Pricing Products, Books, Deals and JVs
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In this Issue:
*Deals and JVs
People frequently ask me at my seminars and bootcamps what they should charge for a product that they’ve developed. My answer is always pretty consistent. Start with the number that reflects how much someone can legitimately make in the next 90 days if they use the product as you suggest.
Let’s say that you can make people an additional $3,000 in the next 3 months. What would you pay for a product that you KNEW would give you that much additional cash! Shoot, at least $1,000.
The next question would be: what are your competitors charging for similar products? Concerned that you are charging more than others? Don’t be. If you have a good product and can back it with a great guarantee, I’d rather have you be the Neiman Marcus rather than the K-Mart in your field.
Most people underprice their products. Don’t be one of them.
The question is not how much the product cost to produce. It’s how much it will make someone if they use it. It’s what I call the VALUE EQUATION.
I saw a well known speaker in the chiropractic industry sell a single 60 minute cassette for $500. There were 500 people in the room. About 380 people bought it. He was guaranteeing an increase in business of $10k in the next 90 days with a money back guarantee. How could you NOT buy?
If you’ve got a product that won’t make people money, but instead, improve their health or something like that, ask yourself how much will it save them to use your product. If you don’t price this product at a minimum of $300, you’re nuts.
Your Action Point
Use the VALUE equation to set your product/service prices. Don’t be scared to charge good money for good stuff!
I try and “write” 4 books a year. I put the word WRITE in quotes because some of the books I write completely, others I outline and write the vast majority of the material, and still others I just outline and have someone else write for me.
Why do I spend my time on creating books? After all, they are a very inexpensive item. Most books sell for between $10 and $30. I look at books as a lead generator. Strictly a way to get people into my funnel. I make my REAL money selling everything that comes AFTER the book.
That would include audios, videos, seminars, coaching, consulting and software.
Most authors who look at writing as a business, and not a hobby have it all wrong. Sure you want to sell as many books as you can, but ONLY for the purpose of getting people to “bounceback” into your website(s). If I make money on my book, I consider it a bonus.
My PRIMARY purpose is to get people who buy the books to give me an email address in exchange for a digital bribe. I try and give people something significant enough to make them want to get back in touch with me.
Why so many books each year? The more chances to get people into my funnel. Different titles will appeal to different people, thus many different books.
Covers are really important whether your self publish or go through a traditional publisher. I suggest that in MOST cases, you self publish. That is if your goal is the maximization of revenue.
I use a great guy who does both my interior design (what’s between the covers) and the covers themselves. His name is Nick Zellinger (firstname.lastname@example.org). When you call him, tell him I sent you. He does a special package for people on my list. UNDER $1,000 for both your cover and interior. This is 70+% off the normal prices.
By the way, ebooks are fine, but you don’t really get any recognition in the press until you have a “real” book. A physical book.
Your Action Point
Write books. Lots of them. You’ll be perceived as an expert and be able to fill your funnel with lots of qualified leads to buy your other products and services.
Many years ago I had a conversation with a REALLY well known marketer. A guy who I respect in terms of their knowledge and writing ability but wouldn’t want to spend a minute of personal time with. You probably would know the name.
Anyway, we got into this discussion and I told him that every deal I wanted to do I was looking to find a way to make it a 50-50 split. He told me I was crazy. That many deals shouldn’t (in his opinion) work that way. At the time, I listened to what he said. I thought he might be right. NOW, I know better. He was DEAD wrong.
In any business (or personal) relationship where you don’t have a 50-50 stake, someone always feels like they’re getting screwed. Granted, even in a 50-50 deal some people might feel that way. In my opinion, much less frequently.
Here’s an example. Someone recently approached me on a deal. After we talked about it I asked him what he thought would be a FAIR split. He said something like 70-30 my way. I told him I disagreed. I’m sure he was thinking, oh crap, he probably wants 75% of the deal.
Instead I said: I think we need to find a way to make this a 50-50 split. He was floored. I found a way to do less than he expected I would and in exchange, I would take less of a cut. I LOVE these kinds of deals. Who keeps the books on these projects? Not me. I always leave that responsibility to the other party.
Do I ever get taken advantage of? I probably have been. But, as I always say, an ethical lapse on the part of one of my clients or partners is not MY responsibility . You won’t catch ME losing sleep over this fact. If someone doesn’t pay me, shame on me for having not selected the right partner carefully.
I love the line: 50% of something is better than 100% of nothing. How true! I LIVE by that law.
I’ll give up 50% all day long on something that doesn’t generate me any revenue right now. The other side of this is that recently I “gave up” a part of my seminar business to someone in exchange for them handling all of the administrative work and some of the “crap” I don’t like or enjoy dealing with. People who heard what I did thought I was nuts. Thought it was unfair. Unfair my butt! This allows me to spend time doing what I enjoy doing the most. Speaking and teaching.
As an additional insight, consider this. I’ve recently had to have people do work for me around the house. Many people would probably get some bids and then try and get people to drop their prices til they almost scream for mercy. Not me. If I think I’ve got the right person, I’ll overpay them to make sure that while they’re doing the job, they don’t feel ripped off. I know how I feel when that happens, and it AIN’T good.
Look for deals where you can do a 50-50. Underpaying people for the work they do will come back to bite you. Consider OVER paying people. That way they always feel they owe you! If someone has to owe someone something, I want to be on the receiving side of that deal. Think about it. You probably want to as well!
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