There’s a myth in the speaking world about how to state fees to prospects that is taught by many coaches, you’re likely using it, and it’s forcing you to make less than you would otherwise. Let’s deconstruct the myth and dive into how we reversed it to maximize the fees we were getting from every gig.
The Myth: Tiered Pricing Gives Clients Options And Grows Your Revenue
If you’ve been running a speaking business for more than a few days, you’ve likely come across this model for stating fees.
‘Give them options,’ coaches say. ‘Silver, Gold and Platinum.’ The reasoning behind this is that if they can’t afford your gold or platinum package, they’ll at least buy the silver one. Unfortunately, this line of reasoning is flawed on multiple levels.
Flaw 1: It’s predicated on ‘the speaker as a commodity’.
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If your event planner or executive director is looking for all the things that are in your gold and platinum-level packages, then they’ll be more likely to choose those options. Unfortunately, very few understand the value of the things you’re likely to list in those offerings (books, articles videos, panels, breakouts, etc.), because so few speakers ask about why the event is happening. If these folks could spend the money on your top-tier package and don’t understand how all those extra things drive the solution they’re hiring you to deliver, they’ll choose to spend their extra money somewhere else.
Flaw 2: It confuses buyers
There’s a famous quote from Henry Ford: “You can have the Model T in any color, as long as it’s black.” He had the assembly lines to produce vehicles in any color, so why did he stick to black? He was introducing an item that many considered a luxury and a novelty and knew folks would be confused with too many options. If your event planner is faced with 18 options and no way to link each of them to the solution they need, they’ll likely choose the cheapest option to just be done with the decision and save the most money.
The Solution: Eliminate The Options (At First)
Instead of confusing buyers with multiple options, we take our cue from premium car dealers – we ask why they need this service (in our case, a talk) and then match that solution up with the highest-level package in our inventory.
Visit a premium car lot and you’re guaranteed to be shown the package that includes Corinthian leather, premium carpet, stadium-quality sound, and claw that tickles your ear in traffic (OK, a guy can dream …)
At that point, because our buyers understand how all the features of our premium offering drives the results they want to achieve, they either accept the top-tier package (woohoo!) or say they don’t have the budget for all that.
It’s at this point in the negotiation we capture all the available budget and MAXIMIZE our fee.
What To Do If They Don’t Have The Budget For The Premium Package?
Critical to using the all-inclusive package strategy is that you’re not sending this to a prospect and waiting for a response. Instead, you’re walking them through your package’s options on the phone or in person before dropping the premium price (otherwise, they won’t have context for why it’s so expensive). If your prospect says it’s outside their budget range, you can ask them in real-time what their budget is, and how you’ll be happy to remove some items to meet their budget.
This is a subtle tactic and shouldn’t be overlooked. They might have thought they could get a keynote speaker for $X, and you dropped the price of $XXXX. They can’t come back with $X if they want to stay in the negotiation. At this point, they’ll scoop up every spare penny they have to come back with $XXX or $XX – in either case, it’s more than you would have gotten otherwise.
Bottom line is you need to keep your bottom line in mind, and that means maximizing value for your client to achieve their results and maximizing your revenue.
Running a great speaking business no longer has to be dependent on a 3-tier package.
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