One of my favorite ways to drive my friend Margo absolutely bonkers is to disagree with her on fundamental business principles.
(Shout out to all my fellow entrepreneurs who squabble strategy with their business besties on Voxer. It’s not a bug, it’s a feature.)
It’s fun not only because Margo’s voice goes up a full octave when she gets indignant…
… But also because when a pair of humans who agree on so many things find points where they diverge, you both get the opportunity to learn some neat new perspectives — and even settle key debates.
In Which We Totally Solve the Pricing Debate
Which brings us to the topic of this week’s #HAMYAW episode, appropriately titled: “Hillary and Margo Solve Pricing“.
Because honestly, after weeks of arguing back and forth, we kinda did.
The whole conversation started with my #1 gripe with the wedding industry as I planned for my October nuptials (and if you want to hear Margo’s side of this, check for her email if you’re subscribed to her list, too).
Weddings are, in short, expensive AF. And because costs can easily become so sprawling in NYC, my fiancé Zach and I have a fairly strict budget.
So when I was hunting for vendors, it would frustrate me to no end to find someone I liked, search their website for some indication of cost, and find… nothing.
“But Hillary,” you say “Pricing should always be kept off your website so you can customize your quotes!”
Just Tell Me What it Costs!
Maybe, but here’s how the process went almost every time:
I sent an inquiry email.
I waited for a response – sometimes for days – and when I finally received one, I was sent a link to a static pricing page hidden on their website.
No custom quotes. No proposal. Just theirURL.com/pricing
This drove me, as you might imagine, up the wall and across the ceiling. Because it meant every time I sent an inquiry, I would have to wait for a reply to know if that photographer, videographer, florist, or venue was even in budget for me.
Not because they were customizing a quote, but because they just wanted me… waiting, apparently?
Pricing: Share Deets, or Keep ‘em Hidden?
Margo’s argument, after I finished whining, was this: while price transparency is certainly more convenient for consumers, there’s also a fair amount of evidence to support that hiding your prices is the superior strategy.
So after spending some weeks arguing about the transparent-pricing-versus-not, we decided to bring the discussion to the screen.
And the result uncovered a happy medium in our latest episode, which you can check out right here.
Watch today’s #HAMYAW to find out:
1:40 Should you (yes, you specifically) have your prices listed on your website?
3:35 Are you using “starting at” price points to qualify leads BECAUSE YOU SHOULD BE
5:55 Obfuscating when you don’t know how to charge…yikes
7:30 Behavioral Economics nerds TUNE IN HERE <—
9:40 What the heck is “process transparency” and why aren’t we talking about it?
After you watch, let us know in the comments:
Which side of the debate do you fall on, and why?
And in the meantime, enjoy today’s episode — and stay pricey, my friends,
H
Episode Transcript
There we go, all right.
Oh me too.
Now we’re ready. The brows were out of control. (laughing) I’ve always wanted to do that.
It never works out.
(laughs) I know!
(upbeat music)
Welcome back marketing nerds of the world. It is time for another episode of #HAMYAW and today Margo and I want to talk to you about the big, bad, P-word: pricing. Because I’ve got to be honest with y’all, Margo and I got into a little bit of a fight a couple of weeks ago about pricing.
So, if y’all don’t know, I’m getting married this October, it’s going to be a fabulous event here in beautiful Brooklyn, New York. And it has been so frustrating for me, in the process of hiring wedding professionals, like florists, photographers, the videographer, catering, venues, all that, because people do not have their prices on their site.
Now, I understand (laughs) the logic, Margo,
She’s already going into her opinion!
I was frustrated because people didn’t have their pricing on their sites. It was impossible for me to figure out if that person was a fit for me and my budget without jumping through a bunch of hoops or waiting to get an email back. Or worse, get on a call, which is like super annoying, who has time for that.
And by the way, our fights are like, oh if you could be a fly on the wall. (laughs)
Like dance fighting and like, what’s that West Side Story kind of, it’s sort of fun and silly but it’s a lot of drama.
Okay so the context of the debate here is she’s, as a client I agreed with her, I was like yeah that’s so annoying. But as a service provider in my past life, I was like yeah, no never reveal your prices.
Because there’s such large range and there’s reasons why you price things a certain way that don’t necessarily have to deal with the exchange of goods. And this is specific to the service based business.
I think with product, it’s a little bit, well that’s not fair, it’s a little more cut and dry but you also have things like shipping and supply chain stuff. But when we’re talking about service based businesses, there are things like invisible costs, like if I am identifying through the proposal process with you that you are a little bit difficult, I am going to increase my rates because you don’t realize that I’m gonna have to be client-managing you a lot.
A lot more than an ideal client for example. And that needs to count for some of my time.
So it’s not so cut and dry. I’m thinking in the copy writing context of, like, I provide copy writing to you and so you think there should be a flat fee, this is a landing page, this is sales page, this and this.
But every client is different.
You might have certain clients that are going to, you know, have a breakdown every ten minutes so you become their pseudo therapist. And then you have ones that are totally hands off but then see the end result even though you’ve been updating them all along and they have a panic attack.
So there are all sorts of different kinds and you have to account for that in your pricing. You also want to know people’s budgets before you price for them to get an idea of what their expectations are and to level set that.
And so what Hillary said that I, and I’m still by the way on both sides of debate, I’m not sure that I’m bullish on either because you made a really good point about how just give me a ballpark. Like if you are hiring a florist for your wedding and your budget is in the $3,000 range and they’re in the $40,000 range, that’s just helpful to know. And not waste your time.
Ya and that’s why I’m a starting-at price point evangelist because I think that if you have a baseline that people can know where to put their budgets. I totally agree with you on all points, and as I was sort, while I so politely waited, no, but I think, also the interesting thing about this is that these wedding service providers have this, this starting point of this theoretical strategy but are not seeing it through.
And the reason why is because they don’t have their prices on their website but I send them an email, I wait for two days for them to respond and what do they do? They send me a link to their static pricing list on their website.
And what I think is sort of missing from that conversation in the wedding space and around maybe, pricing in general for service providers is, if you’re not going to negotiate, if you’re not going to adjust your prices, just put them on your website.
And I understand that it gives you flexibility, I think keeping your prices off is a good strategy or having start-at prices is a great strategy because you’re going to have to negotiate sometimes. But if your prices are set anyway, why are you making me jump through hoops?
I totally agree. I totally agree, because I think I would assume, I think maybe they’re using it to qualify people more seriously but that’s really stupid, especially if you’re taking two days to respond, like I would automate that shit.
Exactly! And that’s the thing, I think this is where I, especially around pricing and I wrote a whole piece about this, it’s sort of this other instance in pricing, where one piece of advice gets applied to everything and people forget that really every approach to pricing, every strategy, every dollar US to make is in a case by case basis, it’s all about context.
So in the case of wedding industries, wedding industry folks, let’s say a florist for example, if I hadn’t had a clear vision of how much she was able to take on, I wouldn’t have even known to approach her because my floral budget is not super high. And I also know there are some florists who don’t get out of bed for less than, you know, $5, $10K for an event.
And which I totally get and respect, but if I don’t know that and I’m contacting you, you’re wasting my time and your time when you could actually be qualifying your leads by posting start-at prices on your website.
I totally agree there is such a huge range and I think it’s so tricky.
But they heard that advice, take your stuff off your website so you can customize your quotes. But they’re not customizing quotes, you know. It’s just, you’re required to give your email to then get a link back.
I would encourage a lot of wedding professionals offering this if they’re already, to consider reviewing their strategy and making sure that if the fact that their prices are off their website is actually serving them. And part of a bigger strategy as opposed to just something they heard.
I think you play out something really important which is, part of the reason you obfuscate, is when customization is a really big part of what you offer and you don’t have consistent packages.
That is part of it, and then, like let’s use floral as an example, if you ask any florist they’re going to tell you well prices depend because it depends on the season, depends on the flowers, how many you need, they way in which you want them in bouquet, what kind of vases.
Okay fine, there’s lots of levers but it’s also your job as a business owner to know the range of those things. So I think where you get in trouble and where it gets sleazy, is when people are hiding their prices because they don’t actually know and they’re making shit up. And I have worked with those consultants.
They’re like “I’m just going to put this at $150-$200 because I think they have the budget for it.” And it’s like but are you doing that much work? It’s like “no, no it’s just good margins.” I’m like okay, I’m all for margins but that’s just ripping people off. And so I do think you need some benchmarks that you can help people with.
That’s such a problem in the pricing space, when people don’t know, because instead of taking time to estimate, they just throw out a number that sounds good. And sometimes they get it and this is a big divide that Margo and I have been talking about, it’s kind of off topic, but this is a big divide, in the men vs women entrepreneursphere.
Where men are more likely to just throw out the number and “I think it’s worth this, give it a shot,” whereas women are like “okay so, is all this in order, am I being or am I inconveniencing anybody.”
All this and I think the answer is somewhere between the two. It is such an interesting sort of experience seeing pricing across industries because this prices on your site, no prices on your site is a constant discussion in our world, like in the copy write, consultant online business world. It never stops and everyone has got an opinion.
I’m thinking also about the locksmith behavioral economics example, do you know about this? You know how with marketing, especially with writing, anything that’s writing related, people think that they can do it.
They’re just like “well I know words so I’m just paying you take this off of my plate.” And they kind of don’t realize the work involved. And so when I learned about this locksmith thing, it clicked for me for marketing and I’ll make the connection.
So they did a study but the anecdote around it is that, there’s a locksmith and when he’s starting out he comes to your house, let’s say you lock yourself out. And he spends forever just fussing with the door, messing around, you’re seeing how hard he’s working. So when he turns around and says “that’s going to be a $150 because it took me three hours,” you’re like “oh my god thank you, you did such a good job.”
And the better he gets, the less time it takes and then all of a sudden he’s doing it in 15 minutes and he’s charging you $150 and you’re going “$150 for 15 minutes of your fucking time, like, I’m not paying that!” And people started to get mad.
And so this particular locksmith actually took a longer time just for the fuck of it. Like he would have gotten the lock undone and then he would just fuss around for a little bit longer just to get people less angry and feeling grateful and paying his fees.
And so the point of what we show is that we need to see the work involved or we don’t see the invisible labor of the 15 years of your life it took you to get to doing it in 15 minutes. And so that’s a little bit why I am pro hiding your prices and getting to where you get alignment on what the work involved is.
And so you have respect from the client, like okay, is this and this and this and this and wow that’s a lot of stuff. Now I get it’s worth paying for.
So I think that that is the ideal situation but what you’re talking about and where this differs is that like truly you should qualify leads coming in in the first place who get how hard it is. But does that happen, no, we have to take people.
But I also think, and to your point about just sort of taking it back to our world a little bit, I think this is also the reason why if there’s not pricing transparency but also a good way to build a case for value either way is process transparency.
And this is what every freelancer or creative professional should have a clear layout of their process, if not on their website, then in their materials. Mine is actually off my website right now and I’m thinking of adding it back in.
By showing your process, you show the amount of work that goes into it, again all the things people get like extra strategy calls, revisions, discussions to help them figure out this, this and that and then final delivered product, wrap up call, all that good stuff.
Having a clear sort of layout of your process and having transparency around that is just as important as sort of figuring out where your pricing lies or deciding whether you want to be transparent or not. Regardless of where you’re at with your pricing, process transparency is a must.
I totally agree. I also think that comes from doing it. Like I have a friend who is doing content for the first time, she has to write a few articles, and she asked me to review her proposal. And there were little things that I was like this is going to take you so much longer than you realize.
She’s like well, it’s just a few articles. And I’m like how many headline revisions are you going to do? How many rounds of revisions are you going to let them see? Are you showing them draft one or are you doing six drafts before you show them draft one? Are you doing a CTA at the bottom? Are you putting it into their website or are you just handing them over the copy?
All of these little things that you would only know from having done it before.
Yup, absolutely, and that shows that having the step-by-step and thinking all of those little things also helps your clientele and customers feel taken care of. That’s a huge part of why people pay a premium in the first place.
People pay a premium I know for my writing because they’re like “she’s got great ideas, she knows strategy, she understands sales, like, here’s what I got, run.” And run I do and that is what people pay for.
Outside from the results and excellent quality work. But it’s also the fact that I’m taking care of it. It’s like, sort of imagine having housekeepers come to your house and have them be like “okay so like can you demonstrate the way you normally do things.”
Like they come in and they get to work and that’s why you hire them. And I think that while the convenience factor is not a 100% of why people hire copywriters, or designers or consultants. It is a piece of the reason because they want someone they can trust behind the wheel so they don’t have to worry about it.
So that’s why revealing process and having that discussion, having again, a signature process is so important.
Yes, and yes just yes, all of it.
I love when you agree, you’re so enthusiastic.
I feel like we set this up so people would think we were fighting, we were you guys, I swear!
We were, we were, but we spent so long talking about it.
We’ve been talking about this for weeks and this is going to air way later so who knows, we might be fighting again. (laughter)
But that’s the thing, what’s cool about fights at our level is that we should be like disagree, here’s why, and you can go toe-to-toe and then sort of meet in the middle. But it really does answer the question for price transparency, of what you list and what you don’t.
Think premium versus not also matters here. Because often times you hear, and I get this, is that if it’s a price shopper you don’t want them. If their first question is how much does this cost, it’s probably not a good client for you.
SO if that is true, I get why you would want to keep that under wraps. But I also think you want a good starting point. I like starting points.
I agree and it’s also, I think we also have to remember that again context, context, context because some people will have businesses where there could be a huge range of what they charge for the same product for a solopreneur versus a fortune 500 company.
I mean, if you work both in private business and, as in small business and corporations. So a consulting package could be a $1,000 here and $10,000 here for the same service if they can afford it.
Same service.
Ya, but a lot of businesses are in one or the other, so I think that’s also worth noting as well. Where if you want to give yourself the freedom to have that range, make sure you’re using it. Otherwise, you can use a starting-at price point to qualify your leads.
Yup.
I think. I promise we were arguing about this guys.
I think we just solved it.
You’re welcome internet, online business we just solved the pricing question. Yay, that will be the title, Hilary and Margo solve pricing.
And scene. Well you guys, thank you so much for watching. I’m Margo Erin.
And I’m Hilary Wise.
We will see you in two weeks. If you liked this episode, please like it below, leave a comment, we are always responding. We will go deeper with you if you disagree with us. We love to hear why, but be nice about it. Subscribe, tell all your friends and we’ll see you in two weeks, bye!
Bye guys!
Photo by Juliet Clare Warren
