Pricing models and the pros and cons of each

There are 5 core pricing models that you can use with your business.

  1. Free
  2. Low cost
  3. Core offer
  4. Recurring
  5. High ticket

The problem is not that agencies and marketers don’t understand different pricing models.

It’s that they overload ONE pricing model with all their offers.

Take a look at this pricing matrix below:

Core offer is around $5000. That’s what MOST marketing agencies are charging for their services.

The problem is that they have LOADS of offers and services at that same price point.

Plus – they’re WAY overdelivering on work inside that pricing bracket.

A good rule of thumb is that a $5000 product should take YOU 2 – 3 days to deliver.

Think workshops, reports, discovery calls, etc.

Working with you, like, getting YOU to do the agency work should be $10K MINIMUM. $25,000 per project, ideally.

Your recurring revenue should be yielding around $6000 in revenue a year for very little work. Think SaaS products, maintenance plans, coaching calls, etc. That’s around $500 a month.

Too many agencies, marketers, and consultants overload the core offer pricing bracket, with Done-For-You work and it breaks their profit margins.

Use that matrix above and just see how many different projects, products, offers, and services you’ve completed inside the core offer price bracket.

And be honest – how many of you are giving strategy calls, discovery calls, and workshops/research away for FREE?

Too many of you.

Of course, you can change this.

Make your business more profitable (almost overnight) using a worksheet like the above.

Most of you are delivering $25,000 worth of work, you’re just not charging for it.

There’s nothing wrong with a core offer at $5000. It just shouldn’t be costing you $25,000 to deliver it.

Mike Killen

Mike is the world's #1 sales coach for marketing funnel builders. He helps funnel builders sell marketing funnels to their customers. He is the author of From Single To Scale; How single-person, small and micro-businesses can scale their business to profit. You can find him on Twitter @mike_killen.