Pricing Isn't Just Numbers

Pricing isn’t just numbers — it’s psychology. 
In this episode, Kay and Crystal dive into the money mindsets we inherit, how childhood sayings like “waste not, want not” or “money doesn’t grow on trees” shape our pricing decisions, and why so many business owners undercharge.

We unpack imposter syndrome, confidence, attracting the right clients, and how understanding your value (and your clients’ pain points) transforms your pricing. Real stories, real laughs, and real talk about charging what you’re worth.

shows at the beginning of each episode for 15 seconds

Connect with us:
Crystal Petzer - https://businessgrowthcoach.com.au/
Kay Godfrey - https://upupandaway.net.au/

If this episode hits home, share it with a business owner who needs to hear it.

Transcript

SPEAKER_02 0:00

Well, Kay, welcome back. Welcome.

SPEAKER_01 0:04

You're listening to uh Kay and Crystals, Small Business Sorted Podcast. And today we've got a really interesting and great topic. One of my one of my ones I really enjoy talking about, talk about a lot every week, pricing. And I we wanted to cover more around understanding the psychology around pricing and how that affects we all price differently, don't we? You know. So I wanted us to talk about um money mindset first up and where that is formed initially. So um, you know, what is that? So the mindset that we get is often formed when we are living with our parents as kids. I know where you're going with this, Crystal.

SPEAKER_00 0:53

Where am I going with this?

SPEAKER_02 0:54

I've already told you. Where am I going? My dad. Yes. I want to hear your dad's story. My dad was. When you grew up, right? It's just your money mindset, but it is absolutely me. It's absolutely me. Um I guess it it comes from we never really had a lot of money, but my dad always kept it. You know, we never wanted for anything. Not read not really, but um what I was saying to Crystal before was whenever I wanted something, the answer was m usually no. No. And I'll never forget that. It was always no. Um so when I grew up, I um and I went shopping and I found something I liked, I bought it. Yeah. And if I liked it a lot, I often bought two. But saying that, I was I've always been careful with money. Always, always. It came from my family, my dad always being careful with money. It was a good thing, not a bad thing.

SPEAKER_01 1:58

And um Was there a particular saying in your family that you used to have like waste not want not?

SPEAKER_02 2:03

Oh, absolutely, yes. Money doesn't grow on trees. Money doesn't grow on trees, yes. There's probably lots of them.

SPEAKER_01 2:09

Yeah, I always know the waste not want. Um look after the cents and the dollars or the pound will that's true, yes.

SPEAKER_02 2:16

Pounds and shillings and pence when I now we're saying now I'm letting people know how old I am.

SPEAKER_01 2:24

Well, that's it. And I feel that um the the other sayings that I remember is that um the money is evil. I never heard that. Yeah, we heard that. That's not that's not a nice thing to say. No, but my grandfather was um part of the Baptist Church ministries that used to go into Lesotho and places like that in South Africa, and I think that probably came from there, money is evil, or um you know, uh have a champagne taste on beer money was another one that you hear a lot. Probably more in Australia. Um, and then that the the the really the um the one that we used to hear a lot when I grew up was that um my gran used to always say waste not, want not. And um I just always remember that. My my background in money mindset is probably a little different to yours. My parents were sort of, I always remember they didn't have a lot of money, and then my dad got into business and we had we suddenly we had a lot of money. He came from a very poor family. My mum came from a fairly, I don't know, like they were farmers. They weren't overly rich, but they they were quite successful farmers. So my mum probably didn't want for much, um, but she was very careful with money. Um, whereas my dad, because he didn't have much when he did get money, he liked to spend, see he would take us to the steakhouse, he we'd go on holidays and all of that sort of stuff. And I think I have a little bit of that in me. So I don't I do save and I'm very careful with some money.

SPEAKER_02 4:06

Um but when you want a BYD, you go out and buy one, right?

SPEAKER_01 4:09

I just do it. But I also make sure that I financially I can afford these things. If I couldn't afford them, obviously I wouldn't, you know. But um, but that's sort of and my biggest fear is to live in poverty. That that to me is is and so how does that play out in our businesses, right? So if we think about it, we all have helpful. Yes, but we have that money mindset. And I heard on a podcast yesterday, this guy um with NLP, that neurolinguistic programming, he was saying that most entrepreneurs or most people that start out in businesses, especially when they're younger, have a um a philosophy that money comes easy. Now that's another saying.

SPEAKER_02 4:56

That makes sense. That makes sense though, that entrepreneurs think that. Yeah. I I can totally see that. Yeah, yeah.

SPEAKER_01 5:04

So you said the biggest challenge you have with people that well, money comes easy, so they can lose easy and they'll make it easy again. And I think does that happen for them? Probably. Likely.

SPEAKER_02 5:20

It's like it's almost like betting, isn't it? Sort of bit.

SPEAKER_01 5:25

But if you think money comes easy, then maybe money does come easy.

SPEAKER_02 5:30

Yeah, well, and then you're not worried about money.

SPEAKER_01 5:32

Money is hard, hard work. The other saying, you've got to work hard. Do you remember that saying? Yeah, you you know, to get anywhere you've got to work hard. You've got to work at it, right? So that's another money mindset, right? So if you feel like you have to work really hard to make money, yeah, how do you think that'll play out in your life?

SPEAKER_02 5:52

You're gonna work hard.

SPEAKER_01 5:54

You've got to work hard.

SPEAKER_02 5:55

I work hard. I've always worked hard. I've never made a lot of money, in case anybody was thinking. I sort of tried, but it didn't happen.

SPEAKER_01 6:06

But I'm quite happy where I am.

unknown 6:07

Yeah.

SPEAKER_01 6:08

And I mean that's probably the most important part. But it's I think this is what and so just to bring it back to pricing, the the money mindset is what influences all of us in our business and why we all make such different decisions in our business around this. So when you've got a s a sense of scarcity and you're co constantly worried about every cent in everything that you do, you often won't progress your business fast enough because you're so worried about that. Whereas if you had money comes easy, you probably expand faster because you're happy to risk some of that money in order to grow and to do different things. So I feel that we need to just underlie everything. So for anybody who's listening, I'd love for you to think about those sayings that you grew up with. What do you think your money mindset is? Are you a spender? Are you scared of money? Is money your friend? Or are you one of those people that's afraid of money, you've got to work hard, it's it's scarcity. Yeah. And I feel that that will probably be playing out somewhere in your life and also in your business as well.

SPEAKER_02 7:17

What's going through my mind at the moment is there's there are all these, they're not influencers, people who, such as Morgan Nelson, who I went to the Gold Coast last year to s at to Dream Fest to see him speak. Oh, yes. He had no money. They always tell you their story. He had he was broke, you know, broke, had no money, was drinking on the job, committed suicide or tried to, and then he's come back from that and now he's making making millions. Yeah. Um but they always tell you that you you always have to invest something. You have to invest money to make money, which is probably true. Um and I probably I don't know if I should say this or not, but I I go to his conferences and I love them, and they're very in inspirational. But anybody who won't commit to those beliefs or his beliefs or his program, he calls them bobbleheads. Bobbleheads. I actually think I'm a bobblehead. What the hell is a bubblehead? Just what he calls somebody who doesn't commit. If you won't commit to all these things that, you know, you've got to do this and you've got to do that, and you've got to do the other, then it means yeah, it means basically that you're not you're not committed. So you're a bubblehead.

SPEAKER_01 8:44

But So how did Bobblehead play out in your business when you had your bookkeeping business?

SPEAKER_02 8:49

I mean, I think um I when I started, I was very reluctant. I hated talking to clients about prices. Yeah, I remember that. Um you know, I would actually avoid it. I'd send people a quote, an email. I wouldn't tell people on the on the phone because I just I I hated those discussions. I always underpriced to start with. Always underpriced. Um I wanted the business, but that Was it a lack of confidence to charge more? Yes, a lack of confidence, a lack of um not understanding my value. Some of it to start with, I guess, is what do you call it when you um fake it till you make it? Oh, a bit. Yes, I knew bookkeeping, yes, I was qualified, no, I hadn't yes, I was a an accounts manager for years, but no, I hadn't been an actual bookkeeper, so this client bookkeeper relationship was all new. Yeah. So um, yeah, I I guess I felt a bit of a fake at the beginning. Imposter. Yeah, an imposter. Imposter syndrome, that's it. And um it played out in my pricing. So and w within a a at least a year, I'd regretted quoting those prices because it's very difficult to recover from quoting a cheap price to a client and then suddenly saying, Oh, I'm gonna sorry, I'm gonna double it now. So um you need to be careful, price it right from the start. And that's what I did learn from um, although I was first class accounts then. I suppose I didn't have the confidence later when I became was part of the strategic bookkeeper programme. I had the confidence and I was given the tools to um quote better accurately and better and feel more confident. So um Yeah.

SPEAKER_01 10:42

And for those clients that that you undercharged for right at the beginning, did you lose any clients in the beginning? I don't really think I did.

SPEAKER_02 10:50

No, I've pretty much kept there were a few that I slowly um yeah I wouldn't say got rid of, that's not the term, but um moved on from. But most of my clients I kept, and I kept them at the lower price. I just charged the new ones the higher price.

SPEAKER_01 11:07

The the better price, yeah, when you've worked it out. I think pricing is just such a such a personal thing. So when you when you look at your money mindset and your confidence and where you are in business and if you how do you charge out? And often I think we we I can speak about Jim, right? So my husband Jimmy and Hierhub, he he's you'll hear a lot about him over the different sessions, I'm sure. Um he doesn't mind me telling these stories either. But Jimmy, when he first started out, he was also very like UK, he also likes to be liked very high S, high I. Um loves, loves people, loves these customers, but he always kind of undercharged a lot. And he was he he always used to say, but I wouldn't pay that.

SPEAKER_02 11:55

Yeah.

SPEAKER_01 11:56

I wouldn't pay that. So how can I charge them that? And I it was really hard to get him to understand. I mean, that was 15 years ago, now now it now he charges a lot better. But those early days, it was really hard for him to think that a client, and I said, but the client doesn't always know what you do, you've got the skills, but they don't, and they are probably in their head, they're thinking a thousand dollars, but you're only thinking four hundred dollars. And I said, So you're missing out on that that money that's sitting on the table basically, but you're not going for it. And I said to him, so what so it took us a while, but he always put in his head about that. And I think he also had imposter syndrome massively initially. And I think it's something we all have to learn. I think it's very common, I don't think it's unusual. But what we did to help Jim get through that, we actually, um, the admin girls, I used to say to them, because I was getting so frustrated of how low we were pricing things, and the profits just weren't as good as they should be. And I said to the girls, I want you to add.

SPEAKER_02 13:04

Did you tell Jim this?

SPEAKER_01 13:06

But afterwards, we did it for a month and um we added, I think it was 40% to everything he quoted. 40% everything that he quoted. He didn't know because the girls would send the quotes. He didn't want well, yeah, and I deliberately didn't send him. And then we were winning these quotes, right? And then he would go and he would like he'd ring me. He goes, The girls have made a mistake, Crystal. Oh my god, we've overcharged this kind by some. And I said, No, no, no, we've done that, we've been doing this for a month. And he goes, So we're gonna have no work going forward. And I'm going, No, we've actually won. I'd say we won about 70% of them. And I said to him, We've got plenty of work and we've won 70%. And he goes, at that price? And I go, Yes, it was at that price. And he goes, Oh my God, have I been and then he it it dawned on him as to that it it was him that was the issue and not because he was adamant that if he charged a different price, he would lose every single client. Yeah, and he didn't want to lose clients. And he has that thing about wanting to be liked. Yeah. So and he didn't want to be, and I you don't want to be dishonest, like you don't want to be greedy as they call it, but there is a fair price in the market for what your value is and what you deserve to have, right? And I think it's finding where your value is to charge.

SPEAKER_02 14:30

And you don't need to forget that your pricing should include the cost that you have had to incur for your training, for your qualifications, for your license. People tend to forget that. That it's cost you $20,000 or whatever to to get to the point to get the experience. Yeah. Um, to what to where you are now. So people tend to forget that in their pricing. And peep customers certainly forget that when they um they do pay you.

SPEAKER_01 15:01

Well, I don't think customers realize that, but I think talking from a customer's point of view is probably different a little bit. Let's just keep it on the business owner just for the now. But I feel that when you're pricing, so if we want to get a little bit more into the nuts and bolts of pricing, um, yes, taking into account your experience, your skill set, your knowledge, yeah. You know, a lot of the stuff that you do, the average person may not be able to do well or accurately, or do it as fast as you, right? Um, and also you're you're you need to also work out what your break-even point is, and how would we do that, Kay? Yeah, well, you have to put write down all the all of the costs.

SPEAKER_02 15:44

Yeah.

SPEAKER_01 15:45

So you would write down all your expenses, say, on a sheet of paper. Yep. And you would then work out, wow, and then you work out how many.

SPEAKER_02 15:56

Yeah, how what margin you want to make to work out what your price is.

SPEAKER_01 15:59

Because that's breaking even, right? So that's on making a profit. Yeah. And doing that exercise will often help you understand where your, whether you're hourly or whatever your your pro you know, your value is, what you need to make, to cover your expenses and plus make a profit. Yeah. And just keep it all realistic, and then that gives you a very good idea as to where you are. Obviously, the bigger you are, the more your expenses are, but then the more work you do, so it kind of spreads out anyway. But I think that is probably a really good way. So you just add up, you know, your car, your petrol, your insurance, your workers' comp, your rent, if you've got rent, um, wages, your wages, super. Yep. Um, admin book your wage accounting. Yeah, you've got to add your wages in. And that way you can then work out what that price needs to be or gets close to be, and then that way that's how you kind of make a profit, isn't it? Yes, it certainly is. It's kind of how you make a profit. The um one of the other things is um attracting the right type of client for the price.

SPEAKER_02 17:09

Yeah. If you have a low price, often you attract the wrong type of client. Yeah, how did that work out for you then? Because you were undercharging. It probably um it's probably right. Charge too little and there isn't a saying, is there? It's the opposite if you pay if you pay peanuts and get monkeys. It's like if you charge peanuts. You gotta get monkeys. There should be a saying, shouldn't I? Anyway. There must be a bit reverse reverse uh psychology. But um, yeah, you certainly attract there is a saying, you attract what you something, but I can't think what it is. Maybe somebody can You attract what you ex what what you um settle for. Something like that.

SPEAKER_01 17:57

So I feel that so so to find the right clients, what changed in your business then for you to find those right clients? For you to get more money.

SPEAKER_02 18:09

Um I I think I just I d I didn't really change too much. I I actually think the original people would have paid more. So I don't think I changed the clients at all. I just changed me, my philosophy and my pricing.

SPEAKER_01 18:22

Yeah.

SPEAKER_02 18:24

The clients would have probably paid what the higher price to start with. Yeah. So it was probably my own mind that was saying these people don't want to pay. Or I'd so desperately want these people as clients I'm gonna charge them way less than I should do. Um but they would have accepted a higher price. Um and the people who um obviously there's people who even won't pay that, but then that you just don't want those people. Yeah. Not as a business owner, you can't some people can't afford. Some people can't afford to pay for bookkeeping. Yeah. Or whatever else it is. And if they can't afford to pay, well, sorry. I'm not a charity. I'll try you know, I'll help people as much as I can, but um I have to run a business at the end of the day.

SPEAKER_01 19:13

And I think I think you've got to you there just you know, we've got our money mindset as to how we've got our own imposter syndromes, we've got our own lack of confidence in charging initially when we start out, um, that that desperately want to keep our clients or want to get new clients. Um Imagine what your your clients have a similar set of mindset, right? So the customer has their own money mindset. And so you have the customers who really could benefit from your services. They won't pay. And they won't pay.

SPEAKER_02 19:48

Yeah.

SPEAKER_01 19:49

And then they're asking you to bargain and drop your price, and yet they just won't pay for it, but they know how much value they're getting from you.

SPEAKER_02 19:56

Yeah.

SPEAKER_01 19:57

And that's difficult too, right?

SPEAKER_02 19:59

I think for me, being in the business I'm in, it's a lot of people don't value bookkeepers, so that was there's a general problem or mindset to overcome in the first place. Um people probably value tax um accountants more. Not that there's a comparison really, but they're willing to pay for that service. Um, they probably value I don't know, I'm trying to think of who business coaches more. Um some people don't. Again, it's down to what you what you value, what the client values and what they s what value they see in you. I I think you also have to persuade in the service type the businesses we're in, um, persuading or explaining to a a c a new customer what your value is is um very important. Yeah. If they understand and know and you can uh uh what's the word investment? Yes. To to explain to them or encourage yeah, to show them that it's an investment, then you're more likely to get that customer. So I think it pricing is all about uh explaining your value to the customer. Um part of it.

SPEAKER_01 21:26

How would you how would you explain your value to with me?

SPEAKER_02 21:29

I'd probably go through um how I can um keep their business on tr on track as far as what figures are concerned, profit and loss, to give them the comfort that um nothing um if I saw anything uh any red flags, mm, I would tell them. And cash flow forecasting is something. Budgets you can always add as a bookkeeper you can add on to the basic reconciling. Yeah. So what else can I offer you, Crystal? I can offer you, you know, would you like a cash flow forecast, you know, for for the next six months? Do you want to budget? Um a plan for the next five years. I've just found a lovely programmetrics that does um forecasts and um plans, and it's just fantastic. It's got a lot of AI in it. Um so yeah, all that sort of thing that you can um offer above and beyond the basic I reconcile zero for you and I'll do your best.

SPEAKER_01 22:38

I guess it's meeting what their their pain points are.

SPEAKER_02 22:43

Yeah.

SPEAKER_01 22:44

Right. And then making sure that you've got your price that would be, you know, what you need to for that gives you need to have your price point that you work towards, right? That that you know is value for you, you know, what that you need to make. And then if you have the customer's price points, this is what I'm hearing. Yep, the not the price points, the pain points, and you actually showing the value you can add that's gonna help them with those working late to at night too long, you know, or um not having a good set of figures to look at every month, not understanding their cash. Yeah, yeah. Um, all of that can save them hours and hours and also make much better decisions.

SPEAKER_00 23:29

Yeah.

SPEAKER_01 23:29

What price do you put on that?

SPEAKER_02 23:30

Do you know? It's the first time we've mentioned pain points, and that is one of the things that is probably the most important thing to look at when trying to attract new customers, yeah, pain points. And it's usually to do with cash. Um bringing to mind is have you seen the advertisement on TV for the So Zoho, the new MYOB app, which is just it's very basic. Yeah. It doesn't do profit and loss. MYOB. Yeah. Oh with Zoho. S-O-H-O, it's called the one where it's got a tradie saying work work, which is his doing his bookkeeping and and work, which he's happy doing his trade. And it goes work work. Going like this, work work. It's a really good ad, but it's sort of it's the same sort of thing. You know, it's looking at their pain points. They don't want to be doing bookkeeping paperwork. So you've got to do it after hours, right? Night, yeah.

SPEAKER_00 24:23

Yeah.

SPEAKER_02 24:24

So I think that's it's a great ad for that.

SPEAKER_01 24:26

It's not just tradies, it's like a lot of other any any service business, any any small to medium business often does it out of hours, especially if they don't have someone to help them.

SPEAKER_02 24:36

And when I was with first class accounts, I believe one of the ads, and they've probably still got it running, was to do the same thing. Yeah. Are you are you tired? Are you sitting up till midnight doing your books? Ah, well, if you are, try and get a first class accounts bookkeeper to do your bookkeeping for you. That was the whole ad, uh, which is attracting or not, it's not the word. They're pain points. They're pain points, yeah.

SPEAKER_01 25:03

And I think with pricing and getting that value for, I mean, this is all interlinked, isn't it? That if you if you continually aware of your customers' pain points and you're continually delivering on alleviating or making their pain points less, people are going to be less likely to leave you. Correct. And less likely to query your price because you're giving them, they can justify in their mind, because I think the the sales process, which is a whole nother conversation, by the way, um, the sales process really is people are always finding confirmation to to why they need to why they can spend that money, but they need that positive confirmation as to why, and often it's meeting a a very strong need that needs to be fixed inside of them. So that sort of comes back to that sales thing. But if you do what you've just said, I think that is just so powerful. Um, and you know, and that's that value again, isn't it? That you have. Yeah. Yeah, well done. I like that. Um do what um sorry, I'm just looking here. So business owners that are working really long hours um often can have low profit and they say they're working really long hours and I don't know where the profit is. And one of the areas that we often have to look at is that pricing, right? Like you and me, right? And often when you break it down and you look at what their that break-even point is and you go, okay, well, let's have a look at how much you're making on your per job. So you really do like per client, per job, per client, per product. So what you really need to know is is how much you are making on that. If you're only looking at a total monthly sales, and you don't actually ever work out what that particular job or service that you're doing is making, it's really hard for you to know if your pricing's right or wrong, isn't it?

SPEAKER_02 27:08

Yeah.

SPEAKER_01 27:09

So I feel like you need to, and there's so many systems and and new apps and stuff like that out there, job management systems and all CRMs that capture this, you can really get all of that to work out what it is per job. You can even do it on a spreadsheet if you wanted to. Um, but I think understanding that can make a huge difference to your pricing and getting that right. And I think once you have that right, it's then how you present it to a client. And like you said, like would you would you be more comfortable to have a pricing conversation now? Do you think? No. Still not.

SPEAKER_02 27:45

What I've done now, I don't have to have those conversations anymore, because I have subscriptions. Yes, okay. Um, I do have an hourly option, but all of my stuff is on a a website, it's Stan Store, and um all of my options are on there, so I I don't have to have that show. That's what it is, and that's what it is. That's what it is, that's what you get. Yeah, okay. So I don't have to have those conversations anymore. Um yeah.

SPEAKER_01 28:17

But it's interesting, so so so yes, subscriptions could work that way as well. I know what's helped Jim in higher hobby with pricing is that he will, when he has to have that conversation with the client, so say you'll say, I'll just zip out to the truck and you'll quickly work it out, and then he'll might come in. What he does is he works out what the hours are, he works out what his materials are, he'll add the admin fee or whatever other charges he wants to add in there, but he'll roll it all up into one price.

SPEAKER_00 28:46

Yeah, yeah.

SPEAKER_01 28:47

So so I think sometimes not having that broken up into hours and materials is better because then that people can't that's right, because some people say, well, you know, can we do it for you know just have one guy or can or they they'll pick it out, whereas you roll it all up into one. And I feel that can help you with your pricing as well. So and it might be easier just to say, you know, for all of that, and this is what you're getting, um, can also help people uh with that as well. Yep, yep. And you remember um there was that um you can also do proposals for clients as well. So I think you had proposals at a proposify if I remember um ignition, practice. Yeah. I had another client who does proposify, and he that is just such a wonderful system. So what he does is he has a good chat with the client, he then goes off and then takes everything he's heard from you. He's now using AI to capture that, which is really cool. So he actually gets the exact words you use now, and he puts that all into Proposify, puts his pricing in. He actually puts testimonials in there, he puts photos in there, he's actually got a video of his website, it's got everything in there, who we are, what we do. So it kind of shows the professionalism of his business, it's presented very well. That gets sent to the client with the price. He then has and then has a meeting with them, he's already pre-booked that meeting in, and then he goes through it with them. And then that there's no surprise. The customer's already seen it, but if they've got questions, he can go through with that.

SPEAKER_02 30:27

That's what Ignition does as well. Yeah, and what Ignition also did and proposed if I probably does, you could send the client three different options. Option one, basic reconciling your bears, option two will include budgets, option three will include a monthly review of your profit and loss and a sit-down meeting, and they could accept whichever, you know, one was two hundred dollars a month, one was three, one was four. You could accept whichever one you wanted. Wow. Um, so that was good. And they also had videos that you could put in about, you know, your business and stuff. So I loved it.

SPEAKER_01 31:05

I really like that. Yeah, and it's it's just reminded me too. I did a course with this uh Leanne Elridge, I think her name is, and she does um neuroscience and she does it on pricing and sales.

SPEAKER_00 31:21

Yes.

SPEAKER_01 31:22

And I I've just I just did the course a few weeks ago, and it just prompted me now to remember. She reckons you should you should always be nudging um the client. So what you show them is something that's a bit more because people need a price reference. So you would say, like she gave an example of say you were going out to buy TV and you went into Kohl's and you bought yourself some, I don't know, a Marsbar, right? And that's like three dollars or something, and then you walk into JB Hi-Fi and you buy and you see the TV on the on the thing and it says $4,000, and you go, whoa, because you've just nudged yourself with the Mars bar. But you said if you went, if he went into the shopping centre and he went into um, say he went into another store, like clothing store or something, and he bought a pair of shoes that were like four or five hundred dollars or three hundred dollars or something, and then he walks into that, then suddenly the TV set doesn't look as expensive. I'm not sure I I'm not sure I I'm not sure I get it. I've probably done a bad example here, but what she was saying is though, is that so what, and even with the alternative board and that, what what you do is you show what your biggest package is, your your everything package. Yeah. So so say it's like, you know, $12,000 for that, and then you could then put exactly what they need is next to it. So then they have a reference point and go, oh my God, that's that seems like that's too much. I wasn't thinking that high. And then they see yours there, say for $5,000, and then they go, Oh, yeah, that's that's exactly the sort of price I was thinking about. So it's it's basically helping people to compare because she said when they say that's really high, she said you should say compared to what. Okay. Yes. Because what are they comparing it to? We don't know what's in their mind that they're comparing it to, true. So compare to what? And they might be, they may not know. And she says, Yeah, out of her research in that a lot of people don't really know what they're comparing that to. That's very true. So she said, you know, then you can help them to understand because what do they compare? They go, often they will say, I don't really know, but it just feels like that's too high. This is the kind of price I was sort of thinking. She goes, Okay, well, for these kind of services, and this is how much time, and this is what the value you're gonna get, then you can help people to justify why they would want your service.

SPEAKER_02 33:47

The other thing is you can include every service in your quote, but then when they say, Oh, sorry, I think it's too expensive, you can say, Well, I can take out this, you know, payroll. I can take out the budget, I can to reduce it, but at least they know what they what they don't need and maybe they have that they don't need. Yes. So, um, yeah. That was interesting, Chris. I like that. I like that. Thank you. I like that.

SPEAKER_01 34:12

The other thing she said, which I thought was really interesting, this is just a little bit of side, that when, and this is a little male biased, um, but it it basically she said that men will buy if they s if they go into a store and they see the price in red, okay, men will generally buy what's when the price is in red.

SPEAKER_02 34:34

Oh really?

SPEAKER_01 34:35

They will buy that more than if it's in black. And she said it's like she's not sure why that is, but uh with all the testing that she's done, and she thinks it's because red means special, and they'll think it's on special, even though it may not be.

SPEAKER_00 34:48

Yeah.

SPEAKER_01 34:48

So she was saying that on your proposals and everything, if it is a male, do the pricing in red. In red. And she also said, this is just something else, which none of our job management systems or zero does, but she said the total price should be in the top left-hand side of the page, not in the bottom right. Okay. And the psychology behind that is that if things at the bottom of the page, it feels more heavy.

SPEAKER_02 35:16

Okay.

SPEAKER_01 35:16

And less lighter and maybe more expensive. All right. Whereas if it's at the top of the page, it feels lighter and perhaps less less expensive. That's interesting. That's what she was saying. Yeah, it was really and another one just quickly, we could cut this out if we don't want it. But um, she was saying if your pricing has too many syllables in, people tend to not want to buy it. So she said if it's like $12. Uh say $112.13, there's a whole lot of syllables in that. Where if you go $100 and 12 cents, it's got less syllables in and it's easier, it feels cheaper or less expensive in in a person's mind.

SPEAKER_02 36:02

Okay.

SPEAKER_01 36:02

And that's the psychology behind why people how people buy.

unknown 36:06

Okay.

SPEAKER_01 36:06

But um, which is more of a sales conversation, but it's it that does affect our pricing as well. So I think giving people a couple of options could possibly work because then they can have a look and see what they what they can, what is a normal price, and what is and you know on zero and a lot of these places they go most popular. And that's also why they do that, because it's prompting people to look at all the other pricing and go, oh, that's the most popular one. So people want to be like what everybody else is doing as well. So that's another sales technique to get people to buy.

SPEAKER_02 36:39

Very interesting, very interesting, very interesting, actually.

SPEAKER_01 36:42

Yeah. Um, so to sort of clarify, I guess the other thing is if your price is too low, you can sometimes have so you if your price is too low, that means you're not making enough money. So often if you're not making enough money, if anything goes wrong, it means you lose money, right? Or if you've made, you know, or if the customer wants more, you or they're not happy with something, it means that you're actually going to lose money because you haven't budgeted for any overages or anything like that, right? So, and often you will get the lower the price, the higher the demand. Yeah. And also the complaints and the stress because you're already feeling like, damn it, I'm not making enough money on it. And it's not that you're resentful, but you just it's tighter, right? So you're more aware of whether you of what you're doing there. So sometimes you may not be, I don't know, it's not like you don't want to do the work.

SPEAKER_02 37:49

Well, what yeah, if you don't, if you don't feel as though you make if you're not making any money doing the work, you may resent doing the work and you don't enjoy it. There's just a psychological thing there, isn't it? There is, isn't there? That's it. Why am I doing this for this person? Because I'm not making any money kind of thing. Yeah. I mean, I can understand how that how you would feel.

SPEAKER_01 38:07

And then if the customer complains and says you've left a a little mark, say a cleaner, you've left a little mark on that table, and they already only pay, you know, a low amount, and you're already feeling like, geez, they're getting such a bargain here, and then they get demanding, then that kind of makes you not like that customer even more. And then the relationship gets affected, which isn't great, right? So that's just something to be aware of if you are underpricing and why why you should really something I wrote down before on up.

SPEAKER_02 38:38

Pricing isn't about what you think you're worth, it's about what your business needs to survive. So pricing isn't about what you think you're worth, it's about what your business needs to survive and to grow. I like that. I like that too. It's very true. It is very true. And your pricing isn't just a number, it's a reflection of how you think about your business and your value. Do you like that one too? I like that one better. But then say it again. Your pricing isn't just a number, it's a reflection of how you think about your business and your value. We're back to values again. I know, I know, I know.

SPEAKER_01 39:19

But how important is values to the whole thing, isn't it? Yeah, the value, yes. Yes. And the other one that I just wanted the listeners to reflect on, am I pricing for profit or just to get the job? Yeah. And I think um, and am I attracting the customers I really want? I think it was my key takeout for today.

SPEAKER_02 39:44

Yeah. What was my key takeout was you talking about the the lady who the pricing um oh the psychology of pricing?

SPEAKER_01 39:51

Yeah. That was I know it was such an interesting course. It really was. Yeah. Um, well worth doing, and I that's actually part of sales. So sales is another topic we might have to, and maybe we could get Leo to come in and and actually talk a bit about it, you never know. Um we can only try, but yeah, it was very, very interesting. And I might um share share some of the other learnings from that, but it was very interesting. Over six weeks. Well, thank you, Kay. I've enjoyed this topic. I know it's a we could have gone a lot deeper on some other tech, you know, the mechanical prices, but yeah, this was more around the psychology of pricing. And um, but thank you for sharing and um and Depany your your uh mindset. And um thank you so much for sharing that and we'll see you on the next one. So see you next time. You've been listening to Kay and Crystal and Small Business Sorted. Thank you.