Lot’s of people think that I believe everything should be $20 000. Marketing funnels, websites, consultation, eBooks, courses, napkins.
That’s not entirely true, I believe you should charge $20 000 for $20 000’s work.
Everything your marketing funnel business does should be profitable. Bar none.
A $19 eBook should be as profitable as a $20 000 content funnel. I’m going to show you how to make sure every single project is profitable.
Rejection and profitability
Pricing is hard for marketing funnel builders and businesses, because we’re caught between rejection and profitability.
Let’s say we’ve had a new enquiry and we’ve run a discovery session with a customer. We can see that they need funnel automation, sales pages, sales copy and some email follow up.
We can see how much it’ll cost us to deliver the work, but we’re worried that if we price it too high, we’ll be rejected.
Rejection hurts us for a few reasons. 1, it’s in our evolution to fear rejection. If we’re rejected, then the tribe rejects us and we die alone in the cold. 2, if we’re rejected we won’t make ANY money and we’ll struggle for cash flow.
I totally understand that we need to pay the bills, but like I said in my new book, From Single To Scale, it sometimes seems like we’re making money just to keep working another day.
Let’s really be honest. We needn’t fear rejection because we’re not in tribes anymore. It doesn’t matter if we’re rejected. I understand that we don’t want to lose out on income. But if a customer is to say “that’s too expensive”, we can work with that. That isn’t rejection, that’s an objection and I can turn that.
Customer are never going to say no
Customer are never going to say no to you. It doesn’t happen. The worst thing that will happen is your customers will just stop talking to you. Apathy is 100x worse than a no. I can communicate with a no but I can’t communicate if they go radio silence.
The fear that you have, of your customers rejecting your proposal and price is blown out of proportion. You deserve to price something profitably and generate profit for your business.
Here’s another killer secret. The profit margin on your products does NOT affect your sales and close rate. I want you to really think about that.
How much profit you tie into a product or solution, does NOT affect the number of people who buy. If you have a 30% profit margin on a consultation service, or a 1000% profit margin on an eBook, that does not affect how many people will buy.
Coca-cola at a restaurant is around 1200% markup. Bottled water is 2000%. Your ISP charges around a 4900% markup. 18.104.22.168 percent. And you’re worried about adding a 50% profit margin?
Who do you owe profit to?
- Your family
- The economy
- Local businesses
- Government services
- Bank loans
That’s just a really quick list of who benefits from you being profitable. You owe it to yourself, family, staff and more to be profitable.
I’m not mad about the idea of the government and my bank sucking my profits up with interest and tax. However, the idea that I can help hospitals, schools and other people with my tax is worth thinking about.
You need to start charging profitably right now. Today. The benefits of charging profitably are far higher than the potential rejection. You owe it to the world and yourself and your own business to charge profitably.
Price increase doesn’t mean you’re adding profit
The biggest mistake I see marketing funnel builders make, is thinking that just increasing their prices, adds profit.
Just because your project fees are increasing does NOT mean you’re adding a decent profit margin.
Let’s say you’ve only ever built $5000 marketing funnels. A few pages, email automation, sales copy. The next project needs more pages, redirection, up-sells, payment funnels, content, sales copy, video and email. It’s a bigger project right?
Your fees might go up to $20 000. But does that mean you’re profitable? I don’t know. You have to work that out. Don’t fall into the trap of assuming that an increase in prices means you’re making more profit.
On top of all that, you need to create projects that DON’T require you to deliver the work. Profitable work is good, but if you’re the one delivering the work, then it’s not nearly as profitable because it isn’t scalable.
Pricing profitably for your projects, means you have to make sure that you aren’t delivering everything. Can you find sales copy writers, or content creators, or page builder to do the work? Make sure those prices are built into the profit.
Here’s how to get over your fear of rejection and start pricing profitably.
Fear not making money, over rejection
You fear that the customer will reject your price. I understand that. But you have to fear not making money, much more.
A lack of income and cash flow is 100x more crippling to your business than rejection.
You can deal with rejection. You can get better at dealing with objections and hearing the word “no”.
You can’t get better at dealing with no money. No money isn’t something you’re get better at dealing with.
“I can’t afford the rent or bills this month. But it’s OK. I’m used to it.”
What??! You’d sound like a mental person.
Be confident in yourself that you CAN get better at dealing with rejection. If you price something and you KNOW that you can deliver it, you know it’s profitable and you know you can afford to deliver it, that’s perfect. At absolute worst (which will never happen) and someone laughs you out of the pitch, you know that’s their ignorance, not yours.
Costs x 3
The simplest method for determining profitable pricing, times your costs by 3.
Let’s say you’re getting someone 4 blog posts a month. You have a writer who can do them for $100 each. So that’s $400 a month for 4 posts.
You need to charge the customer $400 x 3. Simple as that. $1200 for you to manage and deliver that content to the client.
If you think that sounds like a lot. Get over your fear of rejection. It’s much better to price something profitably, rather than price it to get the deal. Otherwise, you’re never making any money.
This is another reason why you need to stick to a process. If you’ve bought a plugin or piece of software as a one off, or it’s a yearly cost, you need to split that cost over your projects.
A $200 plugin needs to be added into your 10 projects. It’s small, but needs to be done. It also needs to adhere to the 3x rule.
$200 plugin over 10 projects is $20 per project. So each customer needs to be charged $60.
Do you know how much you need?
One of the massive reasons we struggle to price correctly, accurately and profitably is because we ourselves don’t know how much we need to earn.
No one likes spreadsheets (actually, secretly I do), but spending a little time every week and working out your costs is imperative to pricing profitably.
Imagine thinking your monthly costs are $1500. You charge customers for projects with a $500 profit margin. So 3 projects a month would pay for your basic costs.
By spending a little time working out your costs, you could see they’re much higher (and they always are). Imagine finding out your monthly costs are $3000 or $4500. Your projects wouldn’t even come close to covering that,
You have to know what you need to live and thrive before pricing profitably.
$100 000 formula
If you want a $100 000 business, what do you think the formula for that is?
It’s more simple than you think.
A $100 000 business is a numbers game.
That’s either 10 x $10 000 projects a year. Or 100 $1000 projects a year.
Can you deliver $1000 every 3 days? Can you find 100 customers paying $1000 a year? It’s not really that much is it?
It’s also a great way to start measuring your profit. If you’ve got a product that costs $100 a month, that’s $1200 a year. 100 customers on that gives you $120 000 a year for your business.
Assuming there is a 30% profit margin (it could be much higher and probably should be), that’s $36000 profit a year. Not bad.
Work out the simple formula’s for pricing and take control of the profit within that. Know that for a $1000 product, you’re going to be spending around $330 on supplies and costs to you. It makes you think what you can do with $300 rather than $1000 right?
Remove yourself from as much as possible
Profitability is only as useful as the way it’s used.
I’ll level with you. If someone paid ME personally, $100 000 to consult for a week at a large company. I’d take it. I’d be delivering it, which isn’t ideal. But it would be profitable.
I mean, yeah, it’s a discount on my usual rate of $150 000 a week. But I’d make do.
But how much of that process am I involved in? For any other work, how much am I involved in? I don’t want to be involved in too much, because that doesn’t allow me to grow the business.
Our biggest roadblock, when thinking about hiring staff or outsourcing, is being able to afford it.
“I have to do the work because I can’t afford to hire”.
This thinking is killing your business. You have to increase your prices to be able to deliver the work. It’s as simple as that.
If you’re worried about customers thinking it’s too expensive, then you’ve got the wrong customers. The product and price isn’t the problem. The customer is.
If they have no idea what it takes to deliver a project and they have no idea what the cost is, that’s not the project’s fault.
Imagine going to a lawyer and asking them for $100 000 worth of work. But when a $100 000 bill arrives, thinking “that’s too expensive”. That’s not the product or prices fault. That’s your fault.
On the other hand “what’s your budget” is the most powerful but underused question in our arsenal. If you don’t know how many resources your customers have, then you have to share the blame.
Their expectations are always going to be off. They want $1000 worth of work for $100. But if we know their budget is $100, then that’s our fault.
Try asking “how much are you planning on spending, to solve this problem?” and staying silent. If they don’t know, press them and get a more accurate answer. You can’t give them an accurate price if you don’t know their budget.
What can we remove from the project?
If someone DOES say “that’s too expensive”, that isn’t a no. All that means is that they don’t understand what they’re getting.
$80 000 is not too expensive for a Nissan GTR. I can’t afford it (the $100 000 for a weeks consulting cheque hasn’t come through). But that isn’t the car’s fault. I can’t justify the price. I can’t see how spending $80 000 on a car is worth the $80 000.
£207 000 for our house is a lot of money. But we found the money. I knew that taking a loan for the house would be worth it. We can find the money when we need to.
If someone can’t afford what you’re offering them, offer to remove features from the project to bring the price down.
“I can’t afford that, that’s too expensive”
“OK, well what can we remove in order to make it more affordable?”
I hardly have anyone remove features. As soon as they’ve seen what they could have, they can find the money.
Another note of budget and expense. If they can’t afford it and the price they’re negotiating is around 20% of the price – they can find that.
The difference between $10k and $8k is negligible. Don’t fall for it. Stay silent and keep offering to remove features.
Won’t my current customers leave me?
So if you decide to increase your prices, won’t your customers leave you?
No. They don’t.
Most of the time, customers that can’t afford you are already not making you any money. You can’t make less money from them if they leave can you?
I remember receiving an email from a customer, after I announced my prices were increasing. They we’re very respectful and pleasant, but they told me they couldn’t afford the new price.
I looked at what they were paying and it was the cost of the supplier to me. I was literally paying at cost for that service. I became more profitable the second they left me.
I’d rather find 10 customers who are profitable than 100 who break even.
What’s your thoughts on pricing? Have you checked out our pricing guide below? Let me know if you’re going to reject rejection and embrace profit in the comments below.