Pam Slim’s and Charlie Gilkey’s Lift Off Retreat had some big Eureka! moments for me, and two of the biggest were around products and pricing: the importance of offering both products and services, and a no-fuss, no-muss way of thinking about Free. Nothing theoretical, just practical usable stuff.
This Ain’t Your Grandmama’s Product Funnel
One of the retreat exercises was to draw a product funnel with our products and prices in it. Typical task, right? Except their example wasn’t a typical product funnel (to me), because there were services in it, not just products.
As I expected, free stuff filled the wide top of the funnel and prices increased as it narrowed to the bottom. But services with more and more direct interaction replaced the list of ever larger and costlier products that I was used to. Pam noted that more face-to-face time was required as services progressed down the funnel, and prices increased “…as folks get more you.”
So the funnel was wide with free stuff (blog posts and articles and downloads), and then narrowed to passive stuff (like ebooks and recordings), and then group stuff (like teleseminars and events and membership sites), and finally tapered to one-on-one stuff (like consultation and coaching).
Or at least, some folks’ funnels were full of those things. Mine wasn’t.
My funnel stopped at the top. I had plenty of free stuff planned, with articles and ebooklets and whatnot, and then I had Buying Guides priced under $50, like the one for shopping carts. And that’s all I had. No services, no consulting, no teleseminars, no nuttin’.
That big blank space at the bottom of my product funnel was clearly a problem.
Why We Have to Fill the Funnel
The best thing about products, as you know, is they can bring in money for ages after we’ve published them. Which is a beautiful thing, right? Because otherwise our income is limited by the number of hours we can work.
But!
If we depend solely on products we’ll always always be investing our time first and getting paid way way later. Maybe even weeks later, depending on how long it takes us to pull the product together. Not. Good.
Pam’s brilliant idea for me was to offer a monthly retainer package for folks who’ll need my research services regularly. That way they can depend on a slot in my schedule, while I can depend on the income each month. And of course there’s always doing research for people in an as-needed kind of way. If you don’t offer services, maybe think about how this could work for you…
Because for me, this means doing specific, personal research for a handful of folks while I dig into the general research that benefits us all. I see this as a strong, reasonable balance for both my work flow and my cash flow, and I’m hugely grateful for Pam’s input.
Whether you’re only offering products or only offering services, I think this whole products + services thing is something to chew on. Because I’m coming to see that it’s not sensible or safe to entrust all of our income to one way of working. Hands-on dollar per hour work is limited by the clock and the calendar. And creating a product leaves us hanging in the wind until it’s finished. Best to do both in whatever way that balances well for us.
Nothing We Do Is Free
Somewhere among all the talk about my bottomless product funnel, Desiree Adaway resolved an issue that’s plagued me since I started writing online. She noted my overemphasis on free products and questioned whether they were free at all. She said—
“Nothing you do is for free. Either what you do is making you money or you’re losing money. It’s either profit or loss. So you have to build in cost recovery for the things you’re not getting paid to do.”
Pretty straightforward, right? All the debate over free content vs premium content boiled down to either-this-or-that, with a pleasantly practical bent.
I love people who can do that for me. I love it when I can do that for people. Isn’t it one of life’s shitty little ironies that we can’t often, or easily, do it for ourselves?
Which is why it’s way important to be among people from different industries, who are in different places along the path than you, who are willing to listen to your story and—hallelujah!—offer suggestions and direction.
A Bunch of Good Reads on Pricing
All that product funnel feedback later led to a discussion about how to charge for services. We munched away while debating over whether it was best to bill by the hour, or essentially charge for results by offering a fixed price. Nothing got resolved over dinner, and that was okay. Valuating and pricing services is intense, tricky, and ultimately personal stuff…it was plenty enough to take home everyone’s opinions and preferences.
And so I’ve been revisiting some treasured reads on pricing that I’m listing here with hopes that they’ll spark something new for you, or maybe reinforce what you already know. Some I wrote, some I didn’t. Some are short, some are long. None are new, yet they never get old.
Here at Big Bright Bulb
Potluck Pricing: Letting Customers Choose What They Pay
The Value of Value: Snippets On Pricing Our Services
Price vs Value: The PowerPoint presentation, the Koi Pond, and the Kindle
Over At Heart of Business
The Wackiness of Resonant Pricing
Pay What You Can and Tad Hargrave
Whether or Not to Publish Your Prices
Why Your High Prices May Really Be Too Low
Over at The Fluent Self
The art and science of pricing
Coming up with prices. Wanted: ninjas.
Why they aren’t buying your thing
Why DO I charge so much? Part One.
Why DO I charge so much? Part Two.
And a scholarly find that shines light on the prices ending in 9 thing
Patterns of Rightmost Digits Used in Advertised Prices: Implications for Nine-Ending Effects (thanks to @lauriefoley!)
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Hope you enjoy the reads! Let me know what you think, k?
Photo credit: Tony Crider
