April 9, 2020
The Magic of ROI Pricing

The Magic of ROI Pricing


James Schramko here with a pricing tip. I was just having a chat with a SilverCircle member of mine. He’s in a high level coaching program and he asked me how did I arrive at the pricing that I had for my first retail services for online marketing. And we’re talking about 11 years ago so it’s a while back. I was charging $5,500 per month. And I said to him, it was pretty easy because I calculated my fees based roughly of what a customer was worth to my customer. One of my customers was in the legal market, and their average customer was worth over $100,000 to them so $5,500 per month was a very low fee. In fact, if they got one customer, that would pay for me for the next two years. The other customer was a motor dealer, and the average vehicle sold would make them around $3,000 to $5,000 profit. So again, if they could say one car in an entire month then my fee was paid for. So this is an ROI argument, return on investment. If you can show a prospect that the fee they pay you is just a tiny fraction of what they can make in return for that investment, then you’ll find your fees don’t look that big. And you know, $5,500 per month is actually a drop in the ocean for the right client, whereas it might be just way too much for the wrong client. So, look for clients who get a big fee or payout for each sale if you’re in the agency or the supply market. And they’re the ones who are going to pay you really well and they’ll appreciate a job done well. Same applies for information products, of course If your information product is a few thousand dollars, but it can help someone generate tens of thousands or hundreds of thousands, you can also use the ROI argument. I’m James Schramko, this is SuperFastBusiness. Wherever you see this video, if you like it, be sure to subscribe, leave comments. I answer them personally. I’m really interested to know what would you like me to make a video about in a future episode. Speak soon.

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