Notes from a conversation between Peter Sandeen, “The Marketer’s
Marketer,” and Sharon Burch, CEO of New Directions for Nurses
YouTube link: https://youtu.be/mIP4e0bqTW4
Two Essential Principles of Good Pricing
The first principle is that good pricing is based primarily on the value of the transformation being offered to the customer, the value of other services that provide the same or similar transformation, and the amount of time you contribute.
Also, price testing is a critical step toward understanding your market and optimizing your revenue. It is essential to test your pricing ideas and generate evidence of what works for you and your customers.
Why Nurses Have Trouble Selecting Their Prices
Most nurses have trouble asking people to pay a fair price for their time, energy, and expertise for two reasons:
They’re used to being paid an hourly wage for their services, and
They don’t want anyone to be left out
If you relate to the first reason, you need to recognize the total cost of doing business and the time it takes to complete all the tasks involved, including marketing, administration, and delivering your program or service. Then, set your prices so you can make a sustainable living.
If the second reason is holding you back, here are five ways to offerFREE resources that are easy for your audience to consume, easy for you to deliver, and don’t require much of your time.
Make a downloadable PDF about the first step of the process the person needs.
Write blogs about the first step and distribute them through your website and social media.
Be a guest on other people’s podcasts and give the listeners tips on solving their problems.
Make a few short videos that deliver tips on what people can do to solve their problems.
You can also share your PDF or blog as a resource through a podcast or video.
How to Choose a Fair & Sustainable Price
Once you’ve settled the issues of charging according to the value of your service and making it easy for people to get something that will help them for free, then
Ask for the lowest price that feels fair to you based on the value and cost of other personal services offered in your community. Choose a price high enough that you will not feel resentment when you perform the work.
After you’ve sold a few programs, packages, or services at that price, and you see people are happy with the value they’re receiving, raise the price by 10-20%.
Repeat step #2 every 90 days or so, improving your program or service and raising your price as you grow in skill and confidence.
When to Offer a Discounted Tier
If you see a group of people who want to pay for your service but can’t afford your regular price, you can offer a discounted tier.
We recommend doing this after you have enough individuals purchasing your services at a price that covers your basic needs. (Put on your oxygen mask first before helping others.)
When offering a discounted tier, deliver everything essential for customers to achieve good results but provide less customization or personal support than your regular-priced package.
Why & How to Offer 3 Pricing Tiers
You can also offer a third pricing tier that offers even more personalized support and time with you. This does not mean you’re scrimping on the good results you help people in the two lower tiers achieve. Instead, it means providing support that prioritizes the client’s time and convenience. For example, you
Provide unlimited contact with you
Order the supplies the client needs
Take your service to the client’s home or office, or
Add luxury items if they are meaningful for the customer
In the simplest terms, the three tiers can be considered Do-It-Yourself, Done-With-You, and Done-For-You. Here’s an example of three pricing tiers an entrepreneurial nurse nutritionist used.
Tier 1 was a self-study program for improving one’s diet that included videos and handouts, such as recipes and grocery shopping templates for people with high blood pressure, high blood sugar, and GERD. Two group Q&A sessions were also included. The customers followed the instructions and put together their own nutrition-improvement plan. This offer might be priced at $397.
Tier 2 provided the above plus private coaching sessions to customize the nutrition plan in collaboration with the client, answer their questions, and help them navigate challenging areas. This offer might be priced at $2997.
Tier 3 provided the above, plus the nurse went to the client’s home, removed the contraindicated foods from their kitchen, and went grocery shopping with them to restock their kitchen. In one case, the nurse included the services of a chef to prepare the meals for the client. This offer might be priced at $7997.
As a variation on this theme, you can offer two or three options within the middle tier IF you know your audience well enough to offer distinctively meaningful variations on the middle tier theme. We recommend increasing the prices between each step by about 150 to 200 percent. If the steps increase more than that, one or two options will likely be less relevant to the customer.
If we use the example above to illustrate this principle, the nurse will first offer a middle-priced option at $2997, then add a lower-priced option with fewer private coaching sessions for $1997, and a third option with more support and less client effort for $4997.
Another approach is to offer the same support for three different lengths, such as one month, three months, or six months.
When having a one-to-one sales conversation with the prospective client, offering your highest tier first is generally best. If the person says that’s way out of their budget, you can offer the second tier and the third if necessary. This way, the person knows what’s available and can make an informed choice.
Sliding Scales & Pay-What-You-Can Pricing
Over my years in business, I’ve experimented with sliding scales and pay-what-you-can pricing. In this article, my friend and colleague, George Kao, echoes my thoughts about these options.
Still Have Questions about Applying This in Your Business?
Bring your pricing questions and challenges to the LNBI group coaching sessions or the Marketing Lab sessions. Sharon and the LNBI coaches will be happy to help you.
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Peter Sandeen lives in Helsinki, Finland, and works with the top marketing decision-makers in a wide variety of companies. Instead of specializing in any specific tool or strategy, he focuses on the principles that drive results. Roughly 75% of Peter’s clients are B-to-B companies, including many marketing companies, which has earned Peter the nickname “the marketers’ marketer.”
Sharon Burch lives in Lawrence, Kansas, and teaches nurses how to grow thriving, sustainable businesses that increase their autonomy, freedom, and fulfillment. She has founded several successful for-profit and nonprofit companies and provided business development and marketing consultation to the American Holistic Nurses Association, the American Holistic Nurses Credentialing Corporation, and the Hawaii Yoga Institute.
