She Means Business: Aligning pricing for impact

Welcome to Live With The Pricing Lady.

I'm Janene, your hostess.

This show is all about helping you build a sustainably profitable

business while making an unbelievable impact on your world.

Learn from my 20 years of experience and from my guests as we discuss their pricing

challenges, failures, and successes.

Pricing is a way of being or behaving in your business.

My mission is to help you confidently charge for the value you deliver.

Pricing is either hurting or helping your business.

Let's make sure it's helping you reach your dreams.

When your strategy isn't aligned with your goals, your pricing can actually

make it harder for you to reach them.

So in this episode of the show, we're taking a look at how to

align your pricing strategy.

Sit back, relax, and enjoy the episode.

I'd like to start with a story.

When I was in the corporate world, I was working for, with a company

and they had a sales team and they also had a pricing problem and they

couldn't quite get to the root of it.

They had a strategy but year after year they weren't meeting their

business objectives in spite of the pricing strategy that they had.

Now part of that pricing strategy actually was related to how they incentivized

the sales team and it turned out that that was where the problem was.

The sales team was incentivized based on how much they sold in volume.

And that meant that even though the strategy of the company was to go after

profit, that any sale the salesperson made, regardless of the quality or

the profitability of that sale, it got the salesperson closer to their goal.

So that meant that their pricing strategy was actually at war in a sense with how

they were incentivizing the sales team.

And that's why in the end, they weren't able to achieve those objectives because

the sales guys were making decisions more towards how they were going to

be incentivized with their bonus.

And that incentive was not aligned with the business's

goal of improving profitability.

And this is a perfect example.

Even though your business may not have a sales team and you're not out there

incentivizing them, it's a perfect example of this misalignment between the

business goals and the pricing strategy.

Your pricing strategy is there to help support you in achieving those goals.

That's why it's so important, in the process of setting your prices, that

you sit down and you think about, what are my goals and how is my

strategy going to help me get there?

There are different aspects of alignment.

We're not just going to talk about the business goals today.

We're going to look at some other areas where alignment is important and

it's important for different reasons.

Like the example we just showed, it's important so that your strategy

actually helps you reach those goals.

It's also important in terms of congruity, that you are aligned with what's going on

and you feel comfortable and like you're doing the right things in your business.

That kind of alignment is also important and often people feel a sense of

misalignment in that context when it comes to topics like pricing and

profit or money in their business.

Now, ultimately your pricing strategy is there to help you

meet those business objectives.

But what goals and what types of things should you be aligning to

when it comes to your strategy?

Now, the first thing I said is business goals.

So let's think about this in the context of some of the businesses

that we are talking about here and that we're here representing today.

So if one business goal could be to get your first five clients, and you might

choose to do something different with your pricing strategy, then if your

business goal was to earn a hundred thousand in a year, now those don't

have to be mutually exclusive goals, but one business might have the first

and another business have the second.

And they might be offering the same thing in a similar way to a similar

target audience, but they may end up pricing differently as a result

of having different business goals.

Or maybe the business goal is to earn or gain 5 percent market share.

Again, you may have a very different strategy in your pricing in order to

help you gain that market share than someone who's going after getting

just their first five clients.

Now the second area that it's really important to consider

in your small business or startup is your personal goals.

So what personally are you trying to achieve?

Are you trying to fully support yourself financially?

Are you trying to make enough to hire a cleaning lady?

That's always been one of my favorite goals.

You know, these different types of personal goals that you have may

also influence what you do with your pricing strategy and how.

Now, generally they will be somehow linked to your business goals, but

they don't necessarily have to be.

You may have other personal development goals related to your business that

may also impact your pricing strategy.

Another area where you want to align is in what I call impact goals.

Now, in today's space, there are a lot of people who have what we call

purpose driven businesses, where they're trying to achieve some higher

purpose behind what they're doing.

Oftentimes they're aligned with these sustainability development

goals but they don't have to be.

And these types of impact goals, as what I call them, can also

impact your pricing strategy.

So for example, if you want to be able to donate 10% of all the profits you

generated in your business to charity, You may or may not choose to do something

different with your strategy, or if you want to be able to afford to take on

six pro bono cases a year, then you may need to do something slightly different

with your strategy than if you're not.

Again, it doesn't mean that you have to do something different or

that you will, but it should be part of the consideration when you're

thinking about setting those prices.

And then there's one last area that It's not necessarily goals, but another area

that's really important when it comes to alignment in your pricing strategy.

And that's with your values, both business and personal.

So for example, if in your business, where you list your mission, your

vision, and your values, if your value is transparency in your business,

Then you may do something different in your pricing strategy than someone

who doesn't have that as a core value as part of their business.

It can also be, you know, personal values can also influence in a similar

way, although often they influence less.

It really depends on what the value is and what it means to your business.

So that's why I share with you these four areas where you want to look, am

I aligned with my pricing strategy?

Is there that congruency there?

I was trying to make up a new word in case you didn't notice that.

You know, is that congruent for you and does it make sense and is it aligned

with what you're trying to achieve overall with your pricing strategy and

in achieving your business objectives?

I think one of the things that's really important.

So the first thing that's really important to remember is that if you've sort of

through your research, you've defined, okay, I think I can charge between, you

know, 2000 and 5, 000, and you're not quite sure where in that range to be.

If you go back to your business goals, which are usually going to lead what

you define as your pricing strategy, if you're looking to gain market share

fast, You may need to price closer to the bottom of that range in order to attract

clients with lower prices, depending on who the clients are and if they will buy

something that is less expensive, right?

If they'll believe the value is still there.

But if you're selling a luxury good, And if your strategy is more focused

on profit and, and say luxury, we'll stick with the luxury goods

example, then you will probably be at the higher end of that range.

And that's why I said at the very beginning, it's possible for you

to be able to calibrate where your prices are going to be within a

range by understanding what your strategy is and your business goals.

How can you go about doing this?

The first thing is just to sit down with those four areas, business goals, personal

goals, impact goals, and values, and write down, a couple of things in each of those

areas that are actually important for you and your business, because then when

you go back and you look at your pricing strategy, you can try and make sure, well,

not try, you can ensure, Or take the right steps to be able to align to those things.

Now does that mean that you'll always be able to make an alignment?

Not necessarily.

You may decide that you want to sell it really cheap and inexpensively, but you

may later come to the conclusion that you can't make a profitable business and

achieve your personal goals with that.

So there's always a bit of give and take and compromise in there.

What's really important is not to compromise your values, because then

that will feel well, it'll feel icky.

That was the word that came to my mind.

It won't feel very good or positive for you, and that'll be reflected in how

customers perceive what your offering.

How they, react to the conversations they have with you, so on and so forth.

It's likely that you'll feel that misalignment on a subconscious level,

and that will be transferred into other things that you're doing in your business.

Here's what I suggest to you do sit down with a piece of paper, or if you

prefer, if you're an audio person with a recorder, And reflect on these four

areas, your business goals, your personal goals, your impact goals, and your values.

And think about what's most important in those areas when it comes to

your business and your journey.

Then you're going to take a step back and you're going to look at

your pricing and see how your pricing strategy aligns with that, reflects

those things and how it's actually helping you to achieve those goals.

Or how it's helping you be aligned with those values.

And that is going to help you when it comes to setting your prices, to make

sure that you're not working against yourself with your pricing strategy.

But your pricing strategy is actually supporting you in

achieving what you want to do.

That was what I wanted to share with you in this episode of

Live with The Pricing Lady.

Let me also share with you.

That the next cohort of the customer compass is going to be coming up soon.

So, if you want to understand your customers better and learn how to do those

efforts, so important customer insight interviews than your one on one to check

out thepricinglady.com/thecustomercompass.

And get all the details so you can join me.

I wish you a great day.

And as always.

Enjoy pricing.

Thank you for listening to this episode of Live with The Pricing Lady, the podcast.

If you enjoyed the episode, rate, review, and subscribe to it, then share

it with your friends and colleagues.

I love hearing back from you listeners.

If you've got comments, questions, or topic ideas, go on over to thepricinglady.

com and contact me there.

Not sure where to start when it comes to improving pricing and profits?

At ThePricingLady.

com you can download a copy of my Self Assessment Pricing Scorecard.

Find out where it's going well and where you can begin improving.

Or just simply book a discovery call with me.

There we can discuss what's up with pricing in your business and

how I might be able to help you.

Thanks once again for joining.

Remember, pricing can hurt or help your business.

Let's make sure it's helping you reach your dreams.

See you next time and as always, enjoy pricing.