052. Specific Mindset Techniques To 10X Your Prices — With Kyle Tully

Short answer

Kyle Tully says most buyers aren't choosing on price alone, so a professional who can show the value of the work can charge far more. He recalls research suggesting only 10 to 20% of buyers put price first.

Most of the fear about price sits in your own head, he says. Ask clients about their goals and what a new client is worth to them, practise saying your price out loud, and add a higher package before you touch the old one.

Key takeaways

1. Price is rarely the only factor. Buyers also weigh the results you can get, how quickly, and whether they know, like and trust you.
2. Ask how they arrived at their budget. Questions about revenue, leads, what a new client is worth and how long clients stay show what the work is really worth to them.
3. Sell a solution to a specific market. Kyle says one student moved from $2,000 to $3,000 websites to packages of $30,000 and $50,000 for surgeons, delivering much the same work.
4. Practise saying the number. If you've only ever quoted $3,000, he says a bigger figure is hard to say with confidence, so rehearse it in front of a mirror.
5. Add a higher package first. It carries little risk, because anyone who says no can still buy what you sell now.

See it in practice

Kyle's first pricing question is what a new client is worth. This 5-minute worksheet works it out for your practice: What is one client worth?

Read how a Sydney strata lawyer used a podcast to win better clients: How independent professionals use a podcast to win better clients.

Kyle Tully is the founder of consultingtycoon.com. He’s a direct response copywriter and a marketing consultant who specialises in online lead generation, past customer reactivation and business growth strategies. He’s trained hundreds of people to do what he does which is creating extraordinary income in record time.

 

 

 

Resources Mentioned

• Book a call with Ash
• kyletully.com
  
  

Transcript

Machine transcript, lightly edited for reading. Speakers aren't marked. The cold open, intros, plugs and closing voiceover are left out.

Welcome, everyone. Today I'd like to welcome the founder of consultingtycoon.com. He's a direct response copywriter and a marketing consultant who specialises in online lead generation, past customer reactivation and business growth strategies. He's trained hundreds of people to do what he does, which is create extraordinary income in record time. I'm delighted to welcome Kyle Tully from consultingtycoon.com. Welcome, Kyle.

Hey Ash, thanks for having me, mate.

Great to have you on the show, Kyle. I've watched quite a few of your talks on SuperFastBusiness and Fast Web Formula, as it used to be known, and I've just been very moved by what you shared. So today I would love to talk about why pricing isn't the only factor when it comes to making a high value offer to a customer. This is something I have struggled with myself, and a lot of other business owners I know struggle with. They always worry: is my price too high, am I going to get outpriced by the competition?

I recently heard some things you had to say about why pricing isn't the only thing in a customer's mind when they're making a decision, and I would love to explore that in further detail with you.

Yeah, sure. I think it's a really important topic. I know a lot of people who struggle with this as well, really struggling with charging high prices and justifying high prices to themselves. It seems very common. I certainly struggled with that early on in my career as well.

So a lot of it is a mindset thing, isn't it? Like you say, 90% of this is in our heads. The client, 90% of the time, isn't thinking just about the price. They're thinking about a whole lot of other things, like: is this the right time for me to buy this product? Does it fit into my way of selling? For example, the client may be more lead generation driven versus more sales driven, so it's about whether your offer fits well into their sales cycle.

Yeah, there's actually dozens of other factors that come into play. I can't remember how long ago it was, probably ten years ago or something, I saw some research on the factors people use when they buy. It was something like 10 to 20% of people, their primary factor was price. So that means 80% of the market isn't primarily price focused. But even for the ones that are primarily price focused, there's still a dozen other factors that come into play.

Things like the results that you can generate, the time frame that you can do things in, whether they know, like and trust you at all, whether they're confident in your ability to deliver. Even things like, you're the guy in front of them right now and they need a solution right now. There's lots and lots of other things that come into play.

And this is so important, because one of the key focuses of this podcast is helping businesses increase profitability. If you think about it, if you're lowballing your offers in terms of price, then you're hurting yourself in terms of profitability from the get go. So if you are bringing a lot of value to the table, and you are really adding value to your customer's business, then you should be very comfortable about asking for a price that is commensurate with the value that you're offering.

And that's exactly it. That's one of the key philosophies that I've really found impactful for my business, and that I try to get across to my students as well. You've got to sell based on the value that you can provide to your clients. If you are confident in delivering value, and you're confident in the product or service that you deliver, then by pricing and selling based on that value you actually attract better clients into your life, who are buying based on the value that they're getting rather than some arbitrary cost figure.

Working as a consultant, that's what I often found. The cost figure someone had in their head was largely made up. It didn't really make any logical sense. Someone says they've got a budget of $3,000 for a website. Now, that website might have the potential to bring them $300,000 a year, so why this arbitrary budget of $3,000? Wouldn't you rather spend $5,000 and get something that's going to give you the results that you want, rather than $3,000 for something that may not work at all?

Right, that's a great point. If a business is offering their services, say in the web development space as an example, and they're building websites, they need to understand the client's decision making process around the price they've arrived at that they want to pay for the website. And then say, well, how did you arrive at this $3,000 number? Help them work through that, and say, well, if it's going to get you $300,000 in revenue, does it matter whether you pay $3,000 or $5,000 today?

Yeah, exactly, and that's the conversation you want to be having with people. Now, obviously I teach consultants, and something that a lot of new consultants struggle with is having those kinds of higher level strategic conversations with businesses. Someone comes to them, and they're what seems to be a fairly successful business owner, they've got a business doing a couple of million dollars a year, and they tell you they've got a budget of three or five thousand dollars or whatever for a website.

A lot of people just take that and run with it, and don't question it. They don't ask them how they arrived at that figure. They don't talk to them about what their actual goals are, what kind of results they want to generate, what time frame they've got, all these other more strategic questions that really get to the heart of why they actually want this thing. Because look, at the end of the day, no one really wants a new website. They want the result that website is going to give them.

Whether that's impressing their board, or impressing their wife, or generating leads, or making sales, or improving conversions, there's always a reason behind the surface level thing of "we need a new website". By getting to those core desires that people have, that's when you can really start to find what people are really buying, those deeper core things, and charge based on the value you provide. Which is astronomically more, in most cases, than what their arbitrary budget seems to be.

And you just made a really important point, Kyle, because you talk about business partnering. This is so important, because unless you can align yourself properly with the customer's strategic intent, and show them that you can deliver results, they are always going to see you as the web guy versus a business partner. Unless you can talk in terms of results, and talk in terms of tangible value that they can see, you will be seen by them as a web guy rather than a business partner.

So that's another really important thing, isn't it? When you are creating a high priced offer, you need to be clear about how you're going to position yourself as a partner in the client's perception.

And you know what the flip side to that is? If all you're talking about is the website, then you don't deserve to be a partner who sells something for a high value, because you're not bringing that strategic point of view to the table. All you're bringing is a new website, right? Whether the clients intuitively know this, or whether it's just the way things go, they shouldn't pay more than X number of dollars for someone to build a new website if all they're getting is a new website.

You can spend $5,000 on a website that literally does nothing for your goals. Your goals might be to impress the board of directors. In that case, building a website that generates lots of leads but looks really ugly might make sense from a dollars and cents point of view, but from an impressing the board point of view it might not do anything, and the client might not really get what they wanted.

So you've got to take those things into account. You can't expect to be treated like a strategic partner, and get the financial rewards that strategic partners get, if you're not actually bringing strategic advice to the table. That's why this line of questioning is so important. It's not just so that you can charge more. It's so that you can actually deliver more value based on what the client wants, and not based on your own preconceived ideas of what they should want or need.

Okay, and a good tip here, actually, that just occurred to me. When you're positioning yourself as a strategic partner, you've got to think of what you're offering as a solution versus a commodity. If you're trying to sell them a commodity, which is just a website that converts and has a lot of leads and clicks and so on, you are selling them a commodity, and that's when you're not positioning yourself as a partner.

If, however, you're positioning yourself as a partner, you're saying to them: okay, I am going to help you, as you said, impress the board, deliver a greater amount of business growth, deliver high value customers, a better sales funnel, a better solution to grow your business long term, and this is how this website fits into that bigger picture. That's when you're talking like a partner rather than a person selling a commodity. Is that correct?

Yeah, exactly. There's always going to be room for people who are selling commodities, and there's always going to be price pressure on the people selling those commodities. So there's always room for those people. But if you want to move above price, and start selling based on things like value and what you can actually provide to the client, then you've got to start having those strategic conversations.

Okay, let's talk a bit more about value based pricing, because that's something that is very important here too, isn't it? We need to get comfortable with the idea of what value we are delivering to the customer, and get the customer to share that with us or bring that up in a conversation, so both parties are clear about how much value we are bringing to the table. So how does a person do that with their prospect, to position themselves as a person delivering value and as a strategic partner?

Sure. There's a couple of factors I look at. The first one's actually my own time and energy involvement, the opportunity cost, you could say. That is, what's the value of me building this thing, whether it's a website or an AdWords campaign or whatever it is for a client? What's the approximate value of that if I were to do it for my own business? If I can't charge that much or more to the client, then I've really got to question whether I should take this client on board or not.

So that's one of the first factors I look at when pricing my services: hey, look, if I did this for myself, could I make more money than selling it to someone else?

The second thing is the value based factors, which is having conversations with a client about basic things like what kind of revenue they've got, how many leads they're generating, how many leads they'd like the new website to help them generate, what a new client is worth to them, how long clients stick around for, what's the lifetime value of a client. With these kinds of numbers, that's when you can take someone's $3,000 budget for a website and have them tell you that the new website has the potential to bring them millions of dollars of new clients over the next five years.

And now, when you position what you're doing as an asset that helps them generate those millions of dollars, whether they pay three thousand or thirty thousand is largely irrelevant. It just becomes a number at that point.

That's exactly it. And like you mentioned at the start, a lot of these thoughts and feelings and concerns we have with numbers are in our own heads. They're not in the head of our prospect. Again, I work with a lot of consultants, and a lot of consultants haven't ever owned a multi-million dollar business. So they have different ideas about price and money than the business owners and the clients that they're working with.

So you've got to step outside of your own head, and realise that just because you think or believe something about a certain dollar figure doesn't mean that that's true. It's just your perspective on things. People who are playing with a couple of extra zeros, they're playing a different game. They think different things, and many, many times the money worries that we have are largely irrelevant to them.

Something that just occurred to me is, as consultants, we often project our own anxieties about the difference between, say, $3,000 and $30,000, and we say, of course they would rather have a $3,000 service than a $30,000 service. But if you think about it from the other side of the table, they're probably thinking: okay, this person's in front of me. They're delivering me $300,000 of value, or they're saying that they can do that, and I'm convinced they can do that. I would rather just pay the $30,000 and get the transaction done now than go hunting around for someone who might be able to do the same thing for $3,000.

This is where we've eliminated the price as a decision making issue from their perspective, because we're there in front of them and we've demonstrated the value. So we should feel comfortable about saying, okay, this is what it's going to cost you, and be fairly confident that they will say yes.

Yeah, the price discussion cuts both ways. Someone may be used to spending $30,000, $100,000, a million dollars on various things. One of the businesses I used to work for as an employee bought a new software system, and it was $1.2 million or something. If you try and sell a website to that business for $3,000, they're not even going to take the meeting. They're not even going to speak with you. You're not even on the right playing field. You're playing a completely different game to them, and you've got to take those kinds of things into account.

Sure, sometimes someone who can only afford $3,000 for a website will never pay $30,000 or $100,000. But there are plenty of people out there who are spending that much or more on websites, and you've just got to understand that there's different games being played and there's different levels that you can come in at.

Now, there's another really important point that you made in one of the talks. You said the price that you charge also attracts a certain quality of client. This is something our common friend James Schramko talks about as well, and it's a really important point that I want to impress on the listeners. Generally, people who are squabbling over very low priced products or consulting offers, or whatever it is, are often the worst clients, and the ones who are playing in the big league are often better clients. Can you talk to us a little bit more about that?

Yeah. I've seen this from a thousand different angles, and it's almost always true. It seems like the less someone spends with you, the more of a problem they are. And I think there's a lot of reasons for that. There's some very basic reasons. If someone can only afford $100 for a website, there's probably good reasons for that: mindset reasons, success reasons, et cetera.

There's that old thing that you get what you pay for. I think people who have been around the block a few times understand buying based on value, and they're used to doing business that way. They understand you can't get a good website for a hundred bucks or five hundred bucks, or it's very, very difficult to do that. They'd rather pay more money and get the thing that they really want, because they know from experience that when you try and cut corners and spend a little less, you end up spending more, and taking more time, just to correct the mistakes that the first person made.

And look, I've sold digital products online anywhere from $10 up to about $5,000. The people who buy the $10 stuff, without fail, ask more questions and have more issues. You have more technical questions, annoying things, just things that they should have already figured out for themselves with a quick Google search. The people who spend $5,000, you won't hear from them for three months, then they'll come back with a testimonial.

That's the difference. The $10 people are looking at the price, and are focused on just the price, whereas the $5,000 people are looking at value.

Well, exactly. Most people don't realistically buy a $10 ebook or report or something and sit there questioning whether this is going to bring them $100,000 in value or anything like that. It's a much lower level decision than that. Someone who's investing $5,000 is coming from a completely different point of view, and they're buying based on value. And because they've invested money, they tend to respect you more.

They've done all their due diligence beforehand. So when they pay the money, they know what they're getting. They trust you as a trusted advisor and expert to deliver on that value, and they go away and let you do your thing, or they go away and do their own thing. Whereas the $10 person tends to put a lot more of the success or failure of their own results onto you. That's been my experience.

Yes, that's very interesting. So they're completely different mindsets. I really like what one of my idols, Warren Buffett, says, and that is: price is what you pay, value is what you get.

Yes. Yeah, I've heard that before. That's spot on.

So Kyle, would you mind sharing a case study that comes to mind, where you or one of your students have approached a customer with a high value offer and a high price, and converted it successfully? What worked well for them in that situation, and what made it a successful conversion?

I've got a really good case study that actually covers quite a lot of the stuff we've talked about. I worked with a guy named Patrick about a year or two ago. We worked together for about a year. He came to me, and he had a pretty successful business. He was doing, I think, low six figures. He came from a programming background, and he was basically selling websites for two or three thousand dollars, something in that kind of range.

The conversations he was having with clients were very technical. He's a programmer, so it was very much talking about code and HTML and CSS and all these very technical things. And because of that, those were the type of clients he attracted: people who were interested in technical stuff and wanted to talk about the technical stuff. Because of this, he had an on-paper successful business, but he was really stressed out. He was working really long hours. Clients would call him or email him on a Sunday morning and expect a response straight away. A really bad situation.

So we started working together, and we basically repositioned everything he was doing, from selling this technical small website to selling a high value, results based solution to a very specific market, a segment of surgeons. He was still selling pretty much the exact same thing, a website and some traffic, maybe some social media management, that he was selling before. But we went from selling that package of services for, say, two to three thousand dollars, to two packages. One was $30,000 and one was $50,000.

The actual technical thing he delivered was probably 90% the same as it was before. What changed was the market we sold to, the conversation we had with those people, and how our solution was positioned.

Great case study. I think that will make it a lot more real for the listeners. It certainly is a fantastic illustration of what we've been saying, so thank you very much for sharing that. So let's talk about some of the key challenges when it comes to quoting high prices. Some things that have already come across in this conversation are mindset. I think that's one of the biggest ones: us getting comfortable with asking for a high price.

And the solution to that is to think about the value that you're providing, and to position yourself as a partner rather than somebody offering a commodity, which again is apparent in the case study that you shared earlier on. Any other big challenges you've seen your students encounter when it comes to quoting high prices and being comfortable with that? Yeah, well, like you mentioned, mindset's definitely the big one. The biggest challenge often is just saying the number. If you've only ever said the number three thousand when you're selling a website, it's like literally difficult to get the words out and say eight thousand or ten thousand and say it with confidence. So that's the hardest thing. I've literally worked with coaching students and they say to me, "I've tried to sell at high prices and it doesn't work."

And I asked them, "What's the highest you've ever quoted?" And they say, "Three thousand dollars." And I'm like, "Well how can you expect to sell something for ten thousand if you've only ever asked for three?" And you're laughing and it is kind of funny, right? But this is true.

I'm laughing because I recognize it. I relate to that.

Yeah, that's the first thing is just your own mindset and the ability to say the number. This is something I learned back when I was doing door to door sales. Part of our training was to look at ourselves in a mirror and quote the number and actually say the number to ourselves, looking at ourselves in the eye in the mirror and having confidence to do that. And it sounds like such a silly thing, but as a, you know, I think I must have been 19 or 20 years old at the time, I struggled to do that. I struggled to look myself in the eye in the mirror and say the number. I can't remember what the number was. It was probably only three or five thousand dollars at the time, which to a 19 year old kid who's broke is a lot of money. I struggled to do it.

It's a lot of money.

Yeah, but with some practice I got there. So that's definitely the first thing is just the mindset and the ability to say the number. There's a bunch of other things that go into it. I think we sometimes put too much weight in what other people are charging. So we look at the market and we kind of just price our services and about what everyone else is selling.

Now, what's stopping you from doubling what your nearest competitor is selling at? And the logical next step from there is, OK, if I'm going to double the price, what can I do to provide more value? How can I provide something that's going to give them 10 times more value than what the person is getting? So I think that's another factor and one that comes up more specifically for the consultants I work with is they listen, perhaps a little too much about certain things the client perhaps says and price based on what they think the client can afford rather than the value that they're providing to that client. So you have a conversation with the client and they're talking about how this website is going to bring them a million dollars of new business over the next five years.

But then they mentioned that they've got a credit card bill coming up and they're struggling to pay it. And so you take those two things and rather than skewing high because of the high value you can provide, you skew low because of their current financial struggles. And the one thing I've learned with those kind of financial struggles is they can be wildly different. Like one person who says I'm broke means they literally don't have a cent to their name. Someone else who says they're broke means they just don't have, you know, liquid cash right now. But next month they'll have another hundred thousand dollars they can spend.

So the actions that are coming out of this that a listener can take is one, get in front of a mirror and start saying the price that you want to be charging and get comfortable with that. The second action is get clear on the value you're bringing to the table and try and think about what the customer is saying from their perspective rather than your own. So if they are saying I have these credit card bills or I'm broke, try and get clear on what they mean by that. Maybe they're not really in dire straits like you think they are. So get clear on that.

And most importantly, everything of value comes at a certain price and get clear on that as well. So in summary, the action steps: move away from a fear based mindset. Don't just think in terms of what your competition is charging, but think in terms of how I can bring more value to the table and get comfortable with asking for your desired price by practicing in front of a mirror. Anything else?

That's fantastic. That's a good summary. Yeah, one thing I get some of my students to do is an exercise if nothing else is think about if you had your ideal prospect and they bought the exact thing that you knew they needed to get the best result they could possibly get. What results would they get? And that's the value that you base your service off because that's who you want to be selling to, right?

You want to be selling to your ideal clients and you want to be selling them the ideal solution that gives them what they want. And what you find when you go through that process and actually sit down and work out the value, it's astronomically more than what you're currently charging. Most people find they can at the very least double their prices or more like what Patrick did 10X their prices and then 15X their prices selling virtually the exact same thing. But it comes from the confidence you get of going through that process and adjusting your own mindset based on the value you provide.

Yeah, I've got to say, Kyle, the idea of 10Xing your prices does sound like a huge number, but if you break it down into specific steps and you start making some small wins and you start by 2Xing your price, eventually 10Xing is very possible. So to someone who's listening and I'm making this is a note to myself as much as anyone else, it is doable. You just need to start taking action and start implementing the stuff you've been hearing in this conversation.

Yeah, most people are actually really surprised at how easy it is to sell at higher prices once you've adjusted your own mindset. Like the challenge is in your own head. And once you've conquered that challenge, actually getting the prices is way easier than you think. Like the first step we took with Patrick, we took his $3,000 WordPress website package and we doubled it and we sold it at $6,000, literally the exact same thing for twice as much money. And the first person he offered that to said yes. And he wrote me, he said, man, like, I should have done this three years ago. That's how simple it can be.

Right. Cool. All right, Kyle, this has been very illuminating. What books have had the biggest impact on you and you recommend people check out and why?

I get this question all the time. And I honestly, I really struggle with it because I'm a huge reader. I read literally tons of books. I've got a wall of books in my office. And honestly, a lot of them have had big impacts in different ways.

But I pulled out three, which I think overall have really shaped my mindset and my approach to business and marketing. The first one is Scientific Advertising by Claude Hopkins, which is essentially all about how advertising and marketing really should be scientific. It should be trackable. It should be measurable. It should be predictable.

You should know that when you spend one thousand dollars over here, that you're going to get two thousand dollars back or whatever your numbers are. So that for me was really, I guess, shaped how I approach marketing and realize that marketing is an investment. It's not a cost. It's something that should be tracked. It should be measurable. And those kind of factors.

The second book is The Theory of Constraints by Eliyahu Goldratt, one of my favorite authors. I think it might have been Schramko that put me onto this book. This is really, really fantastic book. It's basically, I guess, you know, the analogy of the chain is only as strong as its weakest link.

The Theory of Constraints basically says that to improve a system, you have to start with the weakest link because you can't basically do any better than the weakest link. And the third book is The Power of Full Engagement by Tony Schwartz. That's about managing energy rather than managing your time.

Yes. Yes, I've actually read some of his stuff. He's great. And how do listeners find out more about you, Kyle? And is there anything else you'd like to add before we say goodbye?

Yeah, you can find me at consultingtycoon.com. That's sort of my main website where I teach consulting and those kind of things. I've also got an AdWords agency at getleads.co if you need help with your marketing. In terms of final words or advice or whatever, my best advice I can give you if you want to charge higher prices than you are now is go out today and just, if not double your current price, go and add a new package that's higher than the one you currently sell. There's no risk in adding an extra package that's more than what you're currently offering because if someone says no, you've still got your packages right now.

Start taking those baby steps. Start getting that confidence loop where you make an offer and someone says yes. And you raise your prices and someone says yes because that's a really addictive thing. And if you can start changing your mindset around prices, you'll experience a massive shift in your business and what people will actually respond to.

Awesome. Well, Kyle, it was fantastic having you on the show. Thank you so much for being here.

My pleasure, mate. Thanks for having me.

Okay, so I hope you got a lot of value out of this podcast, pun intended. Some of the key takeaways from this conversation for me were that 80% of the market isn't price focused. There are other factors that prospects look at, like results you can generate, timeframes within which you can turn things around. We talked about how to get comfortable with value-based pricing. I think that was really important and the importance of having strategic level conversations rather than having a commoditized approach.

Rather than thinking of a service that you offer, think of a solution that you offer to your client. We looked at the different mindsets people have when they come in to buy low-priced products like a $10 product versus someone who buys a $5,000 product. It's really chalk and cheese and it generally is a lot easier to work with the higher priced clients. So that's definitely something to think about. Then there were the action steps.

Get in front of a mirror. Get comfortable with quoting the price that you want to quote. Get clear on the value you bring to the table. Move from a fear-based or price-based mindset to more of a value-based mindset where it's very much driven by the opportunity you're bringing to the table. This exercise alone can help you 10X your prices and successfully land clients at those prices.