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

 

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.
TopBuzz home

The hidden risks of TopBuzz

With many services out there for marketers, producing content and getting it to your audience has never been easier. However, not all services are trustworthy. We recently came to learn about TopBuzz, a platform that has divided opinions.

All started with an email…

A couple of weeks ago, we received an email out of the blue from TopBuzz, a content distribution platform, claiming to be ‘impressed’ by a video we did for a client. The email content was quite generic and seemed to be automated. TopBuzz said they were able to enlarge our video audience via their platform and we would be compensated for all the views we got.

A couple days ago, we received another email. This time, it was from a person claiming to be from this company, boasting about the number of active users and the number of views that all the videos get that are shared on their platform. She was very forward in her approach and encouraged us to become a ‘premium creator’.

TopBuzz email

Now, we did a little bit of research on these guys and it was scary to see what would have happened if we signed up with them.

TopBuzz key things we discovered:

  1. According to past users of the platform, the communication from TopBuzz is poor and scarce if you ever try and contact them. If you have a problem with something, TopBuzz are unlikely to help and at best, you might receive template emails that are likely to be irrelevant.
  2. This brings up the next problem. If you are unhappy with the platform…too bad. You can’t delete your account and your content will stay on TopBuzz’s platform forever.
  3. However, it gets worse! TopBuzz can use any videos uploaded to their platform in whatever way they want. Say you work hard and make a viral video. If that video is on their platform, they can publish it as their own and you would get no credit. Unfortunately, most users only realised that this was their fate only after signing the contract without reading the small print in their T&Cs.

We were never interested in using this platform in the first place as the video we created for our client was content produced for a niche segment, it was an hour long and was a face to face interview. Targeting a mass audience and making revenue off views was not on the agenda, therefore, using this platform would have been unnecessary.

If you are producing viral videos, pursuing avenues through social media seems to be a safer option. For example, with Facebook, there are various pages that are dedicated to redistributing content according to different tastes.

Nevertheless, it’s important to be aware of dodgy services like this so be sure to do your research before jumping in!

Sources:

https://medium.com/@attibear/should-you-gin-up-for-topbuzz-ca19d5c1edac

https://digitalfox.media/tech-rhino/topbuzz-5-big-problems-service/

grown ups NZ, logo for grownups

GrownUps NZ, Richard Poole interview

Richard Poole founded the website GrownUps.co.nz and has built it up into a significant media propertygrown ups NZ, logo for grownupsfocused on the over 50s market.   What we found impressive is the ease with which the site has incorporated native advertising with traditional media as revenue streams. 

He kindly agreed to be interviewed by the Creative Agency Secrets team.

  1. What is your latest work?

    I’m continuing to work with GrownUps, although the business is now owned by Cigna Insurance, having sold to them earlier in 2016. It’s been an interesting experience moving from being a small business to working with one of the world’s largest corporates, which I’m learning from. It’s been particular useful to have more governance and rigour around process and also risk. Also, being able to work with an innovative marketer and CEO from Cigna in NZ, has been very rewarding.

    Since selling the business and taking away some of those stresses that do come with business ownership at times, we’re very proud to have doubled the revenue and also site traffic YOY plus grown membership 30%. It’s genuinely a real honour that each month we get to interact with over 160,000 visitors to the site and each week, speak with around half of our 120,000 members, via their weekly email newsletter. What’s really satisfying is that we have not wavered from our original vision from 2006 when we went live with GrownUps, whereby we seek to make every day better for any visitor to the site, whether by reading an interesting article out of the 8,000 that we now have, meeting an interesting fellow GrownUps members, playing a game on the site or maybe even being inspired to book that overseas trip that they deserve and have read about on the site.

  2. What’s impressed you?

    Having never worked in a corporate, it’s been great to see that very large corporates can work well with small businesses that they take under their wing – I think you each learn really. We’ve been fortunate having pragmatic leadership, clear guidelines and an understanding that we’re best to keep the essence of the small business feeling for customers/visitors. It actually can work very well.

  3. What’s the next big thing?

    There is no doubt that my mind seldom stops for a break in terms of thinking about meeting people’s needs, which is sometimes a challenge to be honest. At present I’m committed to GrownUps so we’ll just see where that goes over the next while. I’d love to see our ‘baby’ achieve everything that we’d imagined and hope to play some part in that, if that’s wanted.

    However, I’m 44 and there are several things that I’m keen to achieve personally and for our family by the time I’m 50. Priorities in life definitely change and so I guess we’re always all weighing up how best to live our lives and what makes us happy.

 

3 Ways to Change Your Business Thinking & Actions for 2018 Success

 

Use the code “2018success” to grab a seat with a 50% off end-of-year special!

This November, we’ve got another breakfast seminar happening! We will be covering 3 ways to change your business thinking and actions for 2018 success. 

Has your business reached a standstill even with new business strategies and tactics implemented?  

Perhaps it is time to renew your thinking with us! Getting your thinking right is the key to developing the right business strategy and tactics. Digital marketing is one of the most effective tools to utilise when unlocking business growth and boosting brand awareness. To help you better understand how incorporating digital marketing and the right business strategy can unlock secrets that underpin success, we have this insightful breakfast seminar lined up for you.

About our speakers

An experienced B2B expert, specializing in direct response marketing and new business development.

A well-recognised leadership coach, workshop facilitator, keynote speaker and author, focused on entrepreneurship.

Practical tips you’ll learn

  • How to break old patterns of thinking to make fresh and effective plans
  • Which crucial steps to take to boost your digital strategy
  • SEO techniques to attract traffic to your website
  • How to implement ‘the basics’ really, really well for brand awareness

If you’re serious about starting the new year with the tools needed for success, you wouldn’t want to miss 3 Ways to Change Your Business Thinking & Actions 2017.
A light complimentary breakfast is included!

23rd November, 2017

7:30am – 9am

The Common

1 Faraday Street, Lvl 2, Suite 7
Parnell
Auckland

The Common

Use the code “2018success”at the checkout to get a 50% discount!

RESERVE YOUR SPOT
team work, teamwork, teamwork.com, bad example payment update, payment expiry date,

SaaS renewals that are easy for customers

A robust, scalable business is always based on strong processes.  And if you are in the business of offering a Software as a Service (SaaS) product, you will doubtless have a recurring revenue model.

Our business debit card expires tomorrow and so I’ve been in the throes of receiving alerts, notifications and emails from a range of providers asking me to update my card details so they do not lose their revenues.  The experiences were very varied from the best, smoothest, least painful to the worst where I had to raise a support ticket.

Given SaaS firms risk losing revenue from non-renewals, this is a critical business process.

Here’s what we found

  1.  The earliest “nag” emails came from Hootsuite, Unbounce, Xero and MailChimp.  They were sending them 30 days prior to expiry.
  2. The laggards include Upwork, Skype, FeedBlitz, Teamwork and LinkedIn (from 10 to 5 days in advance),
  3. The “best” process just allows me to update the expiry date on the card (PayPal) without having to re-enter all the other information
  4. The “worst” don’t send me a link into the EXACT page on my account where I can update my details after logging in.  Skype was particularly irritating with a hideous UX on their mobile browser. They leave me failing to find the right billing page detail and resorting to search / help / customer tickets.
  5. The Very Very Worst was Teamwork where they successfully hide the link in an upgrade screen which is not where I’d look to find my payment information (see below)
team work, teamwork, teamwork.com, bad example payment update, payment expiry date,

Hard to find link for payment information on Teamwork.com

Mystery shopping

Any customer process needs testing and constant monitoring to keep it relevant and improved.  Clues which may indicate you have this problem can be found:

  • Check the exit pages on your website
  • Check the long dwell time pages (that you don’t expect)
  • Check the customer service enquiries
  • Check the Searches on your website

When did you last mystery shop your business?

Kiwibank, this is how I’d re-write your email

Kiwibank email text confuses

Kiwibank email text confuses

And I made a fool of myself on LinkedIn by explaining how I totally mis-understood Mark Wilkshire’s message.

Re-write to clarify the message

Here is how I would re-write the email in order to prevent others doing what I did.  [Aside: surely I’m not the most stupid customer Kiwibank has…please, humour me!]

Dear Rebecca

You have a Notice Saver bank account with Kiwibank.  The interest payments for this account come from our PIE Unit Trust.  The money you save in your account is invested in the fund and profits are paid back to you in the form of interest.

As an investor in this fund, we are obliged to share its recent financial performance with you. You can view an electronic copy of the financial statements for the year ended 30th June 2017 on our website via this link.  

[insert rest of the statutory text here].

Lots of love, Mark Wilkshire, Kiwibank

Why is this clearer?

I think this text improves the context for receiving the message.  It explains an investment I didn’t know I had and how the investment performance is relevant to my personal situation (bank interest).

Personally, I wouldn’t try to push out messages about other investments in this message.  Make it simply about this one thing, and how to contact us.

The full truth about what I did on Kiwibank

And, I would anticipate possible confusion among customers by enabling self-help tools on the website to be advance programmed to have answers to questions relating to this investment.

My “Kiwibot” experience below reveals more about the lack of customer orientation and more about the regulatory communication box-ticking which probably sits behind this email misunderstanding.

Kiwibank Bot does not answer questions

Kiwibank Bot does not answer questions

 

 

Why the HELL NOT?

Facebook Groups logo

YIKES! My Facebook Group Got Hijacked by Competitors

When you start a group online in a public social platform, it’s easy. Nothing much happens until your group hits a ‘tipping point” of size + engagement + activity.

Facebook Groups logo

Facebook Groups logo

Different groups achieve this at different points in time. We have a sports group run for a client that has nearly 2,200 members and gets 2–3 posts daily from group members. It is now attracting ‘commercial’ elements such as an advert for privately owned equipment listed for sale.

Interestingly, that one post opened a floodgate of listings from others. It seems as though people felt that ‘permission’ had been given to dive in and sell to the group.

The client runs the group in public at his expense and he refrains from selling into the group more than once a month for his own products. It was clearly time for an intervention and setting boundaries about what is acceptable behaviour in this group environment.

3 Types of ‘Sales Pitch’

1) The first was the lady who listed the equipment for sale. I messaged her privately and she told me that despite getting a huge reaction from the group, it was a private sale and she sold it to a friend, offline. We let this pass as just a one-off. Clearly every member of the group won’t be listing items weekly.

2) The second was a lady who runs an Instagram account through which she gives ‘free training programmes’. We checked out what she does and came to the decision that she’s not making a living out of this. And so I am classifying her as a ‘volunteer’. But her actions need to be curtailed because regular postings promoting her services (even though they are free) would upset the balance of the discussion dynamic already established.

Actions to mitigate impact

We messaged the Instagram lady privately, explaining she can publish her stuff on the website via an existing ‘submit post’ feature where community notices are published. This is important because although it publishes to the blog, it is set up to avoid getting into the newsletter, the Facebook page and other communications channels. She does get indexed by the SEO spiders, gets link backs, but does not get referenced or categorised in the archive.

3) By contrast, the third type of pitch was a post by a commercial sports professional trainer. When we reviewed it, we found it is definitely a paid promotion designed to recruit readers from the client’s Facebook group into HER email list and commercial program.

Actions to Arrest Unwanted Activity

First I turned off comments on this post. Nobody can add to them, and this helps prevent Facebook showing it in feed updates. We also removed all her replies in the comments because they linked to her programme over and over again.

Then we wrote to her privately asking her to get in touch by email so she can pay to promote her products on our platforms, along with other commercial retailers (the website is advertising supported). I am waiting to see what her reply to this Facebook message will be – if she’s contrite and apologetic, I’ll leave her post published; if she takes no action to reply or is aggressive and rude, I’ll delete it and block her from the group.

Behavioural boundaries are yours to define

The underlying logic is that commercial enterprises pay, and volunteers can get access as part of the goodwill of the group. The commercial publicist had made no effort to engage and join in the group discussion – she just joined, dove in and started selling. That’s not how this group rolls.

Making the rules for the group is part of good practice in community management. You can publicise these with a pinned post, or a message to new members explaining what is and is not acceptable.

Enforcing the boundaries will help you to create the group and community YOU want. Know what actions you will take if the boundaries are crossed and also understand how to take discussions into a private space – you don’t want to have a public argument while you try to explain your motives. And you don’t even need to explain them, only the acceptable behaviours.

This article first appeared on NZ Entrepreneur Magazine