Download Episode 108 Transcript
There are many schools of thought when it comes to pricing.
Some creative entrepreneurs offer lower prices, while others prefer a premium pricing structure. What if you could do both?
Well you can by using a visual tool called a value pyramid.
In this episode, I’m spilling the beans about value pyramids. I’m sharing what a value pyramid is, the benefits of using one, and how it can help increase your business income.
If you have ever wondered, how to offer value to the various segments of your audience at different price points? Then this episode is definitely for you.
What is a value pyramid?
A value pyramid is a visual tool used to map out ways you can deliver increasing levels of value to your clients at a variety of different price points. As you move up the pyramid the value and price increases, while the number of clients you’d be servicing decreases.
In simpler terms: you start by offering something of value for free and then increase the price and value with your subsequent offers.
The benefits of having a value pyramid
There are plenty of benefits associated with using a value pyramid for your business.
Having a value pyramid helps you build trust with your audience over time.
A person who has just discovered your business isn’t likely to spend money with you while they are still getting to know you. Your value pyramid allows them to dip their toe in without a lot of commitment. They can consume your free content or try your lower priced offers first.
Your value pyramid allows you to work with clients at varying price points.
This gives you the ability to deepen your relationship with your clients by providing them the tools and resources that meet them where they’re at. This is important for price conscious clients.
Not everyone has the resources to make large investments right away. By using a value pyramid, your clients may invest in your lower priced offers while saving for a larger investment later on. This is a win-win.
Using a value pyramid enables you to maximize the lifetime value of each customer.
Most businesses think they need to get a constant stream of new clients into their business, but it is actually smarter to retain your current clients. Using your value pyramid can help you identify new ways to provide value to your existing clients. You’d upsell them into your next level offer which would increase their lifetime value. This means more money for your business.
While a value pyramid has many benefits, there are a few downsides to using them.
Having multiple offers can make your marketing feel complicated.
Your clients won’t automatically know the products and service you have available so it’s your job to educate them. This could mean there’s more work for you when planning marketing campaigns because you need to make sure you’re marketing all of your offers.
You may also feel like your attention is being pulled in many directions.
You could be running a group coaching program and working with one-to-one clients at the same time. You’ll need to consider your expected workload and bandwidth for delivering an awesome client experience when planning your offers.
Value Pyramid Tiers
Tier 1 – Tell You What To Do
If you’re telling your clients what to do the price can range from $0 – $50.
This tier may include anything from blog posts to affordable resources like workbooks, worksheets, checklists or toolkits. Paid resources are simple automated delivery products that require little to no direct interaction with you.
Tier 2 – Teach You How To Do It
If you’re teaching your client how to do something the price can range from $50 – $500.
This tier may include workshops, memberships, self paced courses, or training videos. You may have direct interaction with your clients but it’s usually limited to live events or calls.
Tier 3 – Done With You
If you’re doing the work with your client the price can range from $500 – $2,500.
This tier may include coaching (Group or One-on-one), consulting calls, training programs, and teaching. You are more hands on with the client providing a greater level of direction or instruction.
Tier 4 – Done For You
If you’re doing the work for your client the price range starts at $2,500+.
At this tier you are providing an actual service. You have a high level of involvement in the project, so the number of clients that you can service at is limited.
As you can see, the more access a client has to you and your time, the higher the cost. I also want to point out that as you move up the pyramid the amount
A value pyramid example
This probably sounds pretty magical and you’re already running through ideas for how to implement a value pyramid in your own business. Let me show you an example from my own business:
To help potential clients discover my business, I offer free resources in the form of a podcast and social media updates. This leads them to my free Brilliant Idea Guide or my Digital Product Quiz which they can opt in to and be subscribed to my email list.
As a next level offer, I could host a Create a Tiny Product In A Weekend Workshop. This could include 3-days of live video instruction, a workbook and Q&A. Then, I could repurpose that content into an evergreen workshop for people who missed the live version.
For clients who are looking for something more robust, I could invite them to join me in the Brilliant Product Roadmap Course w/ group coaching. These clients would have access to a full curriculum along with coaching calls, opportunities for direct feedback from me and other bonuses.
Finally for the client who understands the benefits of having a digital product but doesn’t have the time to create one, I could offer them my done for you digital product creation service. This client would receive strategy calls to discuss their product idea, a product delivery timeline, and complete product creation.
At every tier, I’m able to offer value to meet my clients where they are right now. So whether they have the budget to make a large investment or they are more budget conscious I’m able to help them.
Just a reminder: It’s ok if you don’t have an offer for each tier right now. You can build out your offers to fit your value pyramid over time.
A value pyramid is a powerful way to increase your income while being able to service clients at various price points. It allows you to diversify your income while being mindful of clients who aren’t ready to make large investments.
Talk to me in the comments, what are your thoughts on value pyramids? Have you already built one for your offers? If not, are you considering creating one?