“Sometimes it’s just as simple as asking for more.”
These are words to live by in life and in pricing for your business. Most young businesses start out underpricing. This happens for a variety of reasons by design, lack of confidence, untested offers, their offers often have lower value. But most come to a point in time where they know they must raise their prices. That’s when fear often gets in the way. Reality is if you don’t test the waters and ask for more you’ll never know what’s possible.
My guest in this episode has done it himself and seen it with his clients, sometimes you simply have to ask for more. Test your new prices and see what happens. Then test it again.
In This Episode
I sat down with Bob McIntosh, Co-Founder of 3 Degrees Consulting. Bob is a national speaker and entrepreneur having spent over 3,500 hours on stages and helped more than 15,000 people across the US, he’s a #1 Amazon best-selling author and has been personally responsible for helping thousands of entrepreneurs generate millions in profits through digital marketing.
He shares with me his own pricing journey and behaviors he sees in his clients that get in the way of their pricing. That and so much more, so you’ll have to give it a listen.
If you prefer to watch the live video head on over to my Youtube channel. Want to skim the transcript, then simply scroll down below.
Podcast Episode Highlights
- 00:00 Intro
- 1:58 Getting to Know Bob
- 3:13 The Value Bob delivers clients
- 5:35 How he started
- 7:10 Pricing at the beginning
- 11:39 Internal thinking
- 15:39 Asking for more
- 19:37 Biggest takeaway & wrap up
“The first approach to pricing was I’m not worth very much. I guess I’ll just charge this little amount, which is barely even covering my expenses like software and things of that nature. That was literally where we started.” Bob
“…(starting low) allowed me to get a lot of folks in initially, get some good testimonials so that, my confidence developed in, what we were offering. I started to be able to say, I’m actually getting really good results for people.” Bob
“Some advice that I got from a mentor was (for) every new proposal, double your price. So you start to get pushback. I was like, oh, that’s, that’s an interesting way. And by the way, I did not do that…I would increase them 30 to 50%.” Bob
“Often the biggest limitation is our own thinking.” Janene
“…another thing I see a lot is they just assume that they’re correct on the price and they never actually take the time to ask the questions. Would you have paid more? Would you pay this?… Test it.” Bob
“This is 100% true for me. The more I have worked on my mindset and my personal development, the faster my business grows… the more that I work on me. The more results I end up seeing in everything that I do.” Bob
How to connect with Bob
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Janene: Bob, why don’t we start with a few rapid fire questions? The first one is where you joining us from today.
Bob: I am located in Austin, Texas USA.
Janene: I love Austin. Great place. If you haven’t been there, it’s definitely a place to go and visit. Next question. What is your superpower?
Bob: My superpower is making technology seem easy for those who are not technology-related and helping them understand it in a way that’s understandable.
Janene: Yeah. Excellent. Next one. What’s one interesting thing that people who know you don’t know?
Bob: Interesting thing that people who know me don’t know. I don’t share a lot in a lot of people who probably have never heard of this, but I actually failed out of college. Because I hated what I was doing and the degree I was in or going for, and it was miserable.
I just didn’t like, I didn’t put forth any effort. And I eventually I went back to the same school when I graduated. But they kicked me out for a year and I was, it was a rude awakening of, okay. Like I gotta focus on things that make me happy.
The Value Bob Brings His Clients
Janene: Excellent. That’s a good philosophy to follow, but not always an easy one. A lot of people are pushed in one direction, because they don’t really know what they want.
Thank you for sharing that. One last question can tell us what you do and what value you really bring your clients?
Bob: It’s a great question. What my company 3 Degrees Consulting does is digital marketing. Primarily, paid advertising, SEO, and website design. The value that I bring is my passion. I don’t mean “Hey, I’m just passionate” and that’s the value itself. It comes from my knowing what’s current. For example, when Google does a new algorithm update, I know what’s going on and what it means for my clients.
I want to understand all the things. I follow, all the people that talk about these things. Because of that, I won’t say that I’m necessarily the most knowledgeable person in digital marketing, but I know I have a lot more knowledge than most. I’m always aware of what’s going on and can say, Hey, look, this is gonna be a huge benefit to you as a client.
Janene: Excellent. What does that ultimately bring them?
Bob: Ultimately brings better results. So, like it’s at the end of the day the internet specifically is continuously changing. There’s always new ways. Right now, Tik Tok ads are blowing up. In fact, I just read there was four major companies that have historically always run super bowl ads here in the states. This year was those four companies didn’t run super bowl ads. Instead they took all the money they’re putting it all in the Tik Tok ads. I can help my clients know where the market’s going and what opportunities they can leverage.
How Bob Got Started
Janene: Excellent. Thanks for sharing that. Why don’t we go back to the beginning, I’m curious how you started your business.
Bob: My dad was an entrepreneur. I grew up in that space. He sold antique auto parts for forwards in the 1909, the 1970 super niche. I had that entrepreneurial bug. I got a job but I am what they call unemployable. I’m not a good employee. I started with my dad, after he sold his company, we started doing real estate. In that process I was living 3000 miles away.
I can’t physically be there to see the houses and do these things. So what can I do? So I got very good at digital marketing.
It worked very well for our company for a long time. That passion led me to where I am today, I primarily help companies with digital marketing. I have a lot of fun in it and to be as transparent as possible, one of the things after having a job that was important to me was time and location freedom. It’s important to be able to go spend my day, how I wanna spend my day. Live where I want to live or travel when I want to travel and not have to worry about requesting time off or can I get approval for that or things of that nature.
And so, digital marketing allows that to happen because as long as they’ve got internet and a laptop, I’m good to go.
Janene: The entrepreneurial dream. The other part of the entrepreneurial dream.
Bob: Not an easy dream to achieve. I will be honest, but, I’m there now and it was worth all the hardship to get here.
Pricing at the Beginning
Janene: Okay. Excellent. Bob, when you first started in your business, what was your approach to pricing? Or how was that for you?
Bob: Yeah. The first approach to pricing was I’m not worth very much, I guess I’ll just charge this little amount, which is barely even covering my expenses like software and things of that nature.
That was literally where, where we started. Right. Here’s the funny part, at the time that I started the agency I had been on stage for, well over 3000 hours, teaching people, about digital marketing. I had a pretty sizable following, of people who know me for digital. There was still this insecurity of I’m new in the space. Why would they want to listen to me? So that was where we started. And then like, like most people was like, okay, well, I, I can barely even pay my software bills, let alone pay myself. So I had to start increasing the price from there.
Janene: Right. And that was, so that was really, you just wasn’t profitable enough and. That’s something had to change there.
Bob: Yeah. And I obviously, the profitability part was, is the hardest part when you’re doing that. But at the same time doing it that way allowed me to get a lot of folks in initially, get some good testimonials so that, you know, and then my confidence developed in, in what we were offering, I started to be able to say, Hey, I’m actually getting really good results for people.
Doubling Prices Terrified Me
I know my value is there. I was okay to raise it. Some advice that I got from a mentor was (for) every new proposal you do for a client, double your price. Until you start to get pushback. I was like, oh, that’s interesting. And by the way, I did not do that.
Not exactly. I didn’t double prices, I would increase them by like 30 to 50% each time. Doubling, it terrified me. To be real. Like it was just like, oh my God, I can’t charge that much. Can I? Ironically, now, here we are, after three years of doing just this. The prices are at a point where it’s like, okay, I feel, I still think we’re probably on the lower end of the market. But we’re after growth and market share right now. So I’m okay staying a little bit lower while we do that.
Janene: Okay. Do you think the underpricing was driven by confidence or more by the actual value you delivered increasing with time?
Bob: No, it definitely is both. It’s a lot of relationships, right? We’re having a one-on-one conversation. I’m talking to somebody we’re going to. I need to understand your business and then, you know, go from there. And because of that, the more that I understand what your pain points are, I can tweak my offer to fit the family.
Digital Marketing is the Same for Every Single Company in the World
Bob: Digital marketing is the same for every single company in the world. The only difference between it is my messaging, maybe the platforms that I choose. The pricing, obviously, and a few other minor things that are specific to your business. But the process that I use to get you results, like if you want to run paid advertising, it’s the same process, right?
The value has to be, can I solve your pain point in a way that is A believable to you that I can, B in a timeframe that’s going to make sense for you to do that, and C in a way that you’re comfortable doing. And if I can do all three of those things, then my price can go be much higher because the belief is there of solving the pain and people will pay a lot for solving a pain as I’ve started to find out.
Janene: Three excellent points. And I think, as you said for most services, it comes down to the same thing, applied in a different context. Right.
Bob: Yeah, absolutely. Now I do want to touch on, e-commerce stores. that’s a little bit different, right?
Because I’m not having a one-to-one interaction, they’re interacting with my website or to the client’s website. And in that case, what becomes interesting on pricing is you really have no idea what pricing is going to work. You have a rough idea based on other people in the market initially. What’s been interesting are the pricing plugins that will show different prices to different people and then track and optimize.
Which is a fascinating experiment to run. & often brings surprising results.
Janene: Yeah, but I think, I think it goes to a point and I’ve seen this in big companies and in small companies alike and everything in between is that. Often the biggest limitation is your own internal thinking.
Bob: A hundred percent.
Janene: Yeah. And I did a study a long time ago. And we were looking at what does the customer think of our value and our positioning? How do they rank us versus the competition? But before we did ask the customer to do it, I had the sales and the marketing team and the finance team internal team do it.
And then we compared what we thought internally with what the customer said. I’ve done it several times before, but I remember this one, particularly because it was the first time that it showed such a huge difference in the way that we perceived what we thought the customer thought, right. Versus what the customer actually thought.
Bob: I don’t think between people actually take the time to ask their customer, right. Like to figure it out or to at least test it. Right. I think that’s, that’s another thing I see a lot is they just assume that they’re correct on the price and they never actually take the time to ask the question.
Would you have paid more? Would you pay this? What would you do? And, or I guess I’d like, like we did. Keep raising our price until somebody get pushback of that. That’s not worth it to us. I go, okay, well now we know where that threshold is. Instead of 30%, can we do 15%?
Okay. Now can we do 10%? Oh, it’s 8%. That was the number. Right. Perfect. Now here we are.
What Customers Really Value
Janene: You’re right. I think, not enough people take the time to really understand what their customers really value in terms of, most people say, put price in the top three of what their customers value most.
And when I’ve done the research, a lot of times, it’s not even in the barely in the top 10, if in the top 10 at all. Yeah, it’s stacked against other things. When you have to, when the customer actually looks at it in relationship to how does this rank to the service you provide or to the actual product itself, or, all these different criteria, price can quickly fall. But it depends on who you’re targeting in the end.
Bob: Yeah, totally something that I thought was very interesting. I think it was one of my coaches maybe taught me this. I don’t remember where it came from, but they said one of the interesting things, especially for new entrepreneurs, is money is always tight, right?
Like, because you’re running on it even if you’re well-funded even if you have a big savings account, right. You’re not seeing a lot of revenue come in. So you’re focused on the money. And so then what ends up happening? Is because your focused on the money, you assume everybody else is focused on the money.
All of a Sudden Pricing Becomes Part of the Top Three
Bob: And then all of a sudden pricing becomes, the, like you said, in the top 10 or five or three, because it, in your mind, you’re, you’re worried about the money aspect, even though they’re not, cause they’re coming at it from a different point of view. Again, I don’t remember who shared that with me, but it was like, it was a huge eye-opener for me to, when we were early on in our business.
Holy like, wow, you’re right. Like, I am like, I’m thinking about that. And I was like, and it’s funny, like, I just, it’s funny. I just had a call yesterday with a client and she’s like a wellness doctor. She does a lot of interesting, unique things, not the standard stuff and a member where we actually tested out a new offer with her.
And she was like, okay. Yeah, that, that’s why it makes sense. I can do that. And I remember just thinking about. Well, for us, that was like a stretch offer I didn’t, I didn’t know if it was gonna take it, but we just framed it the right way. I said, Hey, here’s the things that you’re, that you’re not getting from the people that you usually work with in this space.
Here’s what we’re doing for you instead. And we’re going to offer all those things and all of a sudden, price became… she was like, I probably could have charged more realistically. And she probably still would have said, yes.
Janene: I always tell people that the price is only relevant in the context of value. And, if you’re not steering or at least helping your customers understand the value, then chances are, they are seeing it as much less than, than it may be.
Asking For More
Janene: Interesting. So one of the things that we, we, when we talked before that I thought was really interesting, that you said was that sometimes it’s just as simple as asking for more. Can you tell us a little bit more about that?
Bob: Yeah. And I think that comes back to that advice that, you know, we talked about from my mentor, which is, is that, I think, and I see this with some of the people that I’ve coached and I’ve worked with, I see this with some of our clients. And I know for fact it was true with me, which is, you know, our mindset gets in our way.
We just need to do that. And look, the thing about pricing, no matter what you’re doing, and it doesn’t matter whether you’re selling a physical product or you’re selling a service, you’re selling anything. Everything’s in negotiation really at the end of the day. Right? Like, especially if you’re a new business now, obviously like I always joke, like if you walk into Starbucks and trying to negotiate, maybe not, but you’d be also surprised there too.
I simply ask, oh man, it was a great day. Any chance I can get my coffee for free. Probably about one time out of 20. I’ll get a free coffee. Right. And it’s not, it’s not a huge thing. It’s not a big deal, but it’s simply making the point to ask. And I, and I say that because you look at a Starbucks or any coffee shop for that matter.
If You Don’t Ask the Answer is Always No
Bob: Right. You think, there’s no way that they’re going to do this for me. But if you don’t ask the answer is always no. Right. And so I think simply asking, opens the door. If the price is too high, someone will say no, You still have the chance to adjust.
One of the things I love, especially with what we do in digital marketing is even if I have an e-commerce store, and we jack the price, that we’d double or triple the price on a product. And usually the client’s like, oh my God, can we do that?
And it’s like, well, My sales are dropping. Okay. That’s okay. but if you’re making more money, as long as that equates out to a higher end value, you’re better off. Right. And I, and the other cool thing is, especially these days with, and in a way the pandemic has helped this a lot. Is that when someone’s either comes to our website or even if they come physically to our store, there’s way to ways to do this as well. I have the ability to re-target them later on. So for example, let’s say I normally charge 20 bucks for this product, and now I’m charging a hundred dollars and I see no one’s getting it. I can always re-target them later with an adjusted price at like 75 or 50 or whatever, and they might go, oh, wow, okay, great. Now I’ll now take action.
So ask. Try. Cause if you don’t, the answer is always no. And you might find that you’re surprised a lot of our clients a lot of times. Cause you know, when we do digital marketing, A lot of it is we’re, we’re helping you pay for customer acquisition, right?
The Most Expensive Part of the Business
Bob: It’s the most expensive part of your business. We gotta do whatever we can to maximize the value of each customer coming in, because you’re paying for that customer to come in. So the more that they spend, and there’s, there’s a lot of ways. By the way, this yes thing like asking about pricing also includes not just the initial offer, but the upsell. You’ll be surprised when someone buys something, how much more they’ll buy and they’ll buy more of the same thing.
A lot of times they’ll buy multiples, they’ll buy more hours, more thing or something that’s gonna compliment it. So that’s another big thing that we’ve learned is okay, great. You got paid ads. Now let’s talk about, you’re in the door, you’re already going for that. Let’s talk about SEO. Let’s talk about that.
Here’s other things that we can do for you, right. And once they’re in and they see what you have to offer, they’ll be back.
Janene: Right. So, that’s a very good point. I was coming to it, but you beat me to it. Yeah. That value side of the price value scale is much easier to navigate on that side. And then once you get that first sale in you open the door to more opportunities, as long as you’re successful do what you committed to doing.
What Bob Wants You to Remember from Our Discussion
Janene: Bob, we’re going to start wrapping this up now. I’d like to ask you, what is it you think people should take away from our conversation today?
Bob: Whatever you’re charging right now. Raise your price. 5%, 10%, 50%, a hundred percent. I don’t care what it is. Just raise it up and test. Maybe, maybe you can’t. It’s very possible, but you won’t know unless you do. Have the confidence to know that if you raise the price, you can always come back down.
Bob’s Business Advice for You
Janene: Yeah, absolutely good advice. What’s the best business advice that you’ve ever been given?
Bob: Some of the best business advice I’ve been given is understanding your mindset. I was given a book which ties into mindset: Mindset, The New Psychology of Success by Carol Dweck.
It totally changed how I started to look at things. If your mindset is in the right place, you can do anything. This morning’s been a complete disaster for me. My car got towed. I left my laptop charger at my girlfriend’s place. Everything that could go wrong this morning has gone wrong, but it was funny.
She was driving me back to my place. And she’s like, why are you so calm? I said, “Look, we still got on here. I’ve still been able to have this conversation. Like, Hey, we’re, we’re good.” Toughening up your mind and understanding that, that is going to determine everything else you do is the most valuable advice I’ve ever gotten.
An Umbrella of Optimism
Janene: Wow. Thank you for sharing that. I liken it to the umbrella of optimism in a rain shower of pessimism.
Bob: I’ve never heard that before. I like that a lot. Negativity spreads way faster than positivity does. You’re going to be standing in a deluge of rain, right. It’s going to be pouring down on you constantly from all the directions. The wind’s going to be whipping at you. People have a vested interest in keeping you where you are. They’re going to do what they can to do that. Your mindset has to be tougher than that, or you’re not going to make it.
You’ll eventually quit because, entrepreneurship and all of the stuff that we talk about is the toughest path to go down. The most rewarding, but it’s also the toughest. That’s why there’s only a few of us.
Janene: My biggest learning is that starting your own business is a personal development journey, not a career one.
Bob: Oh my gosh. Yes. Right. This is a hundred percent true for me. The more I have worked on my mindset and my personal development, the faster my business grows. It’s fascinating to me, but the more that I work on me, the more results I end up seeing in everything that I do.
Wrapping it Up
Janene: There it is ladies and gentlemen, and you beat me to my last question. You already mentioned the book from Carol Dweck. What was that called again?
Bob: The Mindset, the New Psychology of Success. Actually I want to… real quick point. There are a ton of mindset books out there. That are like, just be strong, you can do it. Think positive. Yeah, I get that. But it in a way it’s BS, right?
What I like about her book is it gives you a very tactical approach. And it’s backed by a lot of studies and data points. It shows you here’s the things that you can do to have a growth mindset. I found it to be almost tactical in its action. That is something that is in my opinion lacking in a lot of the personal development world. It’s actually actionable advice.
Janene: Yeah, that’s great. I use her research in some of my programs as well. It’s interesting, simple and practical.
Bob: It’s filled with fascinating ideas and thought experiments, it’s not just theory. Action is what allows for the law of attraction to take place. Cause you actually have action behind what you’re trying to track.
Janene: Right? Isn’t it. Tony Robbins says that action brings results, something along those lines. Excellent. Thank you Bob so much for joining me today. It’s been a real pleasure talking with you.
Bob: Absolutely. Thanks for having me on.
Janene: Thank you very much, everyone. If you’d like to find out more about how to get better at pricing in your business, then head over to www.thepricinglady.com and Book a Call with me there. Have a great day and as always enjoy pricing everyone.