Facebook everyday. Techcrunch reports that there are over 50 million small businesses that use Facebook’s Pages app. For many companies, Facebook is one of their key business assets.

However, Facebook has made some drastic changes that will affect business pages on the platform. On January 11th, 2018, Mark Zuckerberg from Facebook announced algorithm changes that may indicate the start of what Michael Stelzner calls a “Facebook apocalypse”:

  • Personal posts from friends and family will have preferences over posts from groups or pages in your news feed
  • Videos will get less views – this is because video is content consumed passively
  • Focus will be on meaningful social interactions, so comments will be valued more than likes
  • Links to external pages will get less visibility

Source: https://blog.bufferapp.com/facebook-algorithm

As you can see, this is possibly one of the biggest changes that Facebook has ever made to the platform. Zuckerberg himself has even stated that he expects the market price will drop due to these changes. On the one hand, it appears that these changes are purely to improve user experience. But, it can also be debated that these changes are a move to encourage more businesses to turn to paid Facebook advertising to get the traffic they want. And, it’s highly anticipated that Facebook advertising costs will increase following the surge in advertising campaigns.

What does this mean for businesses?

These algorithm changes will start with your news feed, but this is only the beginning. Likely, it will be an update rolled out across all Facebook products.

For businesses, there are a few changes that will invariably happen – something to take into consideration when adapting your marketing strategy to adopt this algorithm change.

For pages that thrive on short, viral videos (think LADbible), they’re likely to be affected the most. Bloggers will also see a hit in organic reach, as will pages that exist purely to share memes, quotes and ‘tag-worthy’ photos.

How to create meaningful content on Facebook

These changes all hold one key goal in mind: to promote meaningful interactions. It’s more than just getting your audience to tag their friends or liking a picture. Meaningful, by Facebook terms, involves interacting with friends, family and other users in insightful conversations.

Here is what will no longer work:

  • Asking people to comment
  • Short text posts
  • Quote graphics
  • Videos

Basically, posts that exist purely to gather likes will be phased out from your news feed.

What can you do to create meaningful content?

  • See first – prompt your audience to change their news feed preferences to see your page’s content first
  • Post less frequently, but with more relevant content
  • Start discussions on your posts that encourage your audience to talk to one another
  • Use Facebook Live to reveal exciting updates and news
  • Adopt a Facebook advertising strategy

This all seems fairly straightforward, but as Facebook continues to make these changes to more than just your news feed, it will be more important than ever to understand these each and every one of these variables that will be affected.

Ultimately, your audience on Facebook isn’t yours – it’s purely borrowed from Facebook. And now that Facebook has set the ball rolling, who is to say other social platforms such as Instagram and Twitter won’t follow suit?

Stay up to date with social media changes

We have a seminar coming up that will cover Facebook, Instagram, Twitter and even Snapchat. There will be an insightful analysis on the algorithms that prioritise content, and what you can do to stay ahead of the crowd when it comes to creating meaningful content.

Click the button below to secure a ticket.

Event info:
WTF Happened to your Social Media Traffic?

Date: Wednesday 18th April, 2018, 7:30am – 9am
Where: Ponsonby Community Centre, Glue Pot room – 20 Ponsonby Terrace
Cost: $30

BOOK NOW
 

Business Accelerators in New Zealand

In doing market validation research for a client, we researched the Business Accelerators who are best known in New Zealand.  Since I couldn’t find a place where they are all listed, I thought I’d create one.  [We did this before for Youth Entrepreneur Organisations in New Zealand].

The Mums Garage group have pulled together a pretty comprehensive “Startup Ecosystem Map” list which goes from pre-seed investment upwards including regional connections – highly recommend as they encourage you to submit additional resources not yet on the list.

Check out these as a starting point for your own individual needs.  And please use the comments to add others to the list.
local directories

Boost Your Business with Local Directories

Don’t let your business get lost in the crowd

Yellow pages directoriesIt’s that time of the year again where we remind you about the benefits of good ol’ directories! Before the internet, we relied on finding services through the big yellow brick of a book we received each year. Thanks to the world wide web, we now find them stuffed under uneven table legs or as a booster seat. Today we find what we’re looking for with a click of a button. Does your business stand out?

In 2016, Google took away the right-hand sidebar where the paid adverts were displayed. Now the paid posts soar straight to the top, making it a tough battle for smaller companies to get noticed. Directories can be a cost-effective way to help get found via search engines. Being active on directories increases the chances of your business getting noticed.

Why updating your information is vital

yelp directoriesIt is important to keep your business updated in directories. If your business has gone through a recent change and you didn’t update your information, you could lose a lot of potential customers!

Never forget to NAP, this means not sleeping on the details. Make sure your Name, Address and Phone data is accurate and up to date. Location and accessibility are two of the most important factors when it comes to customers. If your telephone number is an old one and a customer can’t get through to you, they’re unlikely to try again. Likewise, if you were to put your address as a small town in South America, a New Zealand customer wouldn’t follow up with your business!

Pro tip: Check the directories your company is listed in and confirm your details are correct. Some websites take their information from others; resulting in a cycle of incorrect information.

Updated List of Directories

This year, we bring you an even bigger list of potential directories your business may be found in. Take a look to see where your business is listed and where it isn’t.

It’s the only thing standing in between you and your next big client.

NB: Not all directories will apply to every type of business, some are more specific to particular fields. (eg. Tripadvisor will benefit restaurants and hotels over a telecommunications company.)

 

Localist NZPages Verified Local Yellowpages NZ
Search local areas for shopping, restaurants,
things to do, popular services etc.
Collection of New Zealand websites for any business. Wide directory of businesses from all around New Zealand. One of the most popular directory for businesses in New Zealand.
NZ LOCALIZER NEW ZEALAND SEARCH ENROLL BUSINESS FINDA
A place with many New Zealand companies. Directory of websites, a search engine and New Zealand articles. Browse through local businesses and services of New Zealand. Find anything in New Zealand.
HOTFROG CYLEX EXPRESS BUSINESS DIRECTORY ZIPLEAF
A place for small business owners to tell the world what they do differently. Business directory across 35+ countries. A worldwide directory of businesses where you can update news and information about your products. Find local companies.
WAND YELP ZENBU KOMPASS
Worldwide directory of businesses where you have a wide range of features to promote your business. Easy-to-use global directory of services and businesses. Collaboratively edited directory of businesses and places that help you find anything in New Zealand. A B2B directory site to help you develop your business by generating sales leads.
TLBN 2FL SALES SPIDER BROWNBOOK
Free and paid memberships available to list your business. A worldwide directory of local businesses. An international website where you list products, compare businesses and leave reviews. A smaller global directory.
TRIPADVISOR WHERE2GO MYHUCKLEBERRY CYBO
A review driven site for activities to do on your holidays. A business directory where you can find many unique sites. A directory and an online destination for business information. Business directory to expand your global presence.
YELLO YELLO OPENDI FIND US HERE SPOKE
Helps local businesses and services present themselves. Business directory with big coverage in New Zealand. Global directory of businesses, organizations, clubs, and communities. Information of over 1.4 million businesses.
LACARTES MAPS CONNECT FOURSQUARE TUPALO
Find anything from local activities to exotic destinations worldwide. Add or update your company details on Apple Maps so customers can find you through the app. Find best places to eat, drink, shop or visit during your travels. Browse popular local attractions and see what other users think about it.
PATHLEGAL LAWLINK TOP DESIGN FIRMS RATEBEER
A directory of lawyers around the world. Create a personal profile and connect with and online attorney network. Reviews and rankings of design agencies around the world. Directory of beers, breweries, bars and stores around the world.

Customer Feedback and Reviews template email

I got this question from Quora and here’s the answer I submitted.

How can e-commerce companies encourage customers to submit reviews?

There are ethical methods and less ethical methods of getting client testimonials for ecommerce.

A bribe is not ethical – but people do it. Give us a review and get a coupon / discount / freebie.

Tools for encouraging reviews

There are paid services that encourage customers to submit reviews, or you can set up an automation inside your ecommerce shop (integrating with AgileCRM, MailChimp, TrustPilot or similar).

My preference is this: two weeks after the purchase, set up an automation in your email sending out a message. Sample messages are below.

 

Another thing you can do is buy a reviews service – SellerLabs is a good one for Amazon sellers. Learn more about this on eCommerceFuel | The Private Community for 6 & 7 Figure Stores

The links are very important. The three below are for a client and setting these up correctly is key. Get in touch if you’d like this set up for your shop.

Note that at the time of writing, Facebook’s terms of service expressly forbid asking for comments, reviews or tagging friends in exchange for free product.

Amazon also forbids offering free or discounted product in exchange for reviews.

Bonus:

Customer Feedback Email templates

Thank you for buying XYZ PRODUCT – we hope it’s arrived and everything is in order. Your experience is very important to us and we learn a lot from your feedback. Please tell us how we did by leaving feedback on one of the links below.

Google Review | Facebook Review

Thanks very much

And if you are a services company….

Your experience with XYZ SERVICE is very important to us and we learn how to improve our service from your feedback. Please tell us how we did on your recent job. We would love to hear your feedback.

Can you take a few moments to follow one of the links below and give us a review:

Blowing our Creative Agency Secrets trumpet

I’m inordinately proud of my team.  This is what they’ve achieved for our brand when you search for creative agency Auckland.

website traffic drop

“Why is my website traffic dropping?”

For any business using its website as a lead generation tool, traffic is essential. The more visitors you get, the more chances you have to make your product or service known, gain connections and promote your brand. This is why an unexpected decline in organic traffic is a terrifying idea, as it might result in fewer business opportunities and less income.

Whether it’s a technical problem, a new Google algorithm implementation or lack of content optimisation, there are several possible motives why your company’s website traffic numbers have been sinking lately.

For example, older websites have higher risks of being penalised by Google’s algorithm updates because of potential coding errors and obsolete practices still applied to some of the pages. That ‘keyword stuffed’ article you wrote in 2010 that brought a lot of traffic seemed like a good idea at the time. Now, it is definitely hurting your website on an apocalyptic scale.

Content is (a mad) king

We recently had a meeting with a group of young entrepreneurs who run MI6-HQ.com, a fansite dedicated to Bond, James Bond. (cue the music)

They expressed their concern with the MI6-HQ website traffic dropping like a stone over the past months and wanted our help to:

  1. Assess the possible reasons for the decline in visits;
  2. Come up with a few creative ideas to solve the problem, like a marketing version of Q.

Even though they offer really good articles (many visitors had lots of nice things to say on their Facebook comments), their search engine rankings and organic reach keep decreasing. There are multiple marketers that repeatedly state just writing “epic content” will drive traffic to any website, period. Unfortunately, that’s not the truth.

Don’t get me wrong, I agree that good content is essential. But if you publish it in a flawed website, you’ll have your king residing in a crumbling castle. That inspires no recognition at all and the results are totally unpredictable.

Google has a license to kill your audience

Google holds more than 74% of the search engine market share worldwide. That’s why you either play by their rules or fall into the internet abyss (a.k.a. Not the first page on Google Search).

We believe part of the decline in the MI6-HQ search rankings is that their website has been running for over 20 years (!!!) and most of their ‘ancient’ content might not have been updated regularly. A quick search (on Google, of course) shows that MI6-HQ.com has 15,500 indexed pages. It’s probably really hard to keep tabs on all of them individually.

mi6-hq indexed pages on google

Optimising websites is not a one-size-fits-all process. When it comes to web content that is already published, you have the option to improve or kill pages forever. In this specific case, deleting some of the older articles might be an alternative. Having fewer discoverable pages to increase your website findability can sound very counterintuitive, but I assure you, it works wonders for some people. Learning to let go is necessary sometimes.

Analysing your website performance is a laborious but rewarding task

There’s a lot of work involved in optimising your website. You might even say it’s a never-ending task, depending on your level of perfectionism. Nowadays, the competition online is cutthroat, so any edge you have over your competitors is worth the effort.

According to research by Moz blog, more than 70% of searches result in a page one organic click. The rest is diluted from the second page onwards. This just shows how important it is to aim for the top place of the search engine rankings.

Electronics innovator needs refreshed website

Leading kiwi innovator needs online store and CMS based website.  Our client is a leading Internet of Things (IoT) business and has a new product suite of cloud software and electronic monitoring devices.

A CMS based site with easy editing and strong SEO.

Launch end April 2018

Deadline for costed proposals 5pm, Friday 23rd March 2018

Website specification:

4-6 informational pages

Functionality:

Website needs

  • CMS
  • Recommendations for security
  • Recommendations for plugins
  • On-site Google Search
  • Google Analytics
  • Google Search console

Get in touch for a full specification and to find out more through Conrado Langer.

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trade show, exposition, marketing B2B, trade show marketing

Trade Marketing tips

You asked us about Trade Marketing.  This is when you sell something to another business and they sell it to the ultimate customer.  Fundamentally it’s just selling but because it’s restricted to selling within a single industry or “trade” it gets another name…. the key thing for you to know is that the principles of B2B marketing still hold true.
 

Trade marketing is a sub-type of B2B

What I love about any B2B is that the audience is individually identifiable. You can get or build a list of actual individuals who you can sell to.  The best way to start that is through identifying these things

  1. industry type
  2. sub-type of industry
  3. job title of decision makers and decision-influencers
Then you are within reach of a clearly identified audience.  List broker will sell you lists, you can research and build your own too.  If you choose the latter, please start with the trade association or professional body for the industry.  That’s a great way to short-cut list building.

After the list, how to approach

Getting a list is only the beginning.  You need to brand build with specific campaigns so that prospects recognise your business name or your product name (or both).  Trade shows can be useful here because people who are interested are all gathered into a single location on a single day and you can meet many face to face.
Getting your strategy aligned with the prospect’s need is critical.  Because it’s so easy to mess up an approach and build bad feeling against your brand.  For this reason we always create a hypothesis and we test this out before a general launch.
Today a mailing list of 100 names is being tested for a client.  When we see how it’s received [Good so far, thanks for asking 54% open rate 4% click through] then we can make decisions about whether to adapt / improve or just to roll it out to the rest of the prospect list.

Top 10 tips for trade marketing

  1. Automate follow ups – have a pre-set process for capturing and following up
  2. Time is always short – but don’t cut short conversations on the stand.  Invest in the people who do come to build relationships
  3. Connect on LinkedIn to everyone you meet if possible
  4. Be very clear about what you are promising to prospects
  5. Have a “cute” offer [fidget spinners are popular now]
  6. If you use scrolling video at a trade show, always sub-title it so people get the message from afar
  7. Put on your best smile.  It’s my biggest business success tool – people remember my warm smile
  8. Make eye contact and be the first to break contact after smiling and saying hello.  This is un-threatening
  9. Have a ‘golden question‘ or two ready for your prospect discovery questions
  10. Turn up every year – as long as the show brings in prospects, plan to be there.  Consistency pays off
Creative Agency Secrets is expert in B2B marketing.  We understand how to research trade buyers, how to build a list of possible buyers, how to present your product or service to them and how to get them to buy from you over and over again.
If you want to learn more, read this article about Trade Show Marketing.  And this case study about your business location