The Hidden Psychology Behind "What Do You Charge?" with David Abbott - 334

Hello, you're listening to and watching Sarah Archer, an episode three hundred and thirty four of the speaking club podcast

And I'd like to open this show with a quote from the wonderful speaker and sales guru Zieg Ziegler

People don't buy for logical reasons. They buy for emotional reasons

I started this podcast for two reasons because I want to help people recognize the power of stories and humor and speaking

And because I believe it's your message that counts, not the number of uns and ours you use

There are some organisations that want to create robot speakers

They want you to sacrifice your personality in order to speak perfectly

I want to let you know that you can be yourself and a sensational speaker

So, if you want to be a speaker that connects and engages authentically through stories

A speaker that gives value as well as a great performance, then welcome home

If you've ever found yourself lowering your speaking fee or hesitating when someone asks you

What do you charge? Or wondering whether you're actually charging what you're worth

Then this episode is going to be a doozy for you

Because pricing isn't just about numbers

It's about confidence, positioning

And also how clearly you can articulate the value that you bring

And my guest today, David Abbott, is someone who spent years helping businesses and speakers get this right

He's a pricing expert, he is a professional speaker

And he's the creator of the brilliantly named platypus pricing process

Which we will definitely be getting into

And in this conversation we are going to be exploring why most pricing problems are actually communication problems

The psychology behind what people are really buying

And how speakers can stop undercharging without feeling like they're pushing or overpricing themselves

So, if you want to be better at charging what you're worth and getting paid for the value that you create

You'll want to listen to this one

Without further ado, let's dive in

Welcome to the speaking club, David Abbott

Thanks for your advice, lovely to be with you and how are everybody out there?

It's great to have you on the show

I was fortunate enough to see you in action live just a week ago

So, I already know the answers to some of the questions that I'm going to ask you

But I'm excited for the audience to get those golden nuggets that I got last week

So, let's get cracking

First question I wanted to ask you, David, is how did you shift from being an engineer to becoming a pricing specialist?

It must have been a long journey, doesn't it? There's a bit of a gap in between the two

I really enjoyed being an engineer

It's great, if you're interested in that kind of thing, I was in the electronics design engineer

It's like being a crossword enthusiast and you paid to do crosswords all day, it's fab

But there are a couple of things, as I progress through my career, there are a couple of issues

One is, it's fantastic being an engineer, managing engineers is a pain in the backside

But the other thing is, I've received a specification, something that somebody wanted

In the days when I was designing integrated circuits, you had to be a specter in the integrated circuit

So I go away, I design the thing, get it manufactured

At the end of it, you've got this black thing with legs on it

And that goes into a product and it goes out into the marketplace

So the somebody out there figuring out what the trends in the marketplace are, what customers really need

What problems could be solved and come up with ideas

And then from that, we're approaching me with that spec, I do my bit in the middle

Then they go off and they learn shit and they promote it and they decide on the price for it

They do, all the rest of it, there's a whole great big commercial process

And I'm responsible for one little slice in the middle

And I was just interested in the broader picture

So I made a move from product design into product marketing

Which is very much around the trend forecasting and what are the appropriate technologies to use

And then from that into marketing communications, then does a marketing qualification

Then senior roles in marketing and pricing is one of the elements of marketing

People used to talk about the four P's of marketing, it's seven these days

And the four P's, the classical ones were product price, place and promotion

And you can find books galore on product, place and promotion

Not many on price, so it seemed like there was a bit of a gap and here I am

You filled that gap

Now you've developed what you call the platypus pricing process

Yes

How did that quirky name come about?

And what's the big idea behind it?

I would love to say with it stands for something

P's for profit and L's for, I don't know, whatever

Nothing like as clever as that

When I first developed the content and started speaking about it

It was just called the psychology of pricing

And there's a huge amount of detail that goes into a pricing process

There's all sorts of different stages

Warm bit of it is, how do we communicate a price effectively?

And that's the psychology bit

That's the interesting bit that audiences like to listen to

Because we're all very quirky and it's a lot of fun

Finding out just how weird we are

But the psychology of pricing is a little bit boring

And when I first joined the PSA

We had a number of conversations around this

But with people within the region that I was part of

And the mastermind group that I went along to

And I remember people talking about it at other speakers

There's some people written the book

Why nobody ever washes a rental car

And I've never read the book

But I may have got a word or two wrong in the title

But it's going to be close, it's memorable

And it kind of sells something as well

You can see why nobody washes a rental car

They don't own it, you know

You can kind of guess what the message might be behind it

And I was just trying to find something that had that kind of

Sticky, memorable kind of name

And it was literally in the meeting

I was just talking about things

And the bit of illiteration just suddenly came out of nowhere

How to price your, we were talking about the whole bunch of things

And the platypus was just suddenly there

So there's no much silence behind it

There's no clever acronym or anything like that

Since then, so what was that?

I don't

2012, something like that

Since then, I've had occasionally a little bit of pushback

From an audience where they'll say, you know, great topic

And all the rest of it

But you know, it's a serious subject is pricing

And the platypus is a little bit white-hearted

You know, you could drop that

No possible way

Because the number of people that have got in touch with me

And said, I heard you five years ago

They couldn't remember your name

But on Google Platypus and pricing, and there you were

You know, the beauty of something like that is

It is sticky, it's memorable

I mean, become known as the platypus pricing guy or whatever

But it's a fantastic handle

So it's staying

Yeah, no, it's brilliant

And I think having seen it in action

The concept of a platypus, you know, the awkwardness of this

The sort of one-offness of it

It really works well with the theme of your talk

And your sort of idea behind everything

One thing that I just wanted to just go back on

In terms of your engineering background

You know, and there's a process

Some of that, do you find that having had that background

It means that you're approaching this subject

From a slightly different angle

Or have you sort of really discarded that engineering stuff?

Well, it's a fundamental part of me

And you gather in Tangle Cause and Effect, you know

I don't think it's an engineering

It's something that made me what I

The kind of person I am that's highly driven by data

And you know, in the colour profiles

I'm a very high blue

The reason I went into engineering in the first place

Will it be because of your huge affinity for numbers signs

Three maths A levels, you know

That's the kind of person that I am

So I like data, I like research

When I am presenting, you saw this on the slides

If there's some academic research

The Baxter, the particular concept that I'm talking about

So I'll quote the research

You know, if you're supposed to go and read it

Dolly Boots, you know

Cause I find all of this incredibly interesting

So it's just

We'll have fundamental characteristics don't we

And that's just part of me

I like numbers data and evidence

Excellent, and I mean the interesting thing though

You know, you've got that affinity for numbers

Most people will think that pricing is all about numbers and data

But actually, it's the antithesis of that

It's more about psychology

So why do you think it is that emotion is more powerful than logic

When it comes to price and buying decisions

Emotions more powerful than logic in almost every single thing that we do

You hear people

I'm going to butcher the saying

But there's something along the lines of

You can't argue somebody into a position using logic

Whatever their current position is

They didn't arrive at using logic

Almost nobody arrives at their existing positions

About the world or the positions about

You know, a particular thing that's in the media or whatever

Because of logic

You know, they arrive at them because of a whole bunch of things

It's all of your experiences up until that point

All of the stories that you've told yourself in experience

All of the stories around

The particular thing that you're listening to right now

How those stories are delivered

We're storytelling animals

And it's stories that communicate points

So when I do talk about the platypus

Although I'm a numbers guy and I do like the research

As you saw

I don't say right

Here is this paper

If you look at chart number four

I'll take

Look at the data trends

There's none of that

We tell some stories around pricing

I'll tell some stories about organizations I've worked with

Or things that I've seen out in the marketplace

Whatever they are

They bring the thing to life

And that's how we connect with each other

It's through those stories, isn't it?

So it's the only way

You know, professional speakers tend to be professional storytellers

And that's something that you know something about as well

I mean, if we ever doubted

The fact that we're driven more by emotion than logic

We only need to see what's happening in the wider world

To see that played out

Unfortunately

But anyway, we're leaving that aside

But to do that, there's definitely something on display right now

One of the things that you've said

And it came across in your talk

Is that most pricing problems

Are really value communication problems

I wonder if you could elaborate on that

What you mean by it

And also how people can start fixing that

Over the past four, there are 10-12 years

I've been speaking to a lot of CEO groups

And if people are familiar with what a CEO group is

The biggest in the UK is something called Vistage

And a CEO group, there's a 12 to 14, 16 Founders, MD, CEOs of an organisation

They meet once a month, business speaker in the morning

And in the afternoon, if there's an issue at work, they bring it to the table

And they get the help over the else

We're not talking to a CEO group

I have a look at all of the websites for all of the members there

Because I create bespoke examples of the content that I'm going to deliver

To bring it to life

And I've spoken to around about, well, typically about 20 years

So if you do 12 years, time of 20, a year, time of 15 in a group

I'm not going to try and do that now

Because he's in the thousands, that's how many websites I've looked at

To create those bespoke examples

And I would say that 95% of those websites talk about

How long we've been in business when we were founded

The awards that we've won, the things that we do, the incredible machinery that we've got

We've got five access, something or others that allows you to do this, that's all the other

Very few websites talk about the outcome that you're going to get when you work with us

A value that we are going to deliver

And that's the key thing that every single customer, clients, whatever you're to call them, is looking for

They don't really care about how you're going to do something

They care about the difference it's going to make to them

And most organizations could do a better job of defending the price that they go to market with

Or actually increasing their price if they clearly communicate the value

Remember things that I say every single time to every single audience says

It's not the customer job to work out for themselves

What value they're going to get from you

It's your job to clearly communicate that value

And given that the vast majority of websites that I look at don't do a good job of doing that

If you do a good job, you will stand out

And I know I'm talking about websites and focusing on that because that's the public facing

Bit of the organization that I can actually look at

But at any time I've worked with the client, the rest of their marketing materials

Tends to be very similar, you know, their pitch decks, their brochures, whatever it is that they send out

Even I did some work with a distributor

I'm not going to say what the product was because they're the largest in their field

And if I'd named the product it would be instantly obvious who it was

But I spoke to the senior sales team before I actually did the same session that you've seen

The platypus pricing

And I asked them, why did people buy from you when they said, well, you know, we've got the biggest range in the marketplace

We carry all this to everything next stock

We've got fantastic processes so we can deliver it the next day

It's really high quality stuff, we back it up with fantastic technical support, we do this

You know, we've got a big list, they didn't mention price

And then I got hold of their marketing materials

And every single thing was lowest price, sale, from

You know, all of the marketing materials was about, we're cheaper than somebody else

And none of the communication was about, this is just how good we are to justify the price that we want to charge in the marketplace

And that's not an uncommon gap

So, you know, I really do focus on value, it's simply because in my experience,

70 companies are really, really poor

And understanding what value means for the customer and then communicating the way in which they're going to deliver that value

That's really interesting, I think what's coming to my mind is that

It feels now in the current sort of economic business climate

With all the uncertainty that people are facing in all different aspects of, you know, life at the moment

That there is a hesitancy in making some decision, some buying decisions

And that can result in the temptation to look at making things cheaper, more affordable

So that it becomes easier, cycle even think that it will be easier for people to make a decision

If the price is cheaper, given everything that's going on at the moment

How would you say that's true or would you argue against that and focus back on value?

There are elements of truth in it, obviously

And in some particular markets, it's more true than others

So for example, in every corporate role that I've ever been in

If there's ever a downturn in the market and the company feels it needs to tighten its belt

All training courses stop

And the marketing budget suddenly gets smaller

Because they feel like their discretionary spends, you know, within an organisation

So it is the case that industries face tough times

Depending on what's going on in the world and what's happening in your marketplace

And what the competition is doing and a whole bunch of different factors

The issue that I have is that for most organisations, the one tool that they think they've got in their toolbox is price

So if things ever start to get a little bit difficult, right?

Well, we need to start dropping our prices, you know, undercut everybody else

We'll protect our market share or we'll protect our revenue while the market is actually declining or whatever it might be

But they're ignoring that everybody else in the marketplace is looking at them and thinking along the same lines

And you're rapidly getting into that race to the bottom

And I would rather try and find ways to focus on the brand and the brand what the brand means for the customers

So I'll come back to the brand just in a moment

Now this is more of a marketing issue

But really focus on communicating the value

If you can justify the price that you want to charge, then let everybody else go down

It's not true there, so all customers always go for the cheapest price in the marketplace

You only have to think of our own buying habits

How many people own an Apple iPhone?

There are cheaper phones in the market that do everything that an iPhone does

Even if you're bought into the whole Apple ecosystem and they all talk to each other

I had an iPhone for many years while I was still on Windows PCs and didn't have an iPad

And it was the only Apple product I had, I still had an iPhone

There were lots of people like that

But there's something about the value, the ease of use, the box it came in

You think, if you've got an iPhone, I remember there was a thrall down my spine

When I got the phone home and I picked up the lid of the box, the whole box came with me

And then the bottom, slow, I think I did the box three or four times before I took the phone out

You know, the much more complicated we think that every customer out there is a really simple decision-maker machine

If you meet the spec then whatever the lowest price is, that's always going to get the business

And then we personally, we make much more complicated and sophisticated decisions

The thing about brand was, join COVID

A lot of companies stopped spending money in response marketing

Where paper clicked, that kind of stuff

For whatever, perhaps, if you're selling online, that's fine

You can still go through the year, the post

But if you're trying to drive for people to a physical location and they're not allowed in the shop anymore

Then you can save all of that money or you can spend some of your marketing money on other things

There are quite a few analyses after COVID, you're to after COVID, to look at

Or that happened during those years

And it looked like those companies who invested in their brand

So in building the brand perception, the understanding of the brand, the value of the brand in the marketplace

That not only drove sales during the period in around about the same levels as the response marketing used to do

But it actually built market share coming out of COVID

And it's just illustrating that we want the comfort

There are a lot of psychological things going on

So if you buy something with a brand on it that you know and trust

There's an element of less risk or an element of self-esteem

Or from a person's perspective, nobody ever got fired for buying IBM

There's an element of things that's tough

I could save a little bit of money

And if the production line stops because of my decision

I'll lose a bucket load of money trying to get the damn thing going again

My job's on the line

Or I could go back to the premium supply that I've used all of these years

And know for absolute certainty that that line is not going to break down

And everything's going to be absolutely fine

And a price actually communicates something about what to expect

So if you do have a quality product and you push the price down

You're actually communicating that maybe it's not such a good quality after all

Interesting

Actually, me just reminding me

There's a client that I did some work with

This is an electrical wholesaler

And they had grown from £10 million turnover

Making £1 million profit to £20 million turnover

Making £200,000 profit

So they've gone from 10% operating profit to 1% operating profit

And it was because they got discount happy

They were chasing growth

And the only tool that they had in the toolbox was

Will drop our price

If we've got the lowest price, we'll get the sales

Well, they've got the sales

But it has a vastly reduced profit

So they've put people making a movement pounds

And now they're making £200,000

In what way is that success?

Yeah

And they're probably having to work harder to get more sales

The price is hard

They've gone from £10 million to £20 million

The record price is hard for less money

In what universe does that make any sense?

No, that's really interesting

And I think that whole...

I mean, we're back to the psychology again

Like status drives so many buying decisions

In a resource of different ways

And whether you're trying to protect your status

Or flaunt your status or whatever it is

You're absolutely right, that's so interesting

Okay, so four-setting prices then

You know, you talk about the platypus

In terms of setting prices, most businesses

Still priced based on cost or competitor benchmarking

And you're talking about value

You know, what is the smarter way for them to approach pricing?

There are...

We're getting into the technical side of pricing now

And quite away from the psychology behind this

But there are a number of tools that you can use

In certain circumstances

It's possible to figure out what value you are delivering

And then there's also sort of research

That suggests that people are

In general prepared to pay somewhere between 5% to 20%

Of the value that they receive

So if you're doing something

It's going to create 100,000 pounds worth of value for somebody

Then a fear between 5% to 20%

Somewhere in that range

That's quite a big range, but I'll come back to some of the tools

But there's a...

In theory, if you're going to generate 100,000 pounds for them

And if you charge 90,000 pounds

They're still getting 10,000 pounds extra in theory

If they're purely logical, they'd still be happy with that

In reality, where they think that you're taking the Mickey end

And they draw that they rather not do it at all

They give you 90,000 pounds and they only get...

You know, all sorts of human factors are coming to play

But so between 5% to 20% feels further people

So that's one aspect, you know, trying to understand

From a monetary point of view

And money isn't the only way that we compute value

Value mean many things to us, but money is just one of them

Do is, there are a whole bunch of tools that you can use

Things like Gabor Granger or Becket de Groot, Mars Shackle

There are tools that you can use to establish people's willingness to pay

And I'm not going to go into the detail of them

There are Wikipedia pages and all of them

There are willingness to pay tools in the marketplace that you could employ

And that then involves a little bit of research

And just asking people what there would be prepared to pay in certain circumstances

And then thirdly, there is a tool that I use with pretty well every single client

Which is a comparative value tool

So this tries to figure out how do people perceive your value versus your competition's value

And then you can plot that on a horizontal axis

Where you've got 100% is you can do everything that particular customer client can possibly imagine perfectly

So there are tools that allow you to compute the value

So you work out as a percentage of that

The maximum possible value that you can deliver

Where might you be and where might the competition be

And then if you've got some idea of the fee you charge versus the fee that they charge

Then you can do a scatter plot

You can see and you can see what we use, sit relative to everybody else

Not just in terms of there's a range of prices out in the marketplace

Which is what you said

You can see right, most organizations is either cost plus

Add all of our cost together stick and margin on

Or we'll just have a look and see what are the prices in the marketplace

And it feels like we're at the premium end so we'll price towards the top

Or it feels like we've got some cost efficiency so we'll price towards the bottom

By doing the scatter chart you can see exactly where you've fit compared to over the else

And then you can make a specific decision as well

I'm actually delivering quite a lot of value

I'm going to deliberately price up here

And it might be higher than anybody else's price in the marketplace

But I think I'm delivering more value than anybody else in the market

So you get that picture and it's a better way of making a pricing decision

Than just either finger in the air

Or let's just copy whatever they're also doing

Simply somewhere in the midst of time work this out perfectly

And since then we've all been copying each other

So somebody wants upon the time they got it right

No, they didn't

30 years ago and somebody invented this process

What I've really did

We're all full of somebody did that

And since then everybody's just been copying this

It's really interesting

The next thing that I want to get on to is some of maybe the strategic things

Like talk about making prices stick here

Can you say what you mean by that

And how you can increase the chances of people saying this without discounting

And thus very much comes into the psychology behind

How we make a pricing decision

And by that I mean the client

How does the client decide?

Yeah, that's a fair price to pay

I'm happy to pay that price or whatever

So there are a number of things that we can do

One is presenting more than one price

If we only present one price to somebody

Then the only option that they've got is to compare that with

Anything they bought in the past

Or alternatives that they can buy from other people

Or other things that they could spend the money on

Or if you present three options

Then subconsciously

It feels more like they're in control

They've got some choice

Now they can choose between these three

And they think less about

The other options out there

And I do not want anybody to think

That's okay, that's your product

And we're going to find a way to take some cost out

And take some cost out

We'll create three options that way

It's by adding value and adding value

So you've got a good

Can you find a better and a best?

That's one way of doing it

Another way is something called a pricing anchor

And the pricing anchor is just where

Planting a number in somebody's head

That means that any numbers after that feel more reasonable

And the simplest way of doing that

Is if you've got three prices

Start with the highest price first

And if you want to see this in action

Watch the celebrity strictly

Not strictly a bake off

And the celebrity one

It's a charity thing

So it's stand up for cancer

And they'll do a bake

And they all walk out into the garden

And they're going to break for the ads

And they come back from the ads

The judges are going to have a look at the bakes

And something might get the handshake

But immediately before the ads

There's a little piece to camera

Where they talk about somebody and their family

And having cancer and the importance of giving

And then was the donation page

And the donation page reads

To donate

40 pounds, 30 pounds, 20 pounds, 10

Text, 40, 30, 20, 10

And it's in that order

Because when you hear 41

That becomes the reference

Against which everything else then gets compared

Or 40 is quite a lot

Oh, 30 is not too bad

Oh yeah, couple of 30

If you started 20, 30, 40

10, 20, 30, 40

Then people anchor on the 10

Oh yeah, I could afford a bit more than that

I'll do 20

So the first number of the people in Canada

Becomes that reference point

That's internal reference

Against which everything else then gets compared

And a third tip would be

To make your numbers slightly precise

So there are a lot of people who

I don't know

Let's say you provide a service

A law firm

Let's say you're a law firm

You've had a look at this

Somebody wants to have a look at their

Their terms of conditions

Yeah, they're getting into a new lease for something

And you're going to go through all of this

And you know how long it's going to take roughly

Because you've done it many times before

So what your hourly rate is

And the lower hourly rates

10 to be

454, 75, 500

Yeah, they tend to go in 25 pound multiples

So you think, well, I charge 500 pounds there

And now I think this is about 10 hours worth of work

Okay, there's 5,000 pounds

But 5,000 pounds

That really does sound like

You've just done the finger in the ear thing

It sounds

You're inviting people

To get into a negotiation with you

If instead your hourly rate was

513

And it wasn't 10 hours

You actually look at it well

It's going to be close to 10, but I actually

I think it's going to be more like 10 and a half

Or 11 or whatever

You multiply more precise numbers together

And you quote the precise number

Then it feels like there's some signs behind it

And in the example I've just quoted

The genuine lease a bit more signs behind it

But it feels like there's more signs behind it

And the customer is less likely to negotiate

Yeah

That's one aspect where there's a negotiation element

But even when it's just a price on a page

And you either pay it or you don't

There are a few psychological things going on there

The 99 Pents thing

That's called Charm Pricing

So if you knock a penny off

And it changes the first digit

So you go 10 pounds, you knock a penny off

And it becomes 9.99

Or better still 20 pounds, you knock a penny off

And it becomes 99

The first digit you change it from a 2 to a 1

It feels like it's less expensive

Because mentally we put it in the 20's book

It's on the 10's book

There's only a penny difference

But it feels like there's a bigger difference

That's one factor

But the whole precision thing

If it's not 20 pounds, if it's 21 pounds 32

Again, it feels like there's a reason

But be

Again, there's a chunk of psychological research around this

Precise numbers just feels smaller to our brains than round numbers do

So it's entirely possible that if you did exercise

It would different people to try and get them to estimate

Or describe the size of 21 pound 32

Versus other people describing the size of 20

It's highly likely that the people describing the 21 pound 32

Will describe it as a smaller number than the 20

Because to our brains precise numbers just feel smaller

And there's three tips there that should be able to help anybody with their pricing

Through options start with the highest price first

And try and make your prices precise

Really simple stuff

Yeah, excellent

That's brilliant

Thank you for sharing those

Those are really, really cool

Now, I wanted to turn to speaking edit more now

Now you are a speaker

And I wondered in your own speaking journey

How did you decide on your fee

And what was the biggest mistake that you made early on?

One thing I'm not

Is I'm not a walking encyclopedia of prices

The number of people that come up to me is like

I've got this problem

I'm launching this new service

What price are the charger?

I have the clout

I've got a whole lot of ways in which we can figure out whether I price should be

But I'm not walking around with every possible price in the universe stuck in my head

As a consequence, the same challenges that other people have when I first started

Plus when you're yet to be well established

When you don't have the testimonials, you don't have a speaker show where the people can look at

It's evident that you don't have the same pedigree that other people might have

It's difficult to charge quite as much

You can't just decide right

I'm going to be a professional speaker

And then tomorrow I'm charging £10,000 for a keynote

It doesn't work like that

So I did some work

I tried to find out what was going on in the marketplace

I looked at the value that I was delivering

And based on that came up with some early prices

Which I backed off a little bit on because of confidence

Humans as anybody else

And because I was yet to be established

But what I've been doing consistently is

Testing higher prices, pushing higher prices, trying different things

And the fees that I'm charging now are very, very different to where I started

So my advice would be to anybody setting out as a speaker

Or anybody in the similar circumstances where you're providing a service of some kind

OK, be tentative at the beginning

Unless, unless you are signing up people for life

Because you won't even agree the price is very hard to come back and change it

But assuming that it's per gig old, per activity, whatever it is

You might start off a little bit tentative, but keep testing

Do not stop testing higher prices, keep trying a higher price all the time

And eventually you should reach a point where you are losing opportunities

And it's clear that you are losing them because of price

There was a client that was in one of my audiences

This is one of the CEO groups

And the chair just asked a whole question

He asked everybody, when was the last time you increased your prices and how much buy

And there are a couple of people that did this every year in the followed inflation

There were a couple of people handed in for three or four years

They looked a little bit sheepish about it

They got to one person, they were a firm of architects

And the guy said, well, I think it on average is probably about every nine months

And what do you mean, roughly on average, in why nine months?

So we measure our win loss ratio

And if we start to win to more opportunities, then the limit that we've set our prices go up

So we aim to lose a third of the opportunities that come in to the business

Now, the 70% that we win, that keeps it completely busy

And if we start, if it starts to go too much, if the work is coming in

Now, what we don't want to do is go and recruit another person and then recruit another person

And suddenly there's a downturn and then what we do is we just put our prices up

And bring the demand back down to an acceptable level

That's brilliant, absolutely fantastic

So they're monitoring that key metric and continuously pushing their prices

God, that's really interesting

That's really clever actually, it's good

And I think that's probably people don't pay enough attention to those numbers to be able to do that

I just, quick anecdote, I know there was some of the, suddenly she's not with us now

But the Sunday in the speaking industry, this is 10 years ago, I think

To tell me, the cheid tripled her prices over nice

The number of inquiries didn't go down but they didn't go down to a third

Or the number of actual engagements

They didn't go down to a third of what they previously been

So she ended up working less hard and at the same time making more money

But what most organise, if you go back to what we're saying earlier about discounting in order to win value

Do you really want to work harder to make less or less?

Who would do less work and make more?

I think it's a pretty easy decision

Yeah, absolutely, absolutely

Now I'm going to put you on the spot here

Okay

And it'd be interesting to get your take on it

Now you and I were in the same meeting last week

When this came up, where a speaker had been booked by a company

And the company told her that she was half the price

Then all of the other speakers who had been put forward for the gig

And all of the other speakers were men

And so she fed this and they said we wanted to book you not because of your price

But because of the value that you are going to deliver to our audience

And we wanted to let you know

So she fed that back to the booker, the agency booker who was also a woman

And the agency booker said to her

I can't increase your prices in parity because it will price you out of the market

Have you got any tips or a view on that?

It's really, I know it's a thorny question

But I just wanted to get your take on that

There were a few things there that I'd like to know a little bit more

So what was the Bureau saying?

I can't increase your price as a female speaker

Compared to the male speakers

Because if that was the message and that wasn't said on the day

It wasn't

That was the message

This close to international woman's day as well

I would have a really big issue with that

Because it shouldn't matter, it shouldn't matter anything about who or whatever

It's the value that you're delivering to the audience

That's what we should be paid for

Now it's a simple as theirs

I would end up shopping around for a different Bureau I think to work with

Certainly I'd go back to the company

And try and find a bit more information on the other people who had quoted

And what else they've been quoted in the past

Because it would be this in the first time they've held a conference or whatever it was

Because it may be that the speaker Bureau's perception of what the market price was is incorrect

Or it might even be that this particular company, they're in a specific market sector

Where they do expect to pay more

And the speaker Bureau person, they're right about the market in general

But they're wrong about this particular industry

And she needs to update her data for the future

So there's no single answer

There's no light to understand more before

I would certainly, I would be tempted to go back to that the speaker booker and say

I understand, okay, you don't want to double more prices

But let's pick another thousand on right now

Let's see how that goes

Exactly, I did, as I said, I put you on the spot

But I think there's some really interesting questions that you've raised in terms of context around this

But yes, good, okay

Another speaking question, one that's come up with my clients

And I have a view on this, but I wanted to check in with you as you are the expert

In terms of online versus in-person gigs

There has been a tendency for speakers to discount online gigs versus in-person

Have you got a view on whether that is right or wrong?

I don't think there's an absolute answer to that or right or wrong

I know what I think about it, which is

You're paying me for the value that's going to be delivered

So if I'm running a session

If I'm running a keynote and I'm delivering it 45 minutes online versus 45 minutes on the stage

I'm going to charge the same because you get in the same value either way

If it's in-person, I'm foregoing some of my time

Because there's travel time involved

But you're going to pay me for the travel in the hotel

So in-person actually costs me more to deliver

I ought to be charging more and I guess that's the control or for virtual you charge less

Because you don't have that travel time you can fit more in

But that's starting to say that what we're really charging for is our time

One of the things that I point out is there are three fundamental things that we tend to sell

One is our inputs

So if lawyers are charged, you know, if you're 200 pounds an hour and something's two hours, then it's 400 quid

If it's three hours, it's 600 quid

You know, all you're charging for is your time

And in a way, by saying that it will be less for virtual because it doesn't have all the travelling

And that kind of stuff

We're basically saying it's not the value that we're going to deliver, it's the time involved

So companies, they are the charge for their inputs, which is typically time

Or it's their materials, cost plus charge, pricing is just charging for inputs

Or you charge for your outputs

And basically say that what I deliver is the same as anybody else

It's almost fungible, there's a market price

And it doesn't matter who you go to within the market, market price

You're going to get the same value you pay the same price

I'm much more focused on the whole value conversation that we've already had

What are the outcomes that you're going to get?

How are things going to be different and better for you as a consequence of the work that we do together

Generally, what value am I going to deliver?

And that's what I think we should be paid for

And if I'm being paid for the value, then I don't care whether it's online, via say-ons

However, we could do it using a Ouija board, I don't care

It's the same price

If you could do that, are you being in a fortune?

Excellent, thanks David

I'm going to be the first speaker who comes back from the dead

And they're free, it's completely unchecked

I love that, I love that

Okay, so penultimate question before we get into the standard ones

Let's say a speaker does want to raise their fees

And maybe we've covered this and repositioned their brand

What would you advise them to do to make that work?

I don't want to destroy anybody's business

One is out there, for example, and they're charging a thousand pounds for a genuine conference keynote

In the UK, that would be the very, very, very cheap end of it

That would be communicating

I don't think I'm very good, maybe take a chance on me

I'm not going to say to the person like that

You need to be five thousand pounds, that's the average

We'll apply by five over night

Because the danger then is

Particularly if you're starting out

You came for any work to come in, you know, you don't lose it all

I would say continually push your prices

So each time a new opportunity comes in, stick another ten percent on

Because ten percent compounds quite quickly

So if over the next year or so

Or eighteen months, there are ten opportunities

And every time you increase by ten percent, ten percent, ten percent

I've got the calculator with me

But you've gone from a thousand to multiples of thousands

Quite quickly

So do it in a testable methodology

Where you're not betting the whole of your business

No, I'm five thousand pounds now

I'm sitting here waiting for the work to come in

That was not raining

I don't want to do that to anybody

And it's exactly what I've done

I didn't spend a year or two at a lower price

I think, right, okay, I've nailed it now

I've now got a book, I've now got a show reel

I know I can deliver it, okay, right

I'm going to go from this price to that price tomorrow

No, I went up to there and then up to there

I have had some, a few years ago, I did a 40 percent price increase over nice

Because I think this is working

It's taking a long time

Honestly, yeah, looking at where I am now

I don't think I'm increasing my prices fast enough

Right, catch up, 40 percent

And everything, there was a little bit of a dip

And then it all came back

So the busiest I was

Two or three years ago

But charging 40 percent more

Yeah, interesting

Although using your own logic

Perhaps it should have been 41.24

Just, just...

That has occurred to me as well

And the reason I didn't do that is because all of my prices were already precise

And if the 40 percent had meant that any price ended up in a five or a zero

After I had applied the increase

I'd have just added another pound on

So it is out of 30 percent or is 40 percent plus one pound

I love it

So to wrap things up before we go into the standard questions

If our listeners only took away one pricing principle from this conversation

What do you think it should be and why?

There's a fundamental one, as I said earlier

It's not the customer's job to work out what value they're going to get from you

It's your job to clearly communicate that value

And to give them a little bit more flesh around this

When I'm working with a client, the way that I approach that is this

There's a guy called Peter Drucker wrote a paper called Marketing Myopia

And in it, you know, he said nobody wants to buy a quarter inch drill bit

What they want is a quarter inch hole in the wall

But nobody really wants a quarter inch hole

He was making the distinction between features and benefits

But nobody wants a quarter inch hole in the wall

What they want is a quarter inch fixing

Nobody really wants that what they want is a picture hook or a shelf

But nobody really wants that what they want is to make the room beautiful

Or to improve the space utilization in the room

So a methodology to try and figure out what value you are genuinely delivering

Is to try and think through what are the criteria that somebody is going to choose

My product, my service, my work, whatever it is

What are the criteria that are in the head that they're going to use to decide between me

And an alternative solution

So if it's a speaker for a conference, you know, it might be your reputation in the marketplace

The responsiveness, how quickly you get back to them

The social media presence so that you can promote the event

Yeah, there might be a list of criteria

But that's just a how, that's just the features

So for each one of those, keep asking me

Or why do they care about that?

Or why do they care about that?

Keep asking that until you reach something that you think

Ah, that's the real fundamental value

What I generally find with clients when I do this is

There might be ten criteria that we list

When we do that drill down, it always ends up with maybe two, maybe three

Fundamental pieces of value

So they become the co-messive

Why do you want to book me?

Why am I worth £5,000?

Because I'm going to, I'm going to get you repeat bookings next year

I'm going to get you the highest

I know customer satisfaction scores that this conference has ever had

Maybe play the two things, how am I going to do that?

And then it's those first criteria things

It's by delivering those things except for me well

But we start with those fundamental value bits

So that's the methodology

If people struggle more

I don't really, I find it hard to put into words exactly what the value is

That's one way of approaching it

But absolutely fundamentally communicate your value

Smashing, thank you so much

You've shared such valuable advice today

And guidance for people on this issue of pricing

Which I know can really get people stuck

And procrastinating and stop them from moving forward

So it's a real benefit to have you on the show

So that's brilliant

Now before we point people to where they can book you to speak

Book you to consult with their organisation or work with you

I want to ask you a few questions

First question is this, what's the best thing that speaking has done for you?

I think the community

I've never yet met a speaker who has chronic stage fright

And somehow gritting their teeth and going through it anyway

All of us, there's an element of

We enjoy being in front of people

All of us, I think we enjoy the

Making a difference to people's lives

Everything that we do, it's impacting somebody somewhere somehow

When we stand on this stage, we change lives

So all of those things are part of why we do what we do

And that's part of why I enjoy being a speaker

But I think some of the best thing that the people have met

The professional speaking in the association, particularly, is a fabulous community

Really, really nice people

I relish the times when we have an opportunity to get together

And talk to each other and over a few points

A few more

It's fabulous

I should say, not just in the UK worldwide

I went and spoke in South Africa

Three years ago in April

And one of the ladies that have met over there, Joe Anita

I still had a WhatsApp with her just last week

We're continuously in touch

There's a guy called Martin

That company knows his surname properly

Laksh, Les, Golnick

Austrian

But Martin, really, really nice guy

It's fun to him this morning

So the people have met in the state

The just as a group

Genuinely, really, really nice people

That's a joy to spend time with

And build these relationships for these communities

Brilliant, thank you for sharing that

And I think that is something that you can feel quite lonely as a speaker sometimes

So finding a community of like-minded speakers can be really beneficial to you

From a well-being perspective

But also from a business perspective

Because you get to share ideas and tactics

And all that good stuff

But not a progress, even a tenth

As far as I've come without the PSA

All the generosity of advice and suggestions

And chances to try things out and get feedback

Talking to watching other people do things

The whole- it's a fabulous community

Brilliant, thank you for sharing that

And next question is around a time when you have spoken

And it didn't go quite to plan

And you're like, I don't want to think about that

Has that happened to you, David?

Just ten days ago

So, I said I create bespoke examples

When I'm talking to the CEO groups

And I cover sick pricing concept

One of them is volume

So the value bit I pick

One, maybe two of the companies

Where they've got a website

Which might be very pretty

You know, it might function very well

But it talks a lot about way

And when we were established

And it does all the things I was talking about earlier

So I'll pick that

I'll show, you know, look

I'll even then paste all of the content into a slide

And highlight the number of times

We talk about we and us an hour

Versus how many times we talk about you

And then I'll create a new web page

With a little bit of help from Trackly PT

You know, I'll create a new web page

Based on their existing website

That just focuses on the value communication

And I must have done this

A few hundred times

And every single time

The person from that company

They've got their cameras

And they're taking photos of the new content

So I'm talking to my web developer

First thing in the murdering

Until ten days ago

The guy took real umbrage

And he felt like he'd been ambushed

I created a really

I got terrible scores

And this is a Vistley session

Vistley scores matter

Because of the chairs

Book you based on those scores

I've written an email to apologize to him

Because

I don't know that it's not meant to be a number

It's meant to be

I've just picked one out of there

I could have picked almost anybody

I picked one out

But here's how he could be done better

But you didn't think so

So yeah

It's fresh in my mind

Because the scores are still forming

Will that make you change

How you approach that going forward

That experience?

I have

Because the

It's not so much that

I used him

If that's how I used him without talking to him first

So two hours ago

I've got another gig tomorrow morning

I figured out who it is that I'm going to be using two hours ago

I spoke to the two companies

Whose website's I'm going to

Do the same thing with

And they were

Oh yeah, great

Fantastic, fabulous

And that's the reaction I've had

99 times previously

But I want to avoid that

That hundredth time

I don't want that to happen again

Oh yeah, yeah

You're doing this for 16 years

I've a hundred of these

And still

Yeah, yeah

It's really interesting, though

But we're always

As speakers, we're all with learning

And evolving

Creating our content

And approach

To make things better

That we can make the difference to the audience

But yeah, it's just

But back on you

Specifically, because you came to my reach

And you did a session in the afternoon on storytelling

And the

This particular session that didn't work well

It wasn't ten days ago

It must be three weeks ago, three, four weeks ago

Actually, in there

So this is

How to price your plate

It passes my main thing

And I've done it three, four hundred times

I've got a new version

How to value your platypus

Which is focused on

How do you choose the price in the first place

And how do you communicate value

It's really focused on that bit

And I found a couple of

Vista troops who were prepared to be test subjects

So didn't charge, just went along

And returned for me

Coming and doing it

They gave me feedback

I improved on the back of that

And then I was comfortable

I had something and it worked

Did it with a few more people

Road it out

And I've done four or five

CEO groups

This one three, four weeks ago

It was the first Vista group

And it bombed

Probably because of the reasons I've just explained

But it bombed

But it got me

It got me thinking about just

Why?

Why was it not clicking?

And I came along to your storytelling session

And you were talking about the structure of the story

And you know how you put things together

It wasn't a direct thing that you said

But what you said

Just generated something in my head

It was like a light bulb going off an epiphany

And I went back

I spent a day restructuring

And rebuilding the content

It's all the same content

But now told in a more story-like manner

My scores with the one that bombed

Were two or three out of five

I did it again for the

A different group for the same chairman

Ten days after the

That first session

The scores were four point eight two

And you know to five

And things like that

So big thank you to you

But we are continuously learning

Yeah

Like I say, 60 years of experience

And you said something

And it really triggered something in my head

Like I say in the epiphany

Oh, good

I'm glad I made a difference to you

And I spent that time

Which is exactly what you were talking about

Thank you for the feedback

I appreciate that, David

Cool, right

Last few questions

What's the book that has had most impact on your life and why?

From a fiction point of view

Probably Lord of the Rings

And it's partly what got me into science fiction fantasy

And there was a

Period in my teens

When it was my Christmas book

Every single year

Outcame Lord of the Rings

I read the thing covered to cover again

So from a fiction point of view

Probably that one

And that's probably the fiction book

I've read more than any other

From a non-fiction book

Thinking fast and slow, Daniel Kahneman

Which is just a fabulous insight

Into how

Inside our head

It feels like we are completely logical

Reasonable, you know, insensible

And every decision that we take is

Fundamentally grounded in logic

And in reality

We're just this complex mess of these hidden shortcuts

That we rationalize after the event

And really, really interesting insight into humans

And that's not just from the pricing point of view

Fundamentally marketing is about trying to influence other humans to do things

And the better we understand how we take

The more effective a marketer you can be

In fact, people, anybody listening to this

The absolute best podcast in the world is Sarah Arches

Clearly

The second best podcast in the world is something called Nudge

Phil Agnew

And what did it do?

It's half an hour once a week

And he talks about the psychology behind some marketing thing

You know, I mean, he talks about the paper, the research and how it's applied

And there's a fabulous back catalogue

If you have anything to do with marketing sales influencing anything whatsoever

That podcast should be on your list

Brilliant, well, I'll give that a listen as well

So I'll put a link in the show notes to the books

And that podcast for people to go and check it out

Smashing, all right, penultimate question

What's the best bit of business advice you've had and why?

I think

This relates back to the being a high blue as well

There was a recall

When I had the senior role in an organisation called Premier Final

I was running one of the brands

It could be called CPC

And I reported into the Europe, Asia and Pacific,

a pack, whatever, who was CEO

So basically there's a CEO in America

And there's a CEO, the rest of the world

And we had a meeting about something

And there were three or four of us, we got together

And before he let us start

He made us really focus on exactly what's the question that we're trying to answer

And that's the number of times we go into something

We just dive straight in

Oh, solution

I think I've heard what it is, right, okay

This is what we should be doing

And he made us take a step back and get absolute clarity on it

What genuinely is the issue or what is the question that we're trying to answer

And only then did we start to work on it

And that is so powerful

I mentioned Vistage

I was actually a member of the equivalent of Vistage, something called ACE

The Academy for Chief Executives for 10 years

Vistage brought it, it's now rolled into Vistage

And the issue session that I talked about in the afternoon

The number of times somebody would bring an issue along

And then we go around the table asking questions

And then once everybody's uncovered all the background

Then they could give advice

The number of times the advice from somebody was

That's not the issue

The issue is really this

Because they'd listen to everything

And they'd heard and seen something

And you're looking at this the wrong way

That's not the problem you're trying to solve

It's really this

And that is such an important thing

Really be clear about what it is that you're trying to work on solve

And so whatever it might be

Yeah, there is definitely a correlation between the quality of the questions

And the quality of the solution

Okay, last question

If you could have one mentor David

And I can be alive or dead

Fictional or non-fictional

Who would you choose and why?

It's a bit of a weird one

And he is still alive, but it might be Billy Connolly

Cool

And it's because I'm glad that's at least one Billy Connolly in the world

I remember decades ago

He was doing the world tour things

He started off the world tour of Glasgow

He did the world tour of Scotland I think it was

This one was the world tour of Australia

And he was telling that one story where he decided finally

He was going to get his nipple pierced

And he went into where it was and they did the job

And after they got into the job

He looked to Billy Connolly said

Now there's one less of them and there's one more of us

And I'm glad there's one more of him

Or there's at least one of him in the world

Because every time I've ever watched him

He has a joyful life

And a sideways way of looking at everything

And I don't want to be him

But having something like that as a mentor

Who can show you the different way

The off route way

Just thinking about things

And finding the joy in it all

Because every single thing that he did

He'd just see it together

Biggest, you know, those out of

I think that that would be great to have something like that

Helping and guiding you

I think that's brilliant

I don't think we've ever had Billy Connolly as an answer

But I can absolutely see why you would be suggesting him

He's definitely one of a kind

And it's a shame there's not more like him

Like you said

Excellent

Well, David, thank you so much again for sharing

All of the experience

And you know, the years that you've put into this

To get to this point

And to share that knowledge with us

And give us some really tactical, practical tips

And tools to increase our prices

And not fall into some of those traps

That tend to sabotage people

Really, really appreciate it

And good pleasure

Good, and if people want to come find you

Where's the best place for them to go?

My website's the easiest thing

And it's www.Davidabethspeaker.com

No hyphons, Davidabethspeaker, two bees, two teas

Brilliant, and I can absolutely recommend David as a speaker

Now, I'm probably the worst person to watch speakers

Because I'm, you know, you kind of dissect things

But you absolutely, you know, captivated me

And it was really, really useful

Really good stuff

So highly recommend

Good, well thanks so much David

You look after yourself and thanks for coming on the show

Oh, it's been the total pleasure

I loved it

There was a lot in there, a ton of value

And David always brings the goods

I've seen him speak, as I said, in the show

And yeah, he delivers every time

So I'm absolutely chuffed that we're able to tap into his brilliance on the speaking club

Now, there's a few things that really stood out for me

First of all, this idea that pricing isn't a numbers problem

It's a value communication problem

And this is something that I see all the time

In terms of speakers positioning their message

And packaging their message in a way that really clearly

And quickly articulates the value that they're going to bring to whoever is booking them

Because if people don't understand the value

The price is always going to feel too high

Second, the reminder that confidence in your pricing doesn't come from picking the right number

It comes from being clear about who you deliver for and what you deliver

And finally, this is a big one for speakers

Discounting isn't a strategy

It might feel like a quick win

But over time, it chips away at your positioning and your business

And I also love those psychological tips

And packages and number endings that are also going to be really useful

To tap into that psychology of buying that people have

So if you have been sitting on your pricing or second guessing it or undercharging

Maybe this is your nudge to revisit it

And if you enjoyed the episode then go and check out David's website, his work

He's also got a book, the Platypus pricing process

And I'll pop all the links to those things in the show notes for you

And if you know another speaker or business owner who needs to hear this

Send it their way

Also you've got a value going say hi to David on LinkedIn

I'm sure he will appreciate that too

So until next time

Firstly I want to say thanks so much for watching or listening to the show

We understand your time is precious

Hope you got a ton of value you thought it was worth the investment today

And if you did and you are listening to the show for the first time

Maybe subscribe so that you get these nuggets every time we publish an episode

And if you're on YouTube subscribe

Leave a comment with a brilliant, let us know what you thought

If you've got any questions that you might want David to respond to

Bungam in the comments

And if you are listening on a podcast then it'd be amazing if you could leave a rating or review

You can do that where you're listening or super easy

Take a couple of seconds or more like I guess 60

Go to ratethispodcast.com slash TSC

And that would be amazing if you could take the time to do that if you've enjoyed the show

So all that's left for me to say is thank you again for watching and listening

It's been amazing to be with you again

And don't forget until next time

To go out, grab your life by the nuts and get cracking

Bye bye

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