In this blog post, we will explore the 10 key areas you need to know to get amazing results with value pricing, boost your profits, and create incredible value for your clients. We'll even look at how AI can make this whole process a breeze!

This is based on a live session from my Value Pricing Academy Level 3: Mastery, the top tier of my program. The feedback from this session has been phenomenal - people are calling it one of the best of 2024! So, I just had to share it with you.

Watch the full video here to get all the details and practical examples: https://youtu.be/yLSEd2OPmlA

The 10 Key Areas of Pricing

Think of these 10 areas as a roadmap to pricing success. Whether you're working with a client on their pricing or applying these strategies to your own business, this framework will set you on the right path.

1 - Strategy and Foundations:

This is where we lay the groundwork. Ask some questions to find out:

• Where the client is now and where they want to be
• Their challenges, frustrations, and pain points
• Their goals and aspirations

Then you would go through some Possibility Analysis – look at some numbers and demonstrate what’s possible.

Then go into a general conversation on common pricing myths – such as the idea that all their customers are price sensitive.

And at this point, you could also explore the three strategic options:

• Low-cost leadership – being cheaper than everybody else.
• Premium pricing – creating more value and differentiating ourselves/
• ‘Me Too’ strategy – pricing based on what competitors are doing

Of these options, premium pricing is by far the best.

Finally, you could look at some quick win strategies with the client.

2 - Price Discrimination:

Don't let the term scare you! This is about charging different prices to different customers based on their willingness to pay.

Think tiered packages, discounts for early payments, and special offers for loyal clients.

3 - Choice and Options (Menu Pricing):

People love choices! Offering tiered packages (bronze, silver, gold) not only gives your clients more flexibility but also taps into some powerful price psychology principles. It's a win-win!

Behavioural economists have shown that this strategy alone can increase prices by between 20% and double. The first time I used this strategy in my own firm in 1999, I increased the price for one of my tech services by close to four times the price!

4 - Value Creation:

There are two ways to price, as you know, Cost-Plus Pricing and Value Pricing. And we know that Value Pricing is always a superior way of pricing for any business.

With Value Pricing, if we want to have higher prices, we must create more value for the client. Then, not only can we charge a premium price, but we also differentiate ourselves from the competition by becoming a premium product provider.

As part of a discussion on value creation, you could teach your clients about Tangible and Intangible benefits. The tangible benefits are the physical things that we can add to a product or service. And the intangible benefits are how we improve the customer experience.

5 - Value Communication:

This is arguably the most important topic on this list. If people don't understand the value you bring, they'll always perceive you as too expensive. The way we communicate is so important.

Here you could look at your client’s pricing material, the words on their website, their brochure and proposal wording. You could review their copy and give feedback.

6 - Payment Terms:

Payment terms are an often overlooked aspect of pricing.

Think about strategies such as offering discounts for upfront payments and creating flexible payment plans that work for both you and your clients.

7 - Pricing Models:

There are countless pricing models out there, from hourly rates to value-based pricing.

You could spend some time with the client exploring which models might be a good fit for their business and how to implement them effectively.

8 - Price Psychology:

The psychology behind pricing is fascinating!

There are so many powerful concepts to dive into here, such as anchoring, the contrast principle, and how to strategically position your prices to influence buying decisions.

9 - Setting the Price and Testing:

A word of warning here… Many clients will want you to tell them what their price should be.

Your job is never to tell people what their price should be, because nobody knows the price until it has been tested. Never give people a price. Instead, you can give them your thoughts in vague terms on what you currently think their pricing is. You might say, for example, “I think your pricing is too cheap”, which it usually is with small businesses.

Remember, nobody knows the perfect price until you test it.

Look at strategies with your client for testing different price points and finding the sweet spot that maximises profits without alienating customers.

10 - Systemising the Process:

Once you've got your pricing strategy sorted, it's time to systemise it.

There are many tools and processes to look at that can streamline your pricing, from proposal templates to online payment systems.

AI to the Rescue!

Now, for the fun part – let's talk about how AI can help us with all of this!

I've created some incredibly powerful prompts that you can use with ChatGPT (or your favourite large language model) to make this entire process a breeze.

However, these prompts are long, too long to paste here in a blog post.

If you want to see these powerful prompts in action, check out the full video I did on this topic where you can grab my bespoke ChatGPT prompts along with explanations, implementation steps, and real-world examples.

Check it out here: https://youtu.be/yLSEd2OPmlA

If you found this valuable and would like to learn more about value pricing, I run a free live online training session every month with a topic chosen by you. Attend live and you can ask me any questions you have. Click here to register and I will send you an invitation to the next session.

Wishing you every success on your pricing journey

Mark Wickersham

Chartered Accountant, Public Speaker and Author of Amazon No.1 Best Seller “Effective Pricing for Accountants”