Experience University Podcast

S5E11: Pricing Your Value

September 28, 2021 Extraordinary Events Season 5 Episode 11
Experience University Podcast
S5E11: Pricing Your Value
Show Notes Transcript


Do you understand how to price your work? The value of your efforts and content? In today’s podcast, I talk about the importance of knowing your worth, understanding your deliverables and pricing your event! 

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Dr.K: Hello, Hello, my friends from all around the world. Today, I'm just a little sad because most of my faculty friends are in Denmark at EuroCHRIE. And I am not sadly I had plans to go. And then with travel restrictions and my university, I was not able to go this year. But I'm thinking of all of you, and I miss you. And I hope you all have safe travels. Today, I am super -- I'm always passionate about the topics I talk about. But today, I am super, super passionate. And I'm already doing the hand talking. So if we were recording this, you would see my hands all over the place. So what am I so passionate about today, you ask? I am super passionate talking about pricing. This is near and dear to my heart, always. But there were some things that happened this week. And let me tell you, mama bear is coming out in defense of events. And in defense of pricing and of value. 


One thing that I did want to point out is, if you didn't know kind of the shift in terms of events, we many, many years ago, many decades ago, we were purely kind of like a logistics model. Like event coordinators were really people that just facilitated vendors. So you would come to us and you would say, Okay, I need a room for 100 people and I need food. And here's my dietary restrictions, which were not as fancy back then as they are today. And then about maybe 10 to 15 years ago, definitely 20 years ago, when Joe Pyne and his colleague put out the experience economy, we started seeing this realization, and this shift from this transactional economy to the experience economy. And that's on a global basis across all industries, this focus on experience. But of course, in events, events are naturally in experience. And so it really became super important to the event industry. And when we look at that, that did a lot of interesting things within our industry, we started focusing a lot on the experience and the return on investment, the ROI of that experience. So events definitely like 10 to 15 years ago, started focusing on design, strategy, making sure that we're truly part of the marketing plan, trying to extend those efforts beyond just a live experience. So that way, we have touch points before, during and after. Collecting data super, super important. How do we know if this was a valuable experience?


And then I would say maybe five years ago, the early adopters and innovators really started talking about transformation. There's the experience economy, and then there's the transformation economy. And the transformation economy is kind of that end point on the line, because you're just going to keep transforming. So what does that mean? That means that we're looking for those once in a lifetime experiences that are going to cause us to evolve and transform ourselves, it's going to have some type of transformational effect on our lives, we’ll be in a different place than we were before we went to that event or that experience. That we are going to just shift as a person. Naturally, this is the end of the line in terms of transactional experience or transformation, because you're just going to keep transforming, right? And this becomes really interesting because the transformation also goes to value. Right? 


And so when we think about value, what is the value of that transformation? One of the examples that was given and one of the readings that I it might have been the experience economy but I do read a lot was talking about what if a fitness center wasn't charging per month, but they were charging for the actual transformation of your body, right? So instead of saying it was $10 per month, what if they said, “Hey, if you have this transformation, if you've lost the weight that you came in here to lose if you're living a healthier lifestyle, how about you pay us then. And then you pay us a higher rate”, right? So what an interesting concept is that you're paying for the transformation. And not just to take up space, that would be such a different model, right? And think of all the companies that would then market differently, you're not just marketing on a low cost of, Hey, I'm $5 a month with no startup fee, because realistically, we know you're not going to use us anyway, they would really have to show their value, and how using their product is going to transform your life. 


So back to events. During COVID, a lot of events moved online. And this was really interesting, because we saw pricing models all over the place. I distinctly remember, there was one event that I went to two years before COVID. It was a one day event. It was $1200. And I was like, wow, that's super hefty for a one day event, but they were marketing transformation. So I said, Okay, I'm gonna go to it, they like a money back guarantee, I'm like, they're really confident people speak very highly of them, they're always sold out, I'm gonna go. And during that event, I was like, wow, like this is really making me think. And then afterwards, I did have a transformation, I did think about my life. It was really interesting. It was money well spent. And there was another event that I went to, and the registration was $4500. But it was for a week. And everybody's talked to so positively about the transformation that was happening. So I went to that event. And although on site, I was a little disappointed. And I'll explain to you in a second why afterwards, connecting with the people I met at that event. That is real, where the real magic was for me and that experience, and then it was money well spent because of the network that it gave me. 


So when we look at why I was a little unhappy at that event, it's because the expectations did not meet the reality. And this is super, super important when we're talking about satisfaction, and value, which leads to pricing, which is where we're going to go with this conversation. So you have an expectation, and then you have the reality, right? So a lot of events during COVID went online, they were different types of strategies. Some just said, okay, it's online, we're gonna make it completely free. So we can extend our reach with quality content that will suck people in. And for some companies that worked. But what happens when you make your event free. For example, I am supposed to be in an event right now. It's online, Friday, Saturday, Sunday, today, Saturday, Friday, Saturday, Sunday, and it's from 10am to 8pm. Every single day, I've heard incredible things about this event but I had gotten a discount code. So I only had to spend $1 on registration. 


And I have no doubt that this event would be super awesome for me, quality content, great speakers. But life gets in the way. Life got in the way, I had a lot of things on my plate. I had to really prioritize my time, this was a last minute thing that popped up. I just got the code on Tuesday. And I just said, Hey, I paid $1. It's not a huge loss. But then also like, if they record it, I'll go back and look at the recordings. But if not, I'll just catch it next time it comes around. There's no doubt in my mind that it was valuable, but I didn't have that investment in my money in it. Right? So expectations and reality. So when you have an expectation that something's going to be good, and your reality is that it's good, then those match right? 


When your expectation is set, that it's going to be super transformational and super impactful and change your life. And then that expectation isn't met at that event or shortly after that event, then you become disappointed and you feel like you have wasted money. When your expectation is set really low or in the middle, but then you come through with this like super duper incredible transformational event, then not only is that attendee going to be like this was a really really good value, good investment of my time, then they're also going to like be praising it word of mouth, selling it to other people and naturally growing your base. Not that we should all go out and start marketing that or events or like low expectations. You don't want to do that. But it definitely is important that they match if you're selling a super transformational event. You have to deliver on that. And so those events that I paid so much money for that $1200, for that one day, they set the expectation, I went into it, they met that expectation; therefore, I was very, very happy. Whereas that $4500 event, they set that expectation, I went in, and I was disappointed. And then again, could have requested my money back, but I didn't. And, and so there's things that I've still been included in alumni groups and getting to meet with different people.


So when we're talking about value, I think it's really, really important that we keep those things in mind. Because I can say that I'm super valuable. But that expectation has to meet reality. I'll give you one example in a non-event related situation, and then we're going to talk about pricing because that's super, super important. So if this concept is just like, a little bit out of your mind, or if you're like, Oh, yeah, Kristin, that's so obvious. Let me put it in a different perspective. My first-semester teaching at UNL, I came in. I was brand new, right? And you don't know what to expect, as students don't know what to expect when you're brand new. So when you have advisors, they are talking to the students about these classes, right? These classes historically, and previous teachers who have taught this class, they use a textbook, they had quizzes, I'm not saying it was an easy course. But it was relatively easy in terms of time investment. Students were advised like this is would be a good course to take with these other courses. It's not super time-intensive. This is kind of the structure so that way, you can plan your semester around it, right? 


Well, then I come in, students are expecting one thing based on word of mouth, from other students, word of mouth, from faculty, and word of mouth, from the advisors. And they come in, and then they're in my, my class, I have no book, I have a group project that's a little bit time intensive. I don't have exams. And that expectation and that reality just did not align. And no matter what I did that semester, it didn't matter I was if I was super, super awesome, it didn't matter if I came in and gave everybody a straight A, it didn't, none of that mattered because the students came in. And the reality did not meet their expectation. And therefore they were, I wouldn't say unhappy, because some were probably pleasantly surprised. But the students that came in, and they really expected that and that's what they were expecting, they were a little bit disappointed. I was just talking about this with one of our new faculty, because it's her first semester. And of course, students were talking about who that previous teacher had been, and how that course was set up. And then she came in, and she's teaching that course. And again, it doesn't matter how ridiculously awesome she is, that expectation, that reality are just not going to align because nobody knows who you are. Nobody knows how you teach. And so you set that expectation for future semesters. And that's also why in terms of higher education when you have annual evaluations or mid-tenure review, it takes those things into account.


When you have that semester evaluation or that mid-tenure review, it takes those things into account in terms of timelines, because you, you don't know what to expect. And you need time for that, that group of students to kind of get to know you better. Alright, so back to value in pricing. So now that you've really kind of wrap this your mind around it in terms of your expectations, and your reality, and how important it is to align. Then you really need to look at your program, and you need to establish the value that it has. And then you need to price it accordingly. That first event that I told you that was $1200 for one day, they move their program online, and they still charge $1200 online. And everybody was like it's online! You don't have those costs! You don't have food and beverage, you don't have the the the room costs and all of those things. Why is it still so expensive!? And they stood by their program and they said our program changes lives and they charge money. And they still had pretty much just about the same of people online as they did in person. Now other companies they said we’re pushing it online, so we're going to either be free or heavily reduced. And then what you saw was the entire market was flooded. It did extend reach, which if that was your strategy, that's good. That's okay. It did extend reach, but if the value wasn't there, then it doesn't matter. It can actually hurt your branding. 


So a lot of companies said, Okay, we're going to put a program online, and we're going to make it free. But then they didn't dedicate internal resources to it, because they said, This isn't a budget line. You know, we're taking resources, and we're giving it away for free, we're not charging for it. And so this actually takes away from some of our money, because we have to pay these employees to run this program. So they didn't give it the time and attention that it deserved, the value was low, people came because it was free, or, or greatly reduced, and then they weren't satisfied. So you're actually losing customers this way. So this past week, I was asked to design an event concept for an event. And this event was originally going to be free extending reach doing these things. And I was really focused on the why and the purpose, what is the purpose of this event, and looking at the purpose, and looking at the event designed to meet the needs and the pains of that target market group, I created this absolutely incredible event design. I was like you if you talk to your target market, if you do focus groups, if you look at pains, if you look at what they need, if you look at the experience that they're desiring, this is how that experience should be designed. And we should charge for it.


Absolutely, we should charge for it. Because one, there's a lot of hard costs, because we're going to be doing mailings. And the item in it is not just like that free random swag that's optional like it is integral like it is a necessary part of that design. And this is going to change lives, it will truly I just I am having all the hand motions right now. I wish you all could see it. This event design, if the attendees attend, if they commit, if they're in the process, it will literally transform their lives. I know 100% that it will. I know that it is designed in a way that is just beautiful for transformation. And now I'm like talking with the board and with the stakeholders of like, we need to charge but they don't want to charge. And I'm like, if you don't charge, you're actually devaluing this incredible product that you're going to bring to market. And if you don't value it appropriately, that's you're practically giving away all of this stuff, right? And it's better to have a smaller group who's super committed, who's willing to pay the $100. You know, I think my estimated costs just to cover costs and breakeven was like $49. But the value would be just as much as that $1200 program. And to sit there and like be fighting for the fact that it's worth spending money is just like somewhat slightly infuriating. So that has led to this podcast, I'm already at 18 minutes. And my end takeaway is really look at one what your target market, your stakeholders that you're designing for, what is their expectation?


Two, Can you actually deliver on it? What are your stakeholders needs? What are their pains, and not like what you think they are like, Hey, I think that they want this know truly like talk to them and figure out exactly what their pains are. And then design that experience, to alleviate those pains to give them gains to give them things they need. And not just things that you're assuming they want. And then please, please, please, please price it. So that way they understand the value. They're bought into it. They give it the time and attention that it deserves. And they know that it's going to transform their life. Do not undersell yourself, do not undersell your event, and do not undersell the transformation that you are designing for your event attendees. 


As always, I never take your time for granted. I am just so incredibly in awe that so many people listen to this little podcast that I started over a year ago and just so many people have reached out, please rate, review, subscribe, share it with a friend if you found value in this podcast. If you're dealing with the same things that I'm dealing with right now, if you're trying to charge what your event is worth, you're trying to charge the value send this to somebody who can get on your team and can help advocate for charging what you know it's worth. Thank you all so much for taking the time to make the time I will talk with you soon.