Pricing in Your Market

Matt mentions the book Monetizing Innovation: How Smart Companies Design the Product Around Price, which helped Barbell Logic think about, test, set, and change prices for its services.

Price is crucial, but before there is a price there is someone who is paying that price (spending that amount of money) for the product or service. Who are those people are what problem of theirs are you solving? Who are your competitors in the market, already attempting to solve this product (if any)?

As a coach, you may initially grab clients with a big net (i.e. whoever walks in your gym doors) but over time you will likely and should find that you have a niche.

This niche may be a group you particularly like to coach, a demographic that for whatever reason seems drawn to your product or service, or one which you have an aptitude for. Own that niche, but be prepared to expand beyond it (while never forgetting it or continuing to serve it).

Consider also the total addressable market (TAM). This is the entirety of the market you're addressing. For example, TurnKey Coach's niche is burnt out coaches, though it can also greatly aid burgeoning coaches. It's TAM, however, is anyone who coaches to any degree online.

Pricing - Conceptualizing and Testing

Remember, you're running a business. Discussing money and price can make people uncomfortable, but it's important.

You need to provide more perceived value to your customers than the price. You need to dig down into the perceived value of your service and how people perceive the price. Your business needs to make money as well.

You will likely want to test your service and pricing with alpha or beta testers. This might initially mean your family.

Provide the service you plan to provide. Talk to these early clients about competitors they are or have used. Ask them the following questions (first about the competitor, then - once they've received your service - the same questions for your service).

• What price are they / did they pay for the service?
• What is an acceptable price?
• What is an expensive price?
• What is a prohibitively expensive price?

Then, ask them how likely they are to buy the product, on a scale from 1-5. Only about 30% of the 5s will buy the service. Only about 10% of the 4s. 3s and belows will almost certainly not buy the service.

Ask they why they would buy the service (or why not)? Ask the awkward conversations. You have likely charged these people nothing or a very low price, so just be honest that you're trying to improve your service and really want to hear what they valued (and what they did not).

Lastly, when it comes to pricing, 1-2 prices is probably too few and 5-6 is probably too many (so 3-4 is probably right).