Stop Discounting: How to Fix & Sell at Your Fair Price

Today on the podcast, we're going to be looking at how, or rather why pricing isn't the only issue in your business. Again today on the podcast, we're going to be looking at why or how pricing isn't the only issue. Because I've said it on the podcast in the past and I'm repeating it again today. Even if your product or your service were free, believe me, not everybody will take it. You think price is the issue. Also, every time you drop your price, you say someone in our 50K, people say, ah, it's too much, it's OK, let me charge 700.

You say, ah, it's too much, let me charge 6650. Ah, it's too much. Let me charge 600, let me charge 500. Let me. Even if you get to 0, some people still will not take it. Pricing is not the only issue and that's what we're going to be looking at today. Now I'm making today's recording at home, so expect to hear some noise in the background, especially since the in laws are around. We have a big celebration coming up. So you know the house is full.

So anyway, what we talk about over here on the podcast is not my family issues, but rather business strategies, things that work over here in Nigeria. And if those are the sorts of things that you want to hear, then you are in the right place and this podcast is your jam. So welcome to the podcast, I'm your host Tavishima Ayede. Now for years this is just all I've been doing touching on ractical realistic relevant issues that will drive results for Nigerian businesses.

So if you're ready to flashy all those generic podcasts, then stay locked in. Subscribe here on Spotify, YouTube, Apple or any player of your choice. And if you'd love to connect then call, send me a text message via WhatsApp message on 08064662140. So like I said today, pricing is not the only issue because if your product or service was free, not everybody will take it. If pricing is the issue and you remove price, in theory more people will jump on board.

But let's look at this particular context. I have a client, they are in the content production space producing content for social media and they want to roll out their services and they're thinking of doing that by offering a, by using a free offer to build client acquisition. In other words, the idea is this, you start off in the market and you say, guys, I'm free. Then people will rush you bro, you people don't rush.

They will say this is a very good service. Then you now tell them, why pay me this amount? Some people will run away, but the people that remain, hopefully you'll be able to get some good business out of this. So that is using a free offer as a client acquisition strategy. Say you're free, people will rush to, you charge them something, some people run away. The people that remain and pay should be enough to fund your business.

So that actually is the strategy behind freemium business models. So if you remember on the podcast, when I spoke about the guy in Abuja, excuse me, whose business was an E library, it's the same thing. You start your E library, you have the app, it's free, and then millions of people jumped there or hopefully millions of people do. Then after a while you raise the price and of course when you do that, hundreds of thousands of people will run away.

But hopefully the few 10s of thousands of people that remain should be able to pay you enough. Then you should be able to run your business. So that's the idea behind freemium business models. Now there's also something free in the tax base. They call it product leg growth. And the whole idea is let people feel your product, let them use your product, let them taste your product with, well, not taste. I mean, it's usually for software products.

But shall I let people feel you, let them see you, Let us see what you're all about. And then that should be enough to be able to get paid users at the end of the process. So you can see that this is not something that these new businesses have been doing it for a while. This whole idea of let us start off free and do this and do this. And hopefully at the end of time, some people will paying. Now when my client told me this,

now this is how they intend to bring their product to the market. I was against you too. I told them I say, look, look, look, look, look, come on. What we're supposed to do in the beginning is we're trying to look for 12 clients because you know that if 12 clients pay so, so, so amount, this is enough to finance the business for the next three months. But anyway, I'm not in charge of what clients actually do. So they went, they had their board meeting and they decided that they would do this free thing.

So it's my own responsibility as the consultant on hand to say, OK, if you've decided that this is how we're going to go about it, let's, let's go ahead. Let me see how best I can help you. But this is the reason why I'm against these sorts of strategies because when you're doing these sorts of things, listen up, the best conversion you can hope for is between zero to 3%. I repeat, I've said this before in another podcast.

I'm saying it again, and funny enough, immediately after I did that podcast, somebody actually wrote in and said, ah, excuse me, person. I said, ah, not me too. This is the result I got to. I sent out 75 from the 75. One person paid. After one person paid, another person said, let's take a meeting. And then the person didn't show up for that meeting. So you can see that what I'm saying is true. Zero to 3%. That's the best you can hope for.

And then I told my client to look, if the goal is I want to get 12 clients at the end of this, and conversion is usually between zero to 3%, that means you have to do about 400 free jobs to get 12 clients. When I said it, the girl's like, wow. I was like, yeah, that's that's what it means. So you see how we need to be, how will I put it? The sales strategies that we choose to adopt will determine the amount of work that we have to do at the back end.

That's why we have to be careful before we decide we're going to do this. We're going to do that because my own initial goal was OK, 12 clients. Let us take a much more direct approach, traditional prospecting approach. We'd all come up with a list of potential customers will come up with a plan for how it is that we're going to approach them trying to get 12 clients from targeting a few dozen people. You know, let's say you target 5060 people at the end of the day, you're hoping to close 12,

you know, small. Some people say that one is more hard work. Anyway, it depends on how you look at it. But for me, I prefer that if we want to get 12 clients, let's drop a list of, you know, 50-60 people and then let's let's attack it any which way. We should be able to get 10 at the end of the day rather than picking this kind of process, looking for a 3% conversion and having to do 400 free jobs before we get to our clients.

Now another reason why I didn't like this approach was because you know, business is 2 parts. Number one is finding the work or finding the customer. Number 2 is actually doing the work. So it is easy to say we'll do this thing for free and then 400 people will rush. But do you actually have the manpower to do the fulfilment? Are you sure you're not going to be overwhelmed with your production process? 400 free clients.

So these were my initial concerns. But anyway, like I said, as a business, they met because they have a board and they decided. So now it's out of my hands, but sure, that's what they're going to do. So yeah, that's it. So that situation with my with my client, but the reason why I'm making this podcast recording today is this, I have said in the podcast before that pricing is not really the issue because let's face it that even if your product was free,

there's some people that will still won't buy. So pricing is not the only consideration we should be looking at. It's not the only factor that we should be adjusting whenever we're in business problem because it is one of the easiest things to adjust and that is defaults that most people do. Business is not moving. Let's say your product is a 30K for one business is not moving. You say more do promo come on by to get one free or let's do a promo 15% off between now and December 25th.

So fudging the price is the first thing that people do and it's not my favorite option. There are other options, but I'm not going to go into them because I've already spoken about these things at length in other podcast episodes. Anyway. So in trying to sell these companies free offer, remember it's completely free for one month. You won't pay any money. Some people have been sceptical, which is normal. You know, you offer anything free and I just, some people be saying what's the catch?

What's the catch? And then there are people who understand that. Oh, there is no catch that if after one month I don't like it, I don't have to pay. And the things you produced, I will still keep it. Even at that, some people understanding, some people are still saying, yeah, not interested. Let me repeat now some of you who think that if you offer your product or your service for free that people will rush you because money is an impediment.

Money can be an impediment, but there are other impediments as well. Other factors to consider why people are not doing business with you and money is not the only one. So trust me, try it. Whatever your product or services, drop it for free. Even if your Mama put offer your food for free to 100 people, not 100 people are going to take you up on that offer. The moral of the story is this. Some people are not going to buy from you even if it is free.

Excuse me, I repeat, the moral of the story is this. Some people are not going to buy from you even if it is free. So my own general recommendation has always been this. Try and figure out a fair price and stick to it. Again, I repeat, figure out a fair price and then stick to it. No matter what happens, some people come up with a fair price by looking at their contemporaries. OK, I'm coming into this business. I want to open Barber shop or I

want to sell how to do chicken ray. I want to sell mobile gadgets. Then you look at your neighbor. You look at your neighbors. How much is this business charging? How much is that business charging? Oh, OK, Business A is charging 2.5. Business B is charging 2.47. OK, Yeah, I don't want to be too expensive. Me, I'll just charge 2.4. So that's what some people do. They come and look at their contemporaries, they come and look at their competition and then they fix the price.

But once you have, in my own opinion, once you have fixed that fair, what you think is a fair price, stick to it. The other people who are going to fix their price because they're looking for a number that makes sense, that is OK for them to stay in business, they're OK. Look, I want to sell these gadgets and how to make X amount of profit and so because of that I have to put XYZ profit margin on each of these products.

Once you have fixed this thing and you think it's a fair price, stick with it. Don't fudge your price. Your focus should be on your targeting. Are you talking to the right people? Because they're business owners, people who are self-employed, people who I meet. Honestly speaking, price is not that bad, but the problem is you are talking to the wrong people. And remember I keep saying that there's no amount of talking to the wrong person or the wrong people that is going to magically make them materialise into the right kind of clients.

Focus on your targeting, focus on the ICP, the ideal customer profile. Who are the main people that you're supposed to be talking to. Also bear in mind that the other buying considerations are that people want or need or are interested in the thing in the 1st place. Then of course they have to be able to afford it. And then there also has to be a certain amount of urgency. So you can meet somebody and say that this thing is free, but right now there's no compelling reason right now why they should take you up on your free offer.

And if there's no compelling reason, people are not going to move. So fix your price. Isn't it a reasonable price? What are your contemporary charging? How much do you need to stay in business? Is the price OK? Good. Don't change that price again. If anything is the problem. First of all, I assume that you're speaking to the wrong people and try and refocus. Try and target. It is advertising that you have been using to bring in clients.

Look at your targeting parameters in your Google or in your Facebook. Facebook ad manager. Tweak from there first before we go and start tweaking price. If you're going out physically and talking to people, assume that you've been talking to people in the wrong neighborhoods. Sit down, brainstorm in the office, you and your people and figure out where is the right neighborhood of people that we should be hanging out in.

Which offices should we be going to? Which markets in Abuja or Lagos should we be trying to be in? Which kind of stores should we supposed to be? Are we supposed to be in? Figure out all the targeting issues first before you start forging press. Then when you're having conversations with potential customers, excuse me, make sure you're doing good qualification and discovery. Make sure you're asking them questions. We need to try and figure out if they want this thing, if they need it, do they have a problem?

How bad is the problem? Of course, we always get to the money conversations. Can they afford it? And then a sense of urgency. There has to be something that has determined why they want to take you up on this offer. In fact, for this, my potential customer, sorry, my my current client and my clients actually, I was able to fix up a meeting between them and another company. And it's one of the questions that I asked the other company.

OK, we're glad that you're on board. Looks like it's a good idea. So I asked them, I tried to figure out the sense of urgency. Is there any particular reason why you're willing to take them up on this offer for free content right now? And then they started talking now, Yes, because we're so, so, so and so industry. November and December are usually big periods for us. This is currently mid-october. If we can agree now and if we can even start now and it's something that can yield effects, this actually is a good time for us to get this sort of thing going.

And then also add them, you know, also ask some questions, you know, around around money. In fact, let me even check my notes because it's just now. Now, now we finish this meeting. What did I ask you again? So I asked them, OK, you're aware that this is a free offer. They say yes, that's very good. How much have you budgeted to solve your content needs? Like you will have somebody internal, How much do you pay that person?

Do you both source from external? How much have you guys budgeted? We we had to have that conversation because I'm mindful of the fact that this is my customer who is giving our free service. I'm mindful of the fact that at the end of the day, they still need to have that conversation. OK, this one month is up. The free one month, one month offer is done. I hope you're happy. Now that you're happy, can we start talking price for a paid engagement?

So I asked the question, we're trying to figure out how much they budget for content production. So when I say qualification and discovery, I'm saying these are the kinds of conversations that you should be having with people. So summary, what it is I'm trying to say is this. Once you have figured out what your fair price is, keep it. If you want to change anything, work on your targeting first. One moment. OK, sorry about that.

I'm back. Like I said, it's a full house and my attention was needed elsewhere. So yeah, sorry. What I'm trying to say is decided on the price. Make sure it's a fair price. Look at what your contemporaries are charging. Make sure it's an OK price for you to stay in business. I'm sure the profit margin is OK because there's no point in charging, you know, whatever the amount is. And at the end of the day, when you add up all the profits is not enough to give you a healthy lifestyle and it's not enough to finance the business.

So once you meet that, excuse me, once you meet those factors, don't play with price. Again, leave price alone. And I'm talking to people who are in the SME space. I'm not talking about people in the FCMG business. Is the FCMG fast moving consumer goods FM CG, FM CG. So coca, Coca-Cola, Unilever, you know all those people, they can be playing all these games, you know, buy 2 get one free, reduce 75 CL to 50 CL. Like they have lots of tools to play with.

That's a big boy game. That's a big girl game. We haven't entered that level yet For those of us in the in the SME space, small and medium scale enterprises. Have you fixed your price while I leave it? Then the next thing you try and do is to fill up production capacity, right? Some of you, the problem that you have is not really the price per SE was because you're not doing enough enough runs at the end of the day. Let me give an example.

So back in the day when some of us are waiting photographers, some of us were obsessing over the fact that OK, I'm only charging 250K. And then you see that your friend is charging 450 and then you want to increase your price to 450 or you're charging 250 and you think because of that, that's the reason why you're not getting enough work. But then you notice that some other guys charge you 150 and it seems to be busy all the time.

Then you drop your price to 150 instead of playing all these games. IF250K was what you thought was a fair price in the beginning, keep it at 250. Then fill up your production capacity. If you're waiting photographer, that means you're working Thursday and Saturday. At least back when I was in the business, that's how they used to do it. Thursday for traditional, then Saturday for the main domain. Some people do Friday and Saturday.

I never heard of Saturday and Sunday. So you're working two days a week if you're only getting one wedding a month. What you need to do first is fill up your production capacity. Try and see how like double down on your marketing, Double down on your sales until you can fill up four of those weeks. First week you're working, second week you're working. Third week you're working, 4th week you're working. After that you can now start playing price games but fill up your production capacity.

Get good at sales and marketing. Make sure that your funnel is full first. After that you can start playing around with pricing. The reason why I make episodes like this is because too many of you, the first thing you touch is pricing. These my clients. To be honest, I'm not happy that we agreed on the game plan. We say we won't pursue 12 clients. Well, let's drop a list of about 50 people to start with. Let's go after them.

Let's see how many we can turn into clients and now change the plan. I'm not happy, but that's what lots of people do. Let's drop the price, let them rush. Pricing isn't the only issue. The other issues involved and if you doubt what I'm saying, just try it, make your thing free. He will surprise you. Not everybody's going to take it. It will shock you. Not everybody's going to take it. Look at the offer that my client is doing one month free social media content.

It is the kind of thing that me, if I was on social media, even if I don't need the content, I will say for free. You say yes why now hook me up. I'm not on social media but if I were I would tell them hook me up one more free but still people ain't biting. That's because price is not the only issue. So that's it and that's all for today. I am hoping that today I have reached a brother or a sister who is sitting down and who is wondering.

I'm charging 15K for one. I'm not getting market. Should I start charging 13 five? My sister do not charge 13 five. IF16K was what you thought was a fair price when you started. Keep it at that 16 K. Let us now see whether you are targeting the right people. Are you marketing in the wrong neighborhoods? The copy that you use when you're promoting stuff on Instagram, the copy, the words, the text, what is it like? What is it like the images you're using?

Is it compelling? The call to action that you have, Do you use a compelling call to action if you're going to market physically from neighborhood to neighborhood? Are you in the wrong neighborhoods, Abby? Are you in the wrong estate? Maybe you should stop trying to sell indicator and start trying to sell in VGC instead. Let's work on the targeting. Then after that, we can even be working on the conversions. Maybe it's that you're talking to 50 people out of every 50

people one person buys. What is it that you're saying or not saying? How is it that you are handling the conversations or not having the conversations that are not causing more people to convert? Keep your price at 16 K. Let us see how you can be talking to 50 people and instead of doing business with one, let's see how you can do business with two, with three, with four. If you're only busy once a week, but you have whatever it is that you supply.

Let's say you have the ability to be working 20 days a week. Let us see how quickly we can fill up that production capacity. Let's see how you quickly we can get busy at this 16 K. Let's see how quickly we can fill up 20 days. When we fill up the 20 days ahead, we can now start playing with price. You truly, truly, truly. You feel that you're too expensive and no problem, you have solved the sales and the marketing problem.

If now you want to drop your price off, to drop your price to 13 K because you think you're too expensive and you want to give more value to your clients, then go ahead. I won't argue with you. What you will find, most of you listen carely. What you will find most of you is that when you fill up your production price, yeah, your your production capacity, you will find that you are not charging enough. I repeat that some of you who will fill up your capacity, I'll find out that you are not charging enough.

Like the gentleman that I spoke to was in the business of preparing CVS for people. When he filled up his production capacity, he realized that or more. I am not charging enough to stay in business because I'm working morning till night. I am now hiring my stepbrother and my step sister to help me at the end of the month. This is the only thing that we have. We gas to raise our price. I didn't tell him it's time to raise your price.

He's the one that told me I have to raise my price. But guess what? He had solved the sales and the marketing problem and he has filled up production capacity. That's the kind of thing that will give you confidence because you can't see the customers. You can't see them. It is clear that you have solved your sales and marketing challenges. You're confident that you'll be able to find another customer. So you know that even if I raise my price from 22 to 27 and some people disappear, I was able to fill up my production capacity,

I'll be able to fill up my calendar, I'll be able to fill up my funnel, I'll be able to fill up my work schedule again. So please, if there's any brother or sister listening now and this is the debate that you've been having in your head, should I drop my price from 19/5 to 14/5 to see if I can get more customers? My brother, my sister, leave it, leave it. There are other things to solve 1st. And if you don't believe me, do what is my client is doing, make an announcement, tell everybody I'm doing these things free.

You will see they even are free. Some people will still tell you. Let me think about it. Price is not the only issue. So that's it. And that's all for today. Remember, if you'd love to connect, you can call, send me a text message or WhatsApp message on 08064662140. And if you're ready for more content like this, then you are in luck because in whatever feed that you're listening to this podcast right now, whether it's Spotify or whether it's YouTube,

we have over 1200 episodes here with practical insights that you can listen to. So after you're done, scroll, listen, but don't just listen. Take a pen and a paper, make some notes about things you want to change, things you want to apply. Apply. Give it a bit. It takes a while for some things to kick in. When it kicks in and you're making progress, let me know. It's one of the reasons why I give up my phone number. I love when people call back for testimonies.

Somebody sent me a message today like, hey, you know, it's been a while since we spoke. This is the update on the chicken farm. I have X number of heads. I lost a couple. We're designing promos. We're going to start publicizing. We're going to start promoting soon. You know, I like hearing these sorts of things. This is what informs the podcast. This is part of what keeps me going. Yes. Those people who pay me money. Yeah, you also keep me going.

But for those of you who don't pay me money, there's also a spiritual benefit. I like the fact that I'm putting out ideas. People are applying the ideas and they're seeing progress. That's the reason why that copper when she told me like she had done three straight months of business at 100 Ki was very happy. 100K month, 1100K month, 2100K month 3. Some of you say what is 100K and yes, what is 100K? That's not money. But somebody who's on official salary of 75 K and she has already tasted the habit of making 100K by herself, her own money and she has done it for three months straight.

I forget it. In four years time, where do you think she will be? What do you think the kind of woman that she will become? I mean, just is she the kind of person that somebody will throw notes in her face and they will destabilize her and she will shake no. So apply you make progress. Hit me up, let me know any questions ask I'm willing to ask. In fact, for some of you, that informs future episodes. Anyway, it's already 30 minutes,

so let me not keep you guys for too long. I'll see you soon at the next episode.