Latest / Closing Sales in Nigeria - Sales For The Nigerian Business Person: The Sales and Marketing Blueprint / Are You Too Scared to Name Your Price? (And Why)

Transcript

Are You Too Scared to Name Your Price? (And Why) · Closing Sales in Nigeria - Sales For The Nigerian Business Person: The Sales and Marketing Blueprint

0:01
Today on the podcast, we're going to have a very, very, very
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random conversation about pricing.
0:08
Now, the reason why I say this conversation is going to be
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random is because it's based on a conversation that I had with a
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listener of the podcast today. And we talked about pricing and
0:20
a couple of issues related to pricing, but in no particular
0:24
order. However, I do recognize that
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this particular listener has some hang ups around pricing
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that I think are common to lots of people who are starting out
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new in business. So I figured, let me just hope
0:37
over here on the microphone and make a very quick recording so
0:42
that we can well, let's say, elevate the mood of people who
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are coming in new to business and you have plenty of hang ups.
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You know, am I charging too much?
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Am I too cheap? How much should I charge?
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You know, all these sorts of things.
1:00
Now, the listener of the podcast has requested that I do not use
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her real name. So we're going to call her
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Sophie Kuye. And of course, that's not her
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real name. But for those of you who live in
1:11
Lagos, in fact, for those of you who live close to Maryland, you
1:15
will know that there actually is a street called Sophie Kuye.
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And that's because that's where my wife grew up, and it's close
1:24
enough to the lady's name. So I said, let me just use it.
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So Sophie, if you're listening to this podcast episode, yes,
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this is about the conversation that we had.
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I'm respecting your privacy, so I'm not using your real name.
1:37
And for those of you who are listening to the podcast for the
1:38
first time, since we're talking about names and you're wondering
1:41
who is this guy? What's his name?
1:43
My name is Tavishima Aede. I'm the host of the podcast.
1:46
I'm also a radio show host and a business consultant.
1:50
And if you'd love to connect with me, you can call, send me a
1:53
text message or a WhatsApp message on 08064662140.
2:01
And if you love talking about business issues, then subscribe
2:05
to the podcast because that's all I do here every single week,
2:10
sometimes 4-5, maybe 6-7 times a week.
2:15
So subscribe on Spotify, YouTube, Apple, or any player of
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your choice. And there's a lot of value that
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is already here because once you subscribe, you will see that in
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this feed. We have over 1300 episodes and
2:35
yeah, they're here for you for free.
2:37
So subscribe and dig in. All right, so like I said,
2:42
random conversation on pricing and it's based on the
2:45
conversations that we had. I had with Sophie Kuye, again,
2:49
not her real name. So Sophie reached out to me on
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WhatsApp. She said she appreciates the
2:55
podcast, especially the episodes that I did around the social and
3:00
media managers. Now for those of you who are new
3:04
to the podcast, may be listening for the last month or two, you
3:07
remember I did a series where my core thesis was that those of
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you who are social media managers, content managers, you
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will always remain, excuse me, you will always remain
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undervalued. People will continue to price
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you like Groundnut until you wake up and realize that when
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people engage social media managers, when people engage
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content creators, business owners, what the business owner
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actually wants is profit. So stop thinking that your job
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is a pretty post or creating content calendars or keeping the
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Instagram populated. So despite your best efforts, if
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somebody has engaged you as social media manager, the person
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is a business owner. The person has been paying your
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salary or paying your contract fee or whatever for two months
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and the person never sees shishi no profit.
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The person will say you are not doing your job no matter how
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pretty those posts are. And that is precisely the reason
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why business owners look at you people and continue to price you
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people 50K50K. It's because they're looking for
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revenue and you guys refuse to take part in the revenue
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conversation. Now, for those of you who
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listened, you'll remember that part of my thesis was this.
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You don't even have to tell the business owner that, look, I'm
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going to guarantee you 50 posts. The 50 posts are going to bring
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you 2 customers. No, it's not within your power,
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but you need to have that conversation from the outset and
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set expectations. You tell them, Sir, Madam,
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usually when people hire content content manager or social media
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manager, people usually think they're paying for revenue.
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Is that the case? Are you hiring me because you
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think my activities can be directly tied into revenue?
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Then you keep quiet and hear what Oga or Madam has to say.
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If they say yes, you can now Savile back and say, OK, I
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understand Sir, it's perfectly reasonable.
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But I cannot justify any financial returns because all I
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can do is produce content. The content that I produce can
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lead to an increase of engagement.
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But however, it is people who have customer facing functions.
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It is your sales people or the person who actually man's the
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Instagram inbox or the WhatsApp inbox, you know who will be
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responsible for sales. So you can't tie me directly
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into that. But however, since I've been
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doing this job for the last 3-4 years, blah, blah, blah, I'll be
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able to bring some insights around this kind of behavior and
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that kind of behavior. Hopefully that should be able to
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lead to greater revenue. So are we in agreement that as
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you're hiring me, I am not responsible?
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I'm sorry. I'm not responsible for revenue
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outcomes. Have the conversation before you
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collect money so that they won't be quarrel because definitely I
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can assure you anybody who's dropping money for our services,
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the person is expecting revenue at the end of the day.
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So social media managers, content creators, stop burying
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your head in the sand. Have the conversation outright.
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If you're willing to step to the challenge, no problem and be
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responsible for revenue, no problem.
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If you don't think that's your job, have the conversation on
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1st. If the person strongly insists
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that no, the reason why I'm paying you 400 a month is
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because I expect to see revenue results, then don't collect that
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money. Do not.
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I know you somehow to hear me say it because you know times
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are hard. But like what do you prefer?
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You collect the guys 400, you collect his 350.
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Then the end of the month you will start quarreling.
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The guy will be saying where the where the customers.
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You will not be shouting back and forth.
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They now start playing those CD games where the guy pay you for
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one month, then you work for two weeks and they say you know
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what, less than this team you now says that's saying where's
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my money? I've worked two weeks and the
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guy says which money neighbor will now start quarreling back
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and forth. You now be dragging yourself all
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over social media. Have the conversation upfront,
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then let's see what else did I say about social media managers?
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I can't remember. That was a long time ago, but
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basically, if you're a social media manager and you're a
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content creator, you've been having some of these tensions in
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your business, Then just continue to scroll.
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You will scroll more than a month or two months worth of
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episodes. Just look for anything that has
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social media in the title and you will get caught up to speed.
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So Sophie Kuye, she said that she appreciates the podcast.
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She loved those episodes and that's why she's reaching out
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because her own problem is Sophie said that she's scared of
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naming her price. She's talking to somebody looks
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like they're a good deal, like like they're a good fit.
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The person says how much. That's where she will now hook.
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She could have fair small like how can she say her price?
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Also, there's some issues that happen in sales and business
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development. We call this scope creep.
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Scope creep. Scope as in SCOPE.
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Now scope creep happens. In fact, those of us who are who
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used to be wedding photographers mean we know this thing.
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We know it well. Scope creep is when somebody
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agrees that we'll pay 250 for XYZ.
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They now transfer the money. You start the work as you start.
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Now by the time you deliver X&Y, they'll say, uh huh, you get one
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thing way, blah, blah, blah, blah, blah.
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And then you say it's not a big deal.
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Now I beg, I beg. They would just add it before
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you know it. Now deliverables is now XYZ plus
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one after a while, don't now say a beg or boy no vex, you know
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this thing something before you know it divided another thing
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that's XYZ +2 and before you know it, the good they add the
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good they add the good they add. That's what we call scope creep.
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As per the initial scope was like this.
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Now we don't they creep, we don't they add small, small,
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small. That's how some people, they try
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and be smart to pay you for something, Then you'll now be
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adding extra on top. That's scope creep.
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So those of us in the wedding photography space now, we're
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used to that kind of behavior. You will discuss with the bride.
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You discuss. You will agree.
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Yeah. OK.
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It's just wedding day, Abby. It's just Thursday for trad.
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Thursday, Saturday. I agreed, Abby.
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No problem. You guys want one book, Abby?
10:01
No problem. Two friends, no problem.
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Only two shooters. I'll be no problem.
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OK, from this time to this time, no problem.
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They will transfer the money, but no problem.
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And that's how on Thursday, now as the traditional is going on
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and everything, everything is going on fine.
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You know, everything finished, you do.
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Picture as you're rounding up the bird.
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Now say, are you going? You say yes.
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Now. Now go ahead to go listen.
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Well, you know my husband, he and his boys, they came in from
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Katuna and from here we want to enter one or two places.
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Now you know, I beg you suppose you see that scope creep You
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will agreed for wedding day only Thursday and Friday as soon I
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don't finish Thursday. Now they'll say how far.
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Now as per you know, we hit the town small after party day, at
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least just show for the after party at least just give us like
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you know, small shots like one hour that scope creep that
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people be adding and be adding. So this is something to watch
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out for. For those of you who are new in
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business, you know, Nigerian, some Nigerian customers, they
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like to be sharp. So these are some of the small
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games they will they will try with you.
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They agree on one 2-3 you will agree everything is in writing
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on the very day now or as you they fulfill, as you they
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deliver, they now start to add small, small, small.
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So for Sophie, this was a scope creep.
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You agree on social media management.
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I have no problem. Mode and manage.
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Then you begin. Next thing they're now saying,
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hey Sophie, I beg. Sure you know how to design.
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So excuse me. Sure you know how to design.
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I know how to design. I beg, I beg, I beg.
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Just one. Just this post.
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I beg. Just have me design.
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Just just this post. I just one, one.
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That's how you design one. There's more time again they'll
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say I beg, I beg. I beg.
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I beg. You know, this thing you're
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doing is is very, very good and you know, there's engagement and
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all not but I beg Sophie, I'm overwhelmed like the WhatsApp
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community, the Facebook community, but I need help.
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I beg. Please just help me out.
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You know, I know it's not part of your job.
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I beg just help me at least this Friday, just help me, you know.
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So from like that now first you will agreed on social media
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management. That's how they've now added
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designer to your work. That's how they've now added
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community manager to your work. And then you will agreed on
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200K. Excuse me but I didn't want to
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add anything on top that 200K even though they're adding to
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your work. So that is what is called a
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scope creep. So those are the 2 problems for
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Sophie. She doesn't know how to call her
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price because she's not too confident.
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And then when they agree to work, now the person will begin,
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they do scope creep. So please watch out for scope
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creep. That's why it's important to set
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expectations very well from the beginning.
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And to be absolutely clear. So I had a couple of questions
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for Sophie and she didn't really answer them to my to my liking,
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but these are the questions. The first question was how much
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do you charge versus how much does the competition charge?
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Then I also asked them how much you need to survive, you know,
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especially when you consider the number of clients that you might
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get in a month. Then I also asked what is the
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value that you promised for such amount?
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Because you know, it's not just a matter of you know, how much,
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it's also a matter of what you provide.
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Because you might hear that somebody is charging, let's say
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500K per month and you say 500 K is big.
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But then by the time you look at the deliverables, you see that
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the person is delivering plenty. You say, no, this person,
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they're actually shooting themselves in the foot.
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Now for what they're delivering, they actually should be charging
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1.5 instead of 500 K. So at the end of the day, it's
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not how big is the amount? It's not did you charge 50K or
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did you charge 200 or did you charge 800K is also what were
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you delivering for that amount? So that was one question.
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Then also I had to ask her the main question.
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Ask that point blank. Do you, you Sophie, do you think
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you're too expensive? Because for those of you
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listening to this podcast now, you feel like you're a Sophie
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situation. The problem is that you
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listening to this podcast right now, you actually think you're
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too expensive. That's the reason why you do
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fear. That's the reason why they
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shake. That's the reason why your mouth
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is not strong. When you call their mouth, you
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actually think you're too expensive.
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So I have to ask her now, I'm not being harsh here.
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I'm just trying to figure out where the problem lies because
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depending on the answer she gives to the question, you know,
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that's all determine was the next the next way forward.
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Then I also asked her, how long have you been in business?
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Because sometimes there's a correlation.
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When you're coming in, you you know, you'll be too confident.
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You know, your legs never are strong yet you don't know the
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layer of the land. You know, you still have baby
15:03
feet. You're still trying to survey.
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So these are some of the things that affect that's also the
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reason why my first wedding, I've said it lots of times on
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the podcast. This is your first time
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listening. Let me repeat it again.
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My first wedding, I charge 50K by the time I finish photo book
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plus transport plus battery plus Gala.
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Because what I do on on the wedding day because I don't like
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to be late. That's back when I was in Lagos.
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I know that traffic in Lagos is mad.
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So the night before I'll buy Gala like 7-8, then buy Fanta,
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maybe like 22 bottles of Fanta, That's the big ones.
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Then just chew them up so that during the day I'm taking care
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of, you know, just go to sip my Fanta and then eat my Gala.
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Just keep myself, you know, keep myself gallant with energy on
15:53
the move. So Gala plus battery plus taxi
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plus everything because where was the wedding itself?
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I can't remember where the wedding was and I didn't have a
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car then and I said I can't carry Mumsy's car to this kind
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of neighborhood. So I say you know what, let me
16:08
just carry taxi there, Judge Jelly and then taxi back.
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So by the time I finish, remember I collected 50K from
16:14
this couple. By the time I finish everything
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I spent like 4047500. Mumsy laughed at me at Mumsy
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laughed. She said that wish my should
16:26
have just stayed at home and dashed the bride 5K and my mind
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is like, yeah, actually, mom, she's right.
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I said I've just stayed at home and told the bride, you know
16:33
what, that 50K just keep it. Let me even dash you 5K like,
16:37
you know, happy wedding, happy wedding life, happy marriage
16:40
life. But then it was good.
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I like the experience because you know, that's that's how you
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learn. That's how you learn.
16:47
Where was I? So do you think you're too
16:50
expensive, Sophie? Do you think you're expensive?
16:53
Any other person listening to this?
16:55
Do you think you are too expensive?
16:57
If you identify with Sophie, how long have you been in the
17:00
business? And then also asked her how many
17:03
satisfied clients do you have now?
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These questions, they're important and This is why.
17:09
How much does the competition charge?
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Sometimes whether you're too expensive or not, you can know
17:14
based on, you know, the lay of the land.
17:16
If you come to a part of the country and let's say you sell
17:21
purple cream for skin, 'cause people want their skin to be
17:25
bright, they want their future to be bright.
17:27
So if you sell purple soap but you happen to be in the
17:29
neighborhood where or in the locale in a setting where people
17:34
don't really have money, you know the market is the market.
17:38
The amount of money that Lagos babes will pay for purple soap
17:41
and Abuja babes and Portaco babe will pay for purple soap might
17:46
not be the same that to worry babes will pay for purple soap.
17:51
So some things are just a function of the market.
17:54
It's unfortunate but that's just how it is.
17:57
So it gets on things way. If you want to sell them in New
17:59
York, you collect good money, but then if you want to sell it
18:02
in Tennessee, you know the pepper will know, the money will
18:05
not. Do you understand There's some
18:08
things that you sell in Abuja good money.
18:10
If you enter marketing, they'll be pricing you cherry weather
18:13
they'll be pricing you anyhow, pressing you like Chile Cambia,
18:17
as in you know, like no worth. So the competition.
18:24
How much are they charging? There's not a bad way to survey
18:28
to look at the whole thing. Then, of course, we also have to
18:34
be frank, because how I put it is then I mean, you know
18:39
yourself now and you know your your lifestyle requirements.
18:43
So there's certain amount of money that you just need.
18:46
So if you're getting 22 clients every month, you know, you can
18:49
just do the math and say, you know, what if I get 22 clients
18:53
every month and I'm charging each of them 5500K, that's
18:56
1,000,000 every month, you know, I should be OK.
18:59
So sometimes you do that math as well.
19:03
Of course. What are you promising to to
19:06
give for that amount? Because remember, that's the
19:08
main thing that will determine whether you are charging too
19:12
much or charging too small then OK, I've already explained that.
19:19
Do you think you're expensive? That's a big thing to consider.
19:22
The length of time in business was spoken about that OK hand
19:25
number of satisfied clients. Now the reason why number of
19:27
satisfied clients is important is this by the time you've been
19:30
doing something for a while, you've interacted with a few
19:32
people, you get a sense of why people like doing business with
19:35
you. They say, Sophie.
19:37
Well, first of all, you have to ask and people will tell you
19:39
outright that look, Sophie, the reason why I do business use
19:42
because when I call you, you sort me out, you do this, you're
19:46
the, this, you're the that you get a sense of unique value
19:48
proposition. These are the kind of things
19:50
that fill you with confidence and you even know the good stuff
19:53
that you're bringing to the market.
19:55
Now, the example that I've given my own experiences back as a
19:58
wedding photographer, I'd never asked anybody this.
20:01
So one of my longest clients, I asked her, you know, why do you
20:05
do business with me? And she said, I don't know, I
20:07
just like you and I mind, I'm thinking, what am I going to do
20:10
with that? I just like you.
20:12
Yeah, but anyway, I was not deterred.
20:15
I kept on asking other people, kept asking other people.
20:18
And then I noticed the pattern emerge.
20:20
I thought people were going to say your photography is
20:22
wonderful, your, this is, you know, your style, your blah,
20:25
blah, blah. I thought they were going to
20:27
commend my technique. But then I started hearing some
20:29
things like, you're never late, you're very professional, you're
20:34
always on time. For one bride in particular,
20:37
remember her, she said, you are the only wedding vendor that I
20:41
didn't have to worry about. I started hearing things like
20:45
that and it became clear that the reason why people did
20:47
business with me as a wedding photographer was not on the
20:50
artistic side per SE, but more on the professional side.
20:55
And two things. Number one, it broke my heart
20:59
because I thought I was a very good photographer.
21:01
Only people to say, Oh my God, Mr. Yedi, your photos are
21:04
fantastic. Your photos are Oh my God.
21:07
But anyway, that's not what they said.
21:09
So they didn't really pay me. Sure, you pay me, but then I
21:14
also took it as a good thing that were shows I'm a correct
21:19
guy. I'm professional.
21:21
Whenever I told my mom say mom, she laughs, she say you.
21:24
Well, that's because, you know, when it comes to business
21:27
affairs, at least when I was in a photographer, because I'm in
21:31
the habit of getting laid, I always make sure that when it
21:33
comes to paying jobs, I always make sure I left the house on
21:36
time. So moms, he laughs.
21:37
He said people say you keep time.
21:38
I say yes. So mommy, that's what they say.
21:41
And that's because of my personal affairs.
21:42
I'm late when it comes to money. You will see me on time.
21:46
On time. If it's money and we say 9:00,
21:50
you will see me there. 835 S where was I?
21:55
So that's why number of satisfied clients is very, very
21:57
important. So you should be talking to
21:58
people, figure out why they do business with us.
22:01
We'll know what our unique value proposition is and it'll also
22:03
give us some confidence behind what it is that we're charging.
22:06
And honestly, there are one or two customers who will tell you
22:10
that, who'll be frank with you. Say, Sophie, you know what,
22:14
Sophie, let me not tell you lie between you and me outside, this
22:20
is what people are charging. So Sophie, you need to raise
22:24
your price. But Sophie, you know that you
22:27
and me, we're cool now, so let's just maintain this level that
22:30
we're on. But honestly speaking for future
22:33
clients that you're getting this, how much you should be
22:35
charging. So yeah, you will get some
22:36
people who have that conversation with you and tell
22:38
you that look for the quality of work that you do be underpriced.
22:43
All right, so let's see what else now.
22:46
So high response now, it didn't surprise me.
22:49
Sophie said yes, that she's overcharging.
22:52
That's what she feels like, she's overcharging.
22:54
And for a lot of you, you let some personal things get in the
22:57
way. They actually feel as if you're
23:00
overcharging. So that's the reason why your
23:03
mouth is shaking. When I started off at the time,
23:09
you know, before then salary earner.
23:11
So never had to fend for myself. So having to call 50K, by the
23:19
way, this, this was a long, long, long, long, long time ago
23:22
before I got married. So I went to call 50K.
23:24
Then the money sounded big in my mouth.
23:28
The money, the syllable was sounding heavy in my mouth,
23:32
sounding very, very heavy. So anyway, some Risha, she
23:39
thinks she's overcharging. That's what she said.
23:41
Now the question of the competition.
23:44
I'm surprised by the figure, by the way, you know, how will I
23:49
put it? Just not all of us are in Lagos
23:52
or in Abuja. So just take that into account
23:54
when you hear the amount. So a competition is charging
23:58
like 80 K 100K social media management.
24:01
But she she says she's OK with 60K 'cause remember, like I
24:06
said, you know your own lifestyle.
24:07
So you do the math. So some people do that math that
24:10
OK, if I can get one customer 60K and I can collect like 10
24:15
clients, that's 600K in a month. You know, some people do that
24:18
kind of math. So far as she said 60K, she can
24:20
collect from one person, 60K, she's OK.
24:25
But then she also said she's only been in the business for
24:27
one year, which didn't surprise me because when we're coming in,
24:30
you, you know, we have baby legs, we're still weak in the
24:34
knees. So we're still trying to know
24:36
what's up. So all these psychological
24:40
issues will come up and then she has only had two customers so
24:43
far, of course, which is also not a surprise.
24:46
So that's the reason why I asked all these questions to
24:49
understand the background. You know, where she's coming
24:51
from. But anyway, don't worry, over
24:55
time you will learn in the beginning, you think you're, you
24:59
think you're overcharged in the beginning, no problem.
25:02
Start the work first. By the time you handle like 910
25:05
clients, you will learn that you are underpriced.
25:09
You will learn you won't stay there for for too long.
25:13
As for those of you who are in Sophie's situation, but this was
25:15
the biggest problem. Basically she's looking at this
25:19
social media management thing as a side hustle because she
25:23
already has a business in the perfume space and that business
25:27
is bringing in good money. So she just wants to maintain
25:30
this thing as a side hustle. So that's also a problem.
25:32
So she's never looking at this thing as you know, the main
25:35
thing. And of course, I tried to harass
25:37
her the way I harass other people who are trying to float
25:39
two things at the same time, two or three.
25:42
She even tried her own. It's just true.
25:43
There's some people that hit me up, honestly speaking, they're
25:46
trying to float like four or five.
25:50
There's one guy talking to. And if you're listening to this
25:54
right now, you know, is you that I'm taking jobs at the
25:59
businesses that we have reached in town already.
26:01
They don't reach like 1112. So I tried to bully people that,
26:05
look, you know what, we can't really make traction from a
26:07
sales and business perspective until we kill a couple of these
26:10
bad eggs and just pick one. Just pick one.
26:13
Let's make traction on this one first because this whole thing
26:16
about serial entrepreneurship is like this.
26:20
The people who are successful Syrian entrepreneurs, what they
26:22
do is they don't build 4 businesses at the same time.
26:25
You build 1 until it's strong, when that one balance, the
26:28
profit is good, revenues are OK, standard operating procedure in
26:32
place, the team is OK, management structure, everything
26:35
don't set. You will now leave business one
26:38
and then start on business 2. That's how they do it.
26:41
And from 2:00 to 3:00, from three to four like that, like
26:43
that. So I keep giving the example of
26:46
Dangote. Dangote did not start cement
26:48
factory plus spaghetti factory plus sugar factory plus refinery
26:55
all at the same time. In fact he started as a
26:58
transporter from transporter into trading, from trading into
27:03
importing cement, from importing cement into manufacturing cement
27:07
as in small, small, small, small, small.
27:09
So that's how it works. You start first you become
27:12
strong, you crawl, then you walk, you walk, then you run,
27:16
you run then you now do high jump.
27:18
That's how it is. So I tried to harass her pick
27:25
one when she no agree so she she will run the two of them.
27:28
So anyway, no problem. So you know, at the end of the
27:33
day, you can't all I put it so you can lead the horse to the
27:37
river, but you can't make you drink.
27:39
So I freed but this is my own response that is my own opinions
27:47
about all the things that we've been talking about so far around
27:51
pricing. We, I know we've been talking
27:53
for 30 minutes, so I'll wrap it up soon.
27:59
When it comes to pricing, for those of you who are new, this
28:04
thing that I'm saying is going to sound very strange to you.
28:08
But like I say, over time you will learn in the beginning, oh,
28:15
I'm too expensive. You've only had two or three
28:19
clients. By the time you have 10/20/30,
28:22
you will learn that you are underpriced, you're overpriced.
28:28
So what you do is when you come in, you charge what the market
28:34
can accommodate. Let me repeat, you charge what
28:38
the market can accommodate. It's not about you.
28:41
It's not about your feelings. See.
28:44
Well, of course, you know, I'm assuming that you're an ethical
28:46
person and you're trying to do your best, you're trying to
28:49
deliver value, but you charge what the market can accommodate.
28:52
It is called value based pricing.
28:58
If other people are charging 80 to 100 that's on average.
29:04
I know for sure that in that market, definitely people that
29:07
are charging two 5300 like there is room charge what the market
29:13
can accommodate value based pricing.
29:15
We price what the how do I put it, what the market feels that
29:23
it is worth, not what you you think it is worth.
29:26
So if you think something is only worth, you look at the
29:29
thing up, you look at it down, you think this thing is only
29:31
worth 5K. But meanwhile in the market
29:34
people who think this thing is worth 120K, then it's not about
29:38
you remove your feelings from this equation.
29:41
You think it's 5K and so the market thinks it's worth 120K.
29:45
Go ahead, charge 120. You won't be helping yourself if
29:52
you're using your own eye to be selling market.
29:54
It's not about you. The other approach of thinking
30:00
what do I need to live? How do I break even?
30:02
You know that's OK, it's not bad.
30:04
But we only do that in the beginning, you know when we're
30:07
not sure we that's called cost based pricing.
30:11
So you start off with cost based pricing in the beginning because
30:14
you're trying to understand what's going on.
30:15
Ultimately, you're moving through value, value based
30:18
pricing, especially as your skill set improves, You know,
30:22
your skills improve, your confidence improves, you move
30:24
into, you move into value based pricing.
30:26
But whenever I stay at cost based pricing because that
30:29
charging 60K, it might not look like it's bad.
30:33
But The thing is that's just break even.
30:35
That's just survival and it's bad.
30:38
Break even is bad. Survival is bad.
30:40
This is why because for business growth and for personal growth,
30:44
we need the excess. Some of you think excess is a
30:48
bad word, but let's be real here.
30:51
For business growth, for personal growth, for the
30:54
business to grow, for my family to grow, for me to grow, for
30:57
things to be moving, you see how the economy is going.
31:03
For things to be moving correct in One Direction, we need this
31:08
excess is the excess that will allow us to survive and to
31:11
thrive. Is the excess that I will use to
31:14
reinvest in my business? Is the excess I will use to
31:19
train myself? Is the excess that I will use to
31:21
buy material? Is the excess that I will use to
31:24
research and development is the excess that I will use for, you
31:27
know, networking for whatever. We need the excess for personal
31:31
development, for business development.
31:33
We need the excess break even, you know, pay.
31:37
It's not paying you. It's not paying anybody.
31:40
You need the access to reinvest in the business.
31:43
Then you also need the excess so that you can flex and leave that
31:46
sort of life. That's the whole point of being
31:49
self-employed. If we're going to be
31:52
self-employed or run businesses and then we're going to be
31:55
living. Living from how do they say it?
31:58
Is it from pillar to post? I'll be living from hand to
32:00
mouth or whatever they call it. Like what's the point?
32:02
Just go back to paid employment. It's less stressful.
32:08
The whole point of doing what we do is that we want to flex
32:10
wonders of life. We need the excess and it's even
32:16
an access that will provide the incentive for us to continue
32:20
because after a while it's not motivating for it to be grinding
32:24
away, grinding away, grinding away at that 60K.
32:27
Then by the time you finish, the end of the month is there.
32:29
You now pay for DSTV, you go to market, what else?
32:34
You pay school fees. Then by the time you finish, you
32:36
look at your account and then there's nothing there.
32:39
That is the reason why you meet somebody, you know, they say
32:43
2026, my year of this, my year of that.
32:45
You know, they resign in December.
32:47
They're feeling all motivated. You know, the future is bright,
32:51
everything this and this and that and that.
32:54
Then they start in January, by the time you greet them in
32:57
April. So boy, after an hour is
32:58
business, you say, man, this is noise.
33:01
You, you find out that the guy has left business.
33:03
He has gone back into paid employment.
33:05
That's why no excess, no surplus, no motivation, and so
33:14
they fade. Well, ultimately the biggest
33:18
thing that I want to say to Sophie and other people who are
33:21
in Sophie's situation, in case I haven't stressed it, is price
33:26
has nothing to do with you. Price has nothing to do with
33:33
you. If the client think it's a
33:35
reasonable amount, good let them pay.
33:39
It's not about you. Take for instance me one of my
33:43
clients based in Lagos who is in the solar industry.
33:47
To be sure that the sales team on point, I called a couple of
33:50
their customers that some of those people that were pricing
33:53
solar installation 40M50 MI personally, Tavi Shima IED will
33:59
not carry 40 million to buy a solar system.
34:03
I won't. If any of you listening to this
34:06
podcast now you love me and you want to improve my life and you
34:08
say tavish in my WhatsApp, give me your contact details.
34:11
Let me why are you 40 M go and buy solar.
34:13
Let me be frank with you. I will take excuse me, I'll take
34:16
that 40M all right, and then I'll take 5 million out of that
34:20
40 and I'll use it to buy solar system 1 kva because you know,
34:25
it's a small family. It's me and my wife and you
34:27
know, we don't have too many kids running around.
34:29
And then plus 1.5 kva, that's enough to give us power, you
34:33
know, for like, I don't know, maybe 7 or 8 hours or something.
34:38
But basically with the 1.5 kva plus Napa, we should be sorted.
34:42
So I'll take that 5M6M by 1.5 kva now out of that 40369 remain
34:49
happy. I'll use now use that 36 M and
34:51
sort out other things, but I was not looking at me.
34:57
I was not looking at the fact that me, I will never carry
35:00
40M50M and buy solar. If they are good with the
35:04
conversation, if they are good with the system, if they are
35:08
good with the everything, then I'm perfectly fine carrying on
35:11
the conversation because it's about them.
35:15
If they value it, it's about them.
35:16
So don't be using your own eye to sell market.
35:19
You don't use yourself to sell market.
35:21
All the people that sell Bentley remember this car that I
35:24
mentioned that the video bought that the thing made me mad that
35:28
I just left Instagram. I said what kind of rubbish is
35:30
he? See the small boy, he's driving
35:32
car 1 billion naira, 1 billion. The people that are selling that
35:40
work in that shop that sell that car.
35:41
How many of them do you think can drive that car?
35:43
None of them, but it doesn't mean it's not about them.
35:49
I'm sure they think these cars are overpriced.
35:52
That has somebody be dropping 1 billion naira for one car?
35:56
They definitely think it's overpriced, but it doesn't
35:57
matter. Davido is working in there.
36:00
Davido sees this thing and Davido says that's a sweet car
36:05
and then he drops 1 billion naira.
36:06
Bam, say give me my car. It is not about you, Sophie, and
36:13
anybody who feels like Sophie Price has nothing to do with
36:16
you. It is about our potential
36:18
customers. It's about what they value.
36:24
Like take me on my Bluetooth keyboard.
36:28
I don't like doing using laptops.
36:29
I use a Bluetooth keyboard. I hook it up to my phone.
36:32
Some people see me working without my sister-in-law.
36:35
She looks at me and she say tech daddy, tech daddy.
36:37
I'll laugh. And people be, you know, they
36:40
look at me one kind of like see this one, see this one, See this
36:42
one UU. So you will never spend money to
36:47
buy a Bluetooth keyboard. That's for you.
36:50
For me, I value this kind of thing.
36:52
So I buy the Bluetooth keyboard. I have the gaming headset and I
36:57
buy all those other small, small things that I need because me I
37:01
value it. So you, the seller, it's not
37:06
about you. It's not so.
37:12
So Sophie, any other person listening, do this thing that
37:15
you have this kind of hang up, remove yourself from the
37:17
equation. So long as the client thinks
37:19
that is a reasonable amount, if they have the money, if these
37:23
are the kind of monies that they play around with, then please
37:26
remove yourself from the equation.
37:28
Now, these are some other ideas around pricing for those of you
37:31
who are new, we've looked at what have we looked at?
37:36
So forgive me, I lost my train of thought.
37:39
Where did we start now cost based pricing, how much does it
37:42
cost for me to stay in business? OK, it cost me 240K.
37:47
If I'm able to get 4 customers in a month and I charge each of
37:50
them 6060 K, that means I should be able to stay in business.
37:53
OK, let me be charging 60K. That is cost based pricing.
37:59
But then we move value based pricing.
38:02
It's not a matter of how much do I need to stay in business.
38:04
It's not a matter of how much is the market willing to
38:08
accommodate. Those of you who sell gold, you
38:14
know what it is that I'm talking about.
38:18
If the market is willing to accommodate this amount, this is
38:20
what the market is willing to accommodate.
38:22
And that's the reason why some of you who like gold, that's the
38:25
reason why it's possible for some of you to buy gold now and
38:29
then. You know, in five years, 10
38:30
years, you sell it more than two, three times the amount of
38:34
what you bought it for because the market can accommodate it.
38:41
So eventually you move to value based pricing.
38:44
Then there's also tiered pricing for those of us who offer
38:47
services or who are even doing software as a service.
38:52
You know, these kinds of pricing models apply now, OK, for XYZ
38:58
kind of service at this kind of deliverable, you pay this
39:02
amount. If you move to this amount of
39:05
deliverable and whatever will now increase to this amount.
39:09
So it is tiered, it is structured at this level, this
39:13
amount. We move up to this level, this
39:14
amount, we move up to the level, this amount.
39:17
So for those of you who do software as a service, this is
39:19
something that applies to you people, OK, You can use my app,
39:23
you can use my website, you can use my application for your
39:26
business. How many employees do you have?
39:28
You have 10, OK, Because of that, we are charging you XYZ
39:31
per head the moment you guys want to now log in another extra
39:36
five people to the system. So when we negotiated first it
39:39
was 10. If you want to add extra 5, this
39:41
is how much you pay extra. That is tiered pricing or usage
39:47
based. Then there's some people who
39:49
come in with a market penetration strategy.
39:51
Market penetration basically just means you're coming in at a
39:54
low price because you want to grab all the customers in the
39:58
market. You want to frustrate everybody.
40:02
Which are low prices. So they say, you know what, I
40:04
can't compete and then they will leave.
40:06
Then when you leave, you now see if you can Jack up the price.
40:08
Now this is not something that people in the SME space can do
40:14
because it requires scale. So the big, big boys, they can
40:17
be playing all these games, all right?
40:22
So like in consumer goods and stuff like that, somebody can
40:26
come and say, you know what, OK, like these people wants their
40:31
name. I can't remember again.
40:32
Sure, I think you sure. Excuse me?
40:34
Sure. SUREI think they came in during
40:38
during COVID, they started making what's it called,
40:43
sanitizers. They started making sanitizers.
40:45
After a while they started making soap.
40:47
So I think that that was like their own strategy when it came
40:49
to making soap. So you can say you're coming in
40:51
with a low price. You know, people will rush to
40:53
your soap and after a while, you know you're the main soap in
40:56
town. When people think about soap,
40:58
they think about you. You cornered the market,
41:01
everybody rush you after it took a while, you now start trying to
41:04
raise your price. But the problem with market
41:06
penetration strategy is you know it's hard.
41:08
You need the scale. And then in sales and business
41:12
development, we say that people come as they go.
41:15
You know, they even say it in relationship too.
41:17
Now somebody will say that why are you surprised that she left
41:20
you, you know collector from somebody's hand, there's no
41:23
money you use and collector from somebody's hand, another person
41:26
has come with more money, so the person has collected from your
41:28
hand. So it's the same thing.
41:31
If they come on price, they will live on price.
41:35
Customers that you have because you're using market penetration
41:38
strategy, you are using the low price to attract them.
41:40
If another person comes with lower price, you know some of
41:43
them will move. So it's not an easy strategy to
41:49
execute Basha when you're coming in brand new into an industry.
41:53
These are some of the frameworks around pricing.
41:55
But ultimately, I just wanted Sophie to know and anybody who
41:58
is in a similar situation to know that price has nothing to
42:01
do with you. You don't use your own eye to
42:04
judge how it is that you sell market.
42:07
You don't, You don't. That's the reason why if I'm
42:12
selling solar, I can have a comfort conversation with
42:15
somebody comfortably. If we, even if we're talking 120
42:19
million, like I have a conversation with someone
42:21
comfortably because even though I know I will never spend 405120
42:28
buying solar equipment, I know that it's not about me.
42:32
What is this guy trying to achieve?
42:34
What kind of system, what kind of power outputs are they trying
42:38
to achieve? What is the problem that they're
42:41
trying to avoid? What is the vision that they're
42:43
trying to achieve? If at whatever vision they have,
42:52
this is what the corresponding price is going to be.
42:56
You know, it is what it is. If they like it, the
43:01
conversation will continue. If they don't like it, they will
43:03
move. But either way, there will be
43:05
another person. And in fact, when I was brand
43:11
new and this hadn't sunk in yet, I heard, I heard was it Grand
43:18
Cardone? I can't remember.
43:19
I think it was Cardone. He was talking to somebody and I
43:21
heard him ask the person. He said, is there somebody
43:25
selling it at this price? And then the person was quiet.
43:29
I can't remember what the service was.
43:31
What do I talking price say is there somebody sending at this
43:33
price? Personal squat, He say, answer
43:34
me now. Is there somebody saying at this
43:36
price place and say yes, say which business is that?
43:38
You call the business name, you say and that's it.
43:40
I don't need to know anything more.
43:42
If there's somebody sending it at this price, you can sell it
43:44
at this price as well. So instead of us sitting down
43:48
here talking about overpriced, underpriced diseases that that
43:52
that are there people selling at this price?
43:54
Yes, they are. That means it can be sold at
43:57
this price. So we're better off spending our
43:59
time figuring out how can we sell at this price.
44:03
Oh please, those of you coming in brand new into the space, you
44:06
know, stop using your own eye to sell market.
44:09
Stop thinking that you are over charging.
44:11
Even if you honestly do. By the time you have done Jackie
44:14
work, you have done slave work for 2030 customers.
44:18
You, you yourself, you wouldn't know that you have to raise your
44:21
price or you resign or you stop this business and go back into
44:25
paid employment. But on a personal note, Sophie,
44:30
if you're listening, I'm still insisting pick 1.
44:35
And in my own opinion, the perfume business is moving.
44:40
Kill the social media management business.
44:42
Kill it now. Perfume business is moving.
44:46
Double your attention on this perfume business and get good,
44:50
good returns there. This social media management
44:53
thing is a distraction. The money is not even sweet.
44:58
The money is pale in comparison to the perfume money.
45:01
Why are you wasting your time here?
45:02
Kill the social media management thing.
45:04
Focus on this perfume thing, Blow this perfume theme up, blow
45:08
it up and enjoy your life. So that's it and that's all.
45:11
Thank you very much for listening to the podcast.
45:15
Remember, if any of you would like to connect with me because
45:17
you have questions, comments or queries, then the number to call
45:21
to send me a text message or a WhatsApp message is 08064662140.
45:30
Thank you very much for your time and attention.
45:32
I'll catch you guys some other time.