One of my strong personal values is transparency, so I want to carry that through into my business. In this post, I’m going to talk about coming up with my first product as well as why and how I’ve developed its pricing.
Why is pricing so challenging?
Pricing is one of the hardest and most important parts of marketing, and it often doesn’t get enough attention. People make pricing decisions based on their gut, not the market. It’s also possible to get completely paralysed by the idea of charging people too much. That’s more or less where I’ve been for the past couple of months, so I know first-hand how hard it can be!
I’ve also seen it with clients where they’re worried they don’t have enough advertising or sales experience to attract people to a new product, and then launch with a very low price. This is a bad idea – it’s better to have a small launch with a few people paying a high price than it is to attract a lot of very price-conscious users.
You want to get recommendations from people as part of your organic, word-of-mouth marketing strategy. But imagine if you check out an apartment, find out from the previous tenant that they’ve had a low rent, and when you want to sign the lease the price has shot up. You’re not going to be happy because it feels unfair.
You might pay the extra charge for an apartment due to all the other considerations that go into big choices like where you live. But when it comes to digital products or services, switching suppliers is a lot easier!
That’s not to say you should never raise your prices. Often it’s essential to do so. But there’s a smart way to do this, which is to collect information on your users and focus on creating a new pricing tier which has a lot more added value for the user. If your prices are just too low to cover your costs, you will need to raise them.
I’ve focused on setting competitive prices for my entry-level products, with room to expand into the high-end.
Finding a niche product – informative websites
For the past 4 years, I’ve worked at the European University Institute as an in-house designer for several research projects. My main employer was the Florence School of Regulation, who hired me to roll out an ambitious online course for energy regulators and help maintain and improve their websites.
The FSR exists to bring academic research, government policy and business together, so it has a very clear mission to reach out and engage people who don’t have access to academic journals, for instance. Promoting content was a challenge though.
Our audience was often hyper-specialised, and always busy. And our academic contributors were also very busy with research, funding applications and conference presentations. Finally, while there was a lot of enthusiasm for engaging with online media, there was not a lot of in-house expertise on actually selling or marketing things.
Marketing is just liquor and guessing
I knew pretty much nothing about email marketing, SEO or inbound marketing, the marketing mix or what the hell a funnel was when I started. I was a designer coming from a background that was very focused on print work.
To be honest, I’d always looked down on marketing as being 80% hype, buzzwords and bullshit. And there really is a lot of that type of marketing out there! But I dug into the subject and began to filter out the scam artists and quick-fix merchants, I found another approach, which is much more focused on understanding your audience and giving them valuable information.
Teaching is one of the best, most practical marketing strategies out there.
Learning to validate my audience
I also enrolled in an online business course myself, Ramit Sethi’s ‘Zero to Launch’ programme. This was a big investment, but it did help me gather together a lot of the thin slices of marketing and product development insight I’d built up and put them together into a complete framework. I learned a lot about audience validation and began to experiment with ways of getting better feedback from our audience.
Most of this centred on actually talking to people and trying to be more systematic about recording their feedback. This is something that people often get a bit weird about because they’re worried people will either (a) think they’re amateurs by asking for feedback or (b) start making unreasonable demands that they then somehow have to meet.
Neither is true so long as you’re responsive. Asking for feedback and then not responding is really bad, but you can be open about why you’re not going in a certain direction.
The big piece of validation I got from being in Ramit’s programme is that there are lots of subject-matter experts looking to set up consultation businesses, and scale those businesses by offering online training. In other words, these people could be my customers once they needed a designer to take their teaching business to the next level!
Is the market willing to pay?
Ramit recommends that people don’t spend money on anything other than their domain name and hosting plan, and maybe a premium theme when they start out. As someone who wants this business, I can still say this is good advice.
In order to get a return out of design work, you need to understand your audience and be able to share that information with your designer. Otherwise, you’re wasting money.
A good designer can help you hit the ground running by asking questions and studying how your audience uses whatever you’re producing so you can improve it. They’ll be faster and more objective than you at analysing your audience. But anyone can apply basic design standards to hit the bar of being good enough to launch and set up some sort of system to collect feedback from people, even if that’s just comments on a blog or asking for emails.
Hiring a professional designer is something that works best for people who’ve already built something and know it needs to be refined.
Some people don’t have any time or interest in technical stuff like building a website. They shouldn’t be blocked from getting online if they have a good idea, but at the same time, they shouldn’t be taken advantage of. If their idea sucks and will just cost them a lot of time or money without giving them whatever outcome they want, then people like me should tell them that and encourage them to do better.
I’m pretty confident there is a market here, but I still need to validate their willingness to pay. There are a couple of steps to this.
1. Creating free educational articles
First, there’s building an audience by creating valuable free content. I mean, if I’m selling my services as someone who can help build educational, informative websites, I kind of have to walk that walk myself. There are a couple of different strategies to creating content, so it’s mostly a question of experimenting and finding out what sticks. I do have two strong contenders though.
- Micro-learning content. This is really focused on doing one thing in very specific circumstances. If you’ve ever had to manually resolve driver issues on a computer, for instance, that’s a good example of where having really specific content is useful.
- Ultimate guides. This is content that gives a very thorough process to doing a big task, like everything you need to think about when planning and launching a website, or building an online course.
My aim here is to give people who have the time or resources to do small stuff in-house or by themselves everything they need to succeed. Some of them will become customers when they want to expand. It’s also a chance to educate people on what’s possible, and how someone like me can help them. Finally, it’s a chance to engage with people, get feedback and create content that answers specific questions.
Writing content is a challenge for me because I want it to be amazing, so I can be quite slow or procrastinate over subjects. I did keep a list of topics that I’ve dealt with in the past for previous employers, as well as fill out a Trello board of topic ideas to work on and develop.
2. Paid design consultancy
Secondly, there’s offering a consultation service. I broke this apart into three different types of consultation, based on what people need.
- A free 30-minute consultation for prospective clients. This is a chance for possible clients to get some personal insight from me on what their next step should be. These consultations are mostly going to focus on people’s audience/market, because most problems come from a mismatch here, and if you’re not getting this right, visual design work is just rearranging the deckchairs on the Titanic.
- $250 for a one-hour consultation. This is a lot more focused on specifics than the free consultation. I aim to go through the main goals of a client’s website and give specific advice on what to do to improve it. If they have good data on their audience’s behaviour, I’ll go through it, if not, I’ll tell them how to get it. The client will get a recording of the session, as well as a written brief on what’s been discussed that goes deeper into the technical aspects. After that, they can handle it in-house, contract it out, or hire me to actually implement stuff.
- Longer-term consulting. For a few clients, I’ll be able to offer more long-term direct assistance in setting up and managing more complex systems on an ad-hoc basis. This covers jobs like building up a complex e-learning website with grading and enrollment and special permissions, or automated email systems. Boring, technical nerd stuff most people won’t touch with a ten-foot pole but which can really have an impact. For these consulting jobs, I’ll negotiate a price on a project-by-project basis.
3. Website Design and Maintenance
Finally, I’m creating fixed-price products for creating personal web pages and maintaining websites.
Making this a fixed price product is better for me because I can have a standard workflow, create reusable components, and know exactly how many products I need to sell per month to pay myself. I can also hire staff to do the same thing, scaling the business to take on a lot of clients. Having a maintenance product in there gives recurring revenue, as well as hopefully letting me pick up more consultation work from those clients.
It’s also better for customers because I can focus on meeting specific needs and bundle them together into one relatively low-cost package. For instance, I can find a good hosting plan for my client and get them set up, offer a standard set of plugins that I know well and can recommend, and even apply lessons learned from one site’s performance to all the others. A maintenance pack fixes one of the big issues with websites – they often end up on the desk of someone who’s got other responsibilities, isn’t very technical, don’t get kept up to date, and they can even become insecure due to lack of updates.
Personal Website Design Packages
- $950 for a Personal Website package. I want to help people think really hard about the purpose of having a website and how they can use it to create something valuable that will actually attract an audience by helping them in some way. This entry-level tier is a good fit for someone who’s hoping to hit the ground running or who already has a small professional blog that they set up themselves but isn’t performing as well as they’d like. We’ll focus on your About page to make sure people know what to expect and get a good sense of what makes this person special. Also included are setting up a lot of technical details such as integrating a mailing list, making sure the site is optimised for speed and security, and setting up a good social sharing system. Finally, I’ll give advice on how to proactively look for an audience and promote your content.
- $2,500 for a Consultant Website package. A decent jump in pricing for more complex sites that need to include specific types of content, such as events and publications. This is still aimed at solo practitioners or small partnerships, but it’s for people who are more advanced and maybe have a more diverse audience. For instance, someone who works as an academic and wants to provide accessible content for the general public, high-level overviews and papers for policy makers, as well as teaching material for students. There’s more consultation on the audience, as well as using analytic software to measure their behaviour against defined goals, and we’ll review the site together after a month to fix any issues.
- $10,000+ for an Advanced Leader Website package. Well, this is mostly hypothetical, but there are advanced sites that take months to build, test and release. This option is here as a framing device – it shows I am willing to discuss and take on bigger custom design projects, but it’s expensive. Examples would include consulting on setting up a complicated e-learning platform or membership website with a lot of integrations into payment systems, etc.
Website Maintenance Packages
- $49 a month for Basic Maintenance. This is for people who just want to save a couple of hours of work managing their site’s settings and updates. It also includes hosting costs on a good shared server.
- $99 a month for Active Maintenance. Hate updating your site? This one’s for you. I’ll take care of any small updates you need, like posting a new blog article, replacing an image, etc. I want this to be generous, so there’s no limit on the number of requests you can make, but each one does have to be something that can be done in 15 minutes or less. You’ll also get a simple monthly report on your site’s visitors and how you’re doing at hitting your site’s goals.
- $259 for Awesome Maintenance. I haven’t really defined this product yet – I know I can offer a high-end hosting option for people who have more advanced needs and want to have someone working on optimising their site, but can’t afford to hire someone in-house yet.
No pricing plan survives contact with the customer
So that’s the business plan I’m pursuing at the moment, but things will inevitably change when I deal with clients. Some features that I think are important might be cut, others added in, etc.
The important message I want to give you if you slogged through all of this is that coming up with a perfect pricing plan is far less important than going out there and testing your market with a competitive price. Just don’t try to out-Amazon Amazon by charging a price that’s too low.
Until next time,