Experimenting with Tiered Pricing

January 27, 2017

Is tiered pricing the way to go if you feel like your full pricing is too high for some clients you want to work with? How can you create packaging for your offering that allows you to work with dreamy clients while still preserving the integrity of your business? We’re sharing our thoughts on how to experiment with tiered pricing as well as some questions to ask yourself to make sure you’re doing it for the right reasons.

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"Don't short yourself by assuming that someone doesn't have the budget when they very well may."
- Emily Thompson

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Braid Creative

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Transcript

Emily Thompson 0:02
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Kathleen Shannon 1:20
Hey, guys, it's Kathleen and Emily here for today's minisode. We've got Caitlin here with us. Caitlin is our content director, and she helps us get everything together. And we wanted to bring her on today to help us with this minisode. So Caitlin, what do you have for us today?

Caitlin Brehm 1:37
Okay, so today, I have a question that was in the big boss Facebook group. It is about pricing and charging. And I know this is a topic you've covered a lot. But I see this mistake, potentially question mark, coming up over and over again. So this question is from Marie, and she said question for those who offer Creative Services. So all of us, if someone is asking you for a quote and you have a feeling their budget is smaller than what you normally charge? Do you sometimes offer a smaller version of your services or even levels, so they understand why it costs so much and might allow them to choose a simpler option. I was asked to edit blog articles. And I'm thinking of offering a basic rate, lowest rate for a simpler view. And my follow rate, which normally includes more SEO work and creative writing, should I do it? Or am I kind of falling in a bit of imposter syndrome? And should I stick with my prices anyway?

Kathleen Shannon 2:33
Ooh, I think that this is such a good question. After the first part, I was instantly feeling like no, don't offer a smaller version of your services or levels only do what it is that you want to be known for. However, whenever she starts to position it as a way to educate her client and what all she's offering, I do think that tiered pricing could be a really great way to do that. So I kind of changed my mind. I like the idea of it. And I think that you can try it out and try it on for size. And if only people are going for that lower tier, maybe start to throw in the SEO work and creative writing just so that you have it as a portfolio piece. But otherwise, like hopefully people will see the value in it and go for your higher tiered option. What do you think Emily?

Emily Thompson 3:26
Yeah, I mean, I don't think there's like a cookie cutter blueprint for how you build a business model offering your expertise. And though Kathleen and I have both done some work where, where we have one offering that allows people to very easily make this make the decision as to what it is that they're getting. And then you always know exactly what you're creating. There is also tons to be said about offering tiered pricing, I love the idea of of giving someone a low priced hook to get them in, and then having the availability to offer them other services once they become a client. There's definitely some pros that come with that as well. So I would say test and change. Try it out with tiered pricing to see what happens for a couple of months. Try it out with just one offering for a couple of months and see what happens. The goal though, is to stick with your guns. Whenever you do choose whichever one you are testing at the moment, if someone comes and says no, I want this thing like stick to the one thing you are currently testing and try it out for a good chunk of time and then make a change. There's there's an infinite number of ways to do business and to package your services to help the people that you are here to help. The key is to not get overwhelmed with all the options just give yourself a couple of ways that you want to try it out. Try it out and see what works best for what it is that you offer and the people that you offer it to but also how you want to work. Keep those three things in mind and you will Slowly but surely get to the business model that works best for you.

Kathleen Shannon 5:05
Alright, so I'm rereading through this question. And one of the things I want to point out is that she's saying that she really wants to work with them, right? Like, if someone is asking you for a quote, and you have a feeling their budget is smaller than you normally charge, Do you sometimes offer a smaller version of your services? If it's someone that you really want to work with? The question that you always have to ask yourself is, okay, how am I being compensated here, right. And so if the compensation is creative freedom, like you're going to get a lot of creativity and be able to build a really great portfolio piece, I would go ahead and offer them the full package, but just be really transparent and say, Hey, I have a feeling that your budget might not allow for what I typically charge here is what I typically charge. But let me know what you can do, maybe we can work something out. And maybe it's not necessarily offering a smaller version of your services. Because I know for myself, whenever it comes to doing a branding package, I only know how to work through my process, the best way that it's already established, right? So the braid method is already established as a process. And I've tried tearing it down and making a smaller kind of brand identity version, but I still end up doing all the work just at a cheaper price. So for me, I've learned it's best just to be transparent and authentic and upfront and say, This is what I'm best at. This is what I typically charge. If you can't afford that I really do want to work for you. Maybe we can work something out where maybe there are no revisions allowed, or there's create more creative control, or there's some sort of opportunity for Oh, what's the word I'm looking for? Where like maybe the client provides a badass testimonial? I mean, there are different things that you could kind of do to make the compensation worth it to you that isn't necessarily monetary. Does that make sense?

Emily Thompson 6:55
Absolutely. I think that's really important. But and one thing I want to warn against is this idea of you have a feeling that their budget is smaller, unless there's actually been a conversation about budget, you're not allowed to assume anything about someone's budget, because you're probably wrong. Or you quite often will be and you will be selling yourself short. So make the money talk part of your early process so that you are not shorting yourself, by simply assuming that someone doesn't have the budget when they very well may. That's a very common mistake, especially amongst you, ladies. And I think that holding your ground on that is very important. And also make sure that these are clients that you really want to work with because of who they are not because you need money, or you need the project, all of those playing into that is very important. I would never offer less services for someone who was any thing that less than super dreamy, because once you're in with them, and they're not paying you as much regret for the whole situation can come quickly. So build on

Kathleen Shannon 8:02
all of that red, but resentment, and that is no way to be at

Emily Thompson 8:06
all right, exactly. So keep all of those things in mind as you are navigating this. But I do recommend testing out business models, as to how it is that you want to package and offer your services and stick to it as you are testing those to find out what works best and how you like working and how your clients appreciate and get worth out of the services you provide.

Caitlin Brehm 8:33
And I think that's one of the things to remember here too, is that usually, we teach people or we want to know that No means no. But in the creative entrepreneurial world note, as always, you know, so if you give this client your top normal rate, and they say no, then you can say, Okay, let's talk about this. Whereas before,

Kathleen Shannon 8:56
it's such a good point.

Caitlin Brehm 9:00
And this is something that someone commented on this Facebook question, Michelle said, in my experience, the clients that aren't willing to pay what I'm worth are the more difficult and demanding. So if you email this client that your price as half as much as you would normally charge, they're going to treat you like someone who prices their work at half as much as you charge. And that might not be fair to you.

Emily Thompson 9:23
Right? We'll see. There's a difference, though, between offering a discount for your service and offering tiered pricing where you're still getting paid just as much for the work that you're doing. You're just doing less work.

Kathleen Shannon 9:34
See, and that was my point, I have a hard time doing less work. Like I can only offer my best every single time and that's the only work that I want to be doing. You know what I mean? So you're either getting it all or you're getting nothing or you're getting it all at a reduced rate for whatever reason that never happens anymore, but maybe earlier in my career it did. Um, my brother who is a sideshow performer always gets freaked out in the negotiation phases of getting again And I feel like sometimes he under sells himself because he feels like if he says, Okay, my fee is X amount, if someone says I can't afford that, that it's just over and their relationship is forever ruined. And I tried explaining to him like, no, like, they could say, Hey, I can't afford that. And you could always come back and say, Okay, cool. I've actually got some wiggle room, those dates are completely open for me, I would love to work with you, let's figure something out. And then that way, he maintains control over the relationship, because that person now knows that he's doing them a favor by reducing his rates and his fees. And so that's kind of the way that I see this question as well true that you maintain control by letting that person know you're doing them a favor by reducing your rates. If you choose to

Emily Thompson 10:48
True that, I think that could definitely work. There's a million ways you can do it. Here's the point of all this rambling between all of us is that it's just going with your gut, I think it's it's doing work that you are proud of both in what you offer to your client and what you take home at the end of the day. So find the thing that works for you and make it do. Hey, their bosses around these parts, we preach the necessity of email marketing for your creative business. Sometimes we joke about not being podcasters, but that we make our money writing emails, but the truth is, that's not really a joke. Email Marketing is the engine that runs our businesses. We share a lot of content around here from our own brands Indie Shopography and Braid creative to all that being boss is going to become and we rely on a single system to make sure that we're making the most of our email list and the messages that we share with our tribe there. That system is ConvertKit I spent months testing every system I could get my hands on to ensure that the switch we were about to make was the right one. And we've been really pleased with our choice. We immediately found ourselves diving into using the system to more automate our email marketing content, and to better segment and target our growing list of cool creators looking for the right content for them. If you're in the business of sharing content, we recommend you check out ConvertKit try ConvertKit for free for 30 days go to beingboss.club/ConvertKit to learn more. Did you like this minisode Be sure to check us out on our website at beingboss.club. There you can find more from being boss including our full episodes minisodes and blog posts. And while you're there, be sure to sign up for our mailing list so that you can get access to behind the scenes and exclusive content from Kathleen and myself to help you be more boss in your work and life. Do the work be boss