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

 

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
Groups on LinkedIn

Become an expert in the eye of the client  

Getting recognition for your “expertise” in selling professional services is paramount if you’re to make good profits.  

The stages in the process include –

  1. Setting out your credentials
  2. Outbound publicity – demonstrate you know your ‘stuff’
  3. Getting to one on one conversations around the client’s desired future state
  4. Discussing your services, their needs and fees

I was working with a financial services client and recommended he use the Monte-Carlo method to establish the prospective client’s need for advice. (Go to the sub heading on Finance and Business).   I think it’s very suitable way to frame a discussion when talking about personal finances

Monte Carlo simulation is commonly used to evaluate the risk and uncertainty that would affect the outcome of different decision options.  

First be recognised as an expert

You can’t get these conversations going without first establishing yourself as an expert.  Nobody wants their finances managed by an amateur.  Nor their marketing services.  Just working for a big name firm is no guarantee of expertise – it’s a step in the right  direction.  

Groups on LinkedIn

Groups on LinkedIn

Getting in front of future clients is possible via step 1.  As you establish yourself as an expert you will get noticed (particularly if you use key words relevant to your expertise and audience.  Maintaining your position as an expert in the eyes of your audience can be continued through outbound articles and publicity.

These are best delivered using sites aligned to your industry niche and audience.  For my area there’s a great Reddit thread, a couple of Facebook Groups and a Linked In Group which is very active.  You need to find the ones suited to your needs.  Don’t forget to check out in-person events on places like Meetup.com too – not all communication has to be written!

Finding the right things to say in your publicity and how to start a conversation with your reader are the things you will need to practice.  Conversations in a public forum can lead, later, to a private discussion which is preliminary to taking on a new client.

 

Book a personalised coaching session with the Creative Agency Secrets team – pick the person who best suits your need.

Marketing for a web design business

I’d like to chat about marketing for my small web design business.  I’ve got to this point without needing to do much marketing, however, to grow, I need to be doing something!  What’s your advice?

Having looked at many, many web design agency websites, there is one clear point of difference which you creative-web-designshave that others do not have.  You BOTH do web design and you’re a Shopify expert.

But the website doesn’t separate the customer journey (pathway through the site) for these two groups.  It’s important to shortcut the number of clicks a visitor makes on their discovery through your site.

Recommend: Separate links to detail pages for these two services

I asked you about the split in clients between web and Shopify – and you told me it was about 50:50.  Then you told me some of your clients were first timers – getting a website or ecommerce store for the first time.  This group needs to be treated differently from clients who know how to buy web services.  This group can lose you money as they are inexperienced.

Recommend: Set up a page for FirstTimers to guide them through how to brief an agency.

You also told me that some of your work is advice, particularly for Shopify clients.  You charge an hourly rate for this work.  This is a good rate, but it’s non-repeating business.

Recommend: You offer two services for advice.  One is straight advice; the other is training.  Double your charges for training because you are teaching clients how to be self-sufficient and to run their own Shopify stores.

Symbol for creating new business opportunitiesSymbol for new business analysis[Click the icons to see other articles on these topics]

If this advice is useful for your business, consider hiring us to help tutor you through effective business marketing.  Can’t pay?  Join our newsletter and you’ll get a free 8 article series of practical business marketing tips to implement yourself.

Entrepreneurship and business course

What’s the best entrepreneurship / business course?

A question I answered in Quora forum: “What’s the best entrepreneurship or business course – it can be free or paid”.

The best course of action is to go apprentice yourself to an entrepreneur you respect and learn by working with/for them. I suggest doing this before or at the same time as starting your own business. Experience is worth a load more than book-learning from theoreticians.

I do not recommend paying $$$ for a university course UNLESS it is part time and closely aligned with working on a business you are currently running. Then you get to put into practice what you are being taught immediately.

I teach on a business course here in New Zealand called the Business Leadership Programme – by Love to Grow.

It takes 6 months and is 1 day per month with one-to-one coaching sessions in between formal classroom sessions. I recommend you ask them if you can join it virtually – the next course starts October 2016. It made a gigantic change to my business and taught me a lot about the parts of business entrepreneurship that I didn’t know (and the things I didn’t realise I needed to know!).

Shortcomings of book learning entrepreneurs

I find that any book, magazine or podcast that gives advice is helpful – but only up to a point. The authors never, NEVER talk in full detail about their mistakes, their mis-directions, bad decisions and failures. They may reference them, but you will not get the full picture.

The value is in experiencing these situations and learning from them.

If I were to tell you in public about experiences I’ve had like a bullying client, a supplier who stole from us, a bad person we hired etc you would begin to get more of an idea. But it would be unprofessional to write these things in public and I may get sued. But it is the EXPERIENCE of these situations that helps you to grow as a business person and entrepreneur.

My personal solutions to the need for experience and a fully rounded business education is on-the-job learning (reading / podcasts / business books / mentor advice) supplemented by:

  1. Chief Financial Officer meeting monthly
  2. The Business Leadership Programme educating and honing skills
  3. Mastermind Group of business owners – we meet monthly face to face and share / seek advice in a trusted, confidential roundtable. [We have a vacancy for 2 people to join our Auckland group – please ask]

What is your advice on how to learn entrepreneurship?

Accelerate Lab

Get your business headed in the right direction with Accelerate Lab

Accelerate Lab is a downloadable DIY programme to take entrepreneurs through the business planning process. It includes support and a “fresh pair of eyes” to overview your current operations.
The programme is designed to enable business owners to visualise their business model, and check that the systems and structure and documentation are in place and your brand and marketing is focused and aligned, so that you can achieve the profitability results you want. Try the free diagnostic planning questionnaire, available on the website to assess which areas of your business might need attention.

What’s in it for business owners?

  • Clarity;
  • Increased profitability;
  • A sound platform on which to add more volume;
  • Credibility with external funders;
  • Risk management;
  • Use of proven systems and templates for speed and economy.

The programme is broken down into 4 modules, based upon a project management framework for efficiency and each module includes a worksheet document with diagrams and tables. The outputs are visual and crystallised, so that you can easily see and feel the high-level information, priorities, options and steps.

Examples are:

  • A one page step-up cash flow model, that shows each stage in the path to growth, at what stage/income or production level do you need to expand your resources? What does that mean for your business’s profitability.
  • A family tree of your total potential market segments/niches with your niches markets highlighted.
  • A niche/opportunity evaluation ranking table which enables you to assess any opportunity against the existing and each other, to identify the best opportunities and determine what you should focus on or do next.

Entrepreneurs can elect to do the entire programme (to satisfy an investors or funders for risk management purposes) or just select the modules they need. Each module comes with a specified number of support hours included which is detailed on the website: www.acceleratelab.co.nz

Accelerate Lab has been developed from the Start-Up Lab process for pre-trading businesses and uses a similar structure. Launched in early 2016 and currently having businesses trialling the programme, Accelerate Lab is working with them to ensure that it fully meets businesses needs. In return for a testimonial, it’s been offered a 30% discount on the normal prices on the website for selected businesses. If you would like to be part of the trial programme please contact christine@startuplab.co.nz before 30 June 2016.

Will Technology Define Successful Events in 2016?

Event Technology is developing and defining the way we plan and create events in brand new ways. Loseberger is a UK company working with events. They recently published these infographics about how technology is developing and how it’s being used to make events more effective. Take a look and let us know what you think!

Event Technology: Will This Define Success in 2016?

Learn How to Growth Hack your Website in May

Learn How to Growth Hack your Website in May

What it means to Growth Hack.

Growth Hacking is a new phrase meaning to aggressively make a step-change in business success.  It’s not just a cute phrase, there are specific techniques which can make significant improvements to website success.

You define success and we’ll teach you how to make it happen.

What is your #1 marketing and sales problem?

Get the answers about how you can growth hack your web success with USA experts Dan Morris and Rachel Martin during May 2016.

Face to face consult or small group workshops.

Email rebecca@creativeagencysecrets.com with your #1 marketing and sales problem.

Rachel Martin website GrowthHacking expert

Rachel Martin website GrowthHacking expert

 

 

SEO Tools

7 Tools to Improve Your SEO

Improving the SEO for your business is very important. When potential customers search for your products and services you obviously want to appear as high in the search engine rankings as possible. In order to do so, your SEO has to be better than your competitors. Google and other search engines will rank what they think is relevant to what is searched for. Therefore, you have to make sure Google thinks your business is relevant to rank. The higher ranking you get on Google, the more likely you will be to drive more traffic to your website. So, what do you do and where do you start?

BrightLocal’s 7 SEO tools

BrightLocal is a company that specializes in SEO tools that help businesses grow through the effective use of search marketing. Today, BrightLocal have more than 20,000 customers worldwide using their 7 SEO tools.

1. Local Search Rank Checker

The first tool is the Local Search Rank Checker. It tracks your ranking on search engines like Google, Bing and Yahoo and it covers both organic and local search rankings. You have the opportunity to set up this tool to run a report automatically every month or week and you can compare your result to previous reports. Decide what settings will work best for your business. Finally, the report is also available for you to download. Keep track on your ranking and make sure it goes up!

2. Local SEO Check-up

The Local SEO Check-up tool provides a fast and comprehensive audit of a business’ local SEO set-up. It’s a complete local SEO audit tool that runs more than 300 automatic SEO checks. It enables you to speed up your SEO audits and it only takes 5 minutes to set up! You get a clear and accurate report within 15 minutes which you can share directly with clients and prospects. The things this tool checks includes: inbound links, domain authority, your presence on the most important local directories, social media, and Google Places.

3. Google+ Local Wizard

You use Google+ Local Wizard to quickly analyze you Google+ optimization and benchmark your business against your top 10 local competitors. You can also see your ranking on Google+ for your key terms.

4. CitationTracker

CitationTracker is a tool that helps you find, track and manage your local citations. A citation is a listing for your business on a third party site, for example; on a review site like Yelp. By using this tool you will get help with your citations in four different ways. It will help you find existing citations, locate old and incorrect citations, spy on your competitors citations and track the change you make to your current citations. You can also find new citations by locating your top 5 competitors and list your business on the same site!

5. CitationBurst

The CitationBurst tool helps you if you don’t want to go through the labours of manual citation building yourself. CitationBurst will do it for you! It gives you the chance to submit to multiple directories at one time and help to generate listings on local, general and niche directory sites. Pick what sites you want to submit to and CitationBurst will complete the submissions for you within 14 days.

6. ReviewFlow

What ReviewFlow does is that it locates and monitors online reviews on important directories and reviews sites. Using this tool makes it possible to find existing reviews and track all new reviews you receive. ReviewFlow keeps track on all major review sites such as Google+, Yelp and Tripadvisor. By collecting reviews from all sites the report makes it easier for you to read and comment your reviews. You can schedule the report to update monthly, weekly or even daily.

7. ReviewBiz

The final tool is ReviewBiz. It gives you the opportunity of adding a ReviewBiz badge to your website. Create and customize your button and copy paste the code onto your website. By doing that, your clients can easily click-through to a review site of your choice to read and add reviews about your business. Positive reviews will boost your local ranking!

SEO Tools

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