In today’s podcast we look at the important factors that impact you getting paid what you’re worth. Making sure you’re speaking with your ideal audience is a great start, but there are other factors too like timing, location, context and communication. We showcase how this works with a service/performer example and a product (car) example and how your ideal client will pay your worth.
This is an episode in thought leadership and is intended to challenge you to think. There’s also some elements of actionable education.
Listen to the episode on all good podcast services, watch on YouTube or if you prefer to read, check out the transcript below.
Disclaimer – All information provided today is general in nature. Please reach out to Jane if required for personalised advice or coaching.
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Listen to S2 Ep18 of the FAQ Business Podcast
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Season 2 Episode 18 FAQ Business Podcast transcription |
Your ideal client will pay your worth
00:01 Getting your audience right
This week on the FAQ Business Podcast, we combined some of our recent topics we’ve been talking about and the importance of getting your audience right or ideal clients or buyer personas. We have a Tea Time Tip on that topic if you’re interested.
00:17 We just need a few key people listening
Recently I talked to you about the fact is anyone actually listening and the fact that we don’t need a big audience of randoms but rather a few really key people listening. In addition, we also talked about whether the price was right. Today’s episode effectively combines those together.
00:35 Examples of a famous violinist and some used cars
We’re going to go into two examples today. One of a famous violinist that performed in a Metro in Washington, and the other is a case of my partner and some of the cars he has and just showing the value differences when you know your audience. When you put your products and services in front of the right audience, your ideal client, you can command what you are truly worth and it is much greater than what the general public will pay.
01:13 Welcome to the FAQ Business Podcast featuring Jane Tweedy
Welcome to the FAQ Business Podcast for business owners, covering four pillars actionable, education, inspiring leaders, businesses like you, and thought leadership where we challenge your thinking.
Hosted by myself, Jane Tweedy. I’m founder and lead trainer of FAQ Business Training, where we want to avoid you getting ripped off or ripping yourself off. We’ll feature an amazing diversity of guests with lots to educate and inspire you. Let’s jump into today’s episode of the FAQ Business Podcast.
01:50 Today we are talking about pricing for your audience
Welcome back to the FAQ Business Podcast. Here again, I’m your host, Jane Tweedy, and today we’re going to build on some of our recent discussions about pricing, the price being right, particularly for your audience, and also about the fact was anyone listening, these do kind of combine together.
We’re going to emphasise today that the value that you convey to people is very different depending on who they are and a bunch of other circumstances we’ll talk about.
02:22 This podcast inspired by the story of Joshua Bell a famous violinist
This session was prompted by a share earlier in the week in one of the Facebook groups I belong to by a lady by the name of Vashti D’Vyne of Wellness Advice Now. She shared a post, I think it was from Soul Alchemy, but unfortunately, they didn’t have the source in there. So I have then done some digging and found some more information to make sure we’re talking about facts here. But it is an old story relating to a violinist by the name of Joshua Bell.
02:50 Social experiment by The Washington Post
I went digging up and I found out that it was actually effectively a social experiment that was run by The Washington Post. So they have a really good write-up on their website about all the details of the social experiment that was conducted.
03:03 World famous violinist, Joshua Bell, took his $3.5 million dollar violin to the Metro!
Joshua Bell, for those that don’t know, like me, is a world famous violinist. He plays complicated pieces and he plays them on a three and a half million dollar violin. So we’re talking big bucks here. He even played on this the day that he played in the Metro in Washington. So even if people didn’t recognise him, they could have made a fortune by stealing his violin.
03:30 Timing and location definitely had an impact
So the experiment goes that Joshua Bell back in 2007 was to go into the subway, he had a little bit of disguise, like a baseball cap. And he went and played his violin in front of the commuting audience on a Friday. Now that is important I do think. I think the time of day and the location definitely had some influence on the way that he came across. Because you think about it, if you’re rushing to work, you kind of aren’t paying attention as much to what’s around you.
Whereas if you were chilled out and relaxed in a park and you heard some music, you might be more inclined to want to stop and listen to it. So timing and location definitely have an impact. Bear this in mind for your own business.
04:17 A few nights prior he had played for about $1,000 a minute
A few nights before he played, he played at a Boston performance, a symphony and he commanded ticket prices, back in 2007 remember, that were an average seat price of around US$100. So that’s quite substantial for back in 2007, he basically was earning about US$1,000 a minute when he was performing.
04:40 He played a Bach piece that only a few people would be able to play
He played in front of this Metro audience. He rocked up in a taxi, not a train, because he didn’t want to risk his violin being taken on the train, irony, right. Anyway, he rocks up. He sets himself up not far from a garbage can, as you do, and he started playing.
He played a very complicated Bach piece that only a few people in the world would be able to play. And he played that on his three and a half million dollar violin. Basically, the Washington Post were there and they were viewing it and they were counting how many people.
05:15 A huge crowd went by, but only 27 people gave him money
So 1097 people wandered on by, 1097, huge numbers. People were rushing by on their way to their commute. Of those people 27, just 27, stopped to give him money or flicked him money, flicked him quarters as someone else said later on. 27 people, that is less than 3%.
05:43 Only 1 person recognised him even though he is quite famous
This guy was uber famous. So you think some people might have recognised him. He’d even been on The Muppets for crying out loud. Back in those days The Muppets was the place to be. So towards the end of his 45 minutes performance, however, finally someone actually came along that recognised him. So she stopped, she listened, she gave him $20, and she also went up and introduced herself.
So because she recognised him, that basically discounted her US$20. So apart from her US$20, the other people gave him a grand total of US$32.17. Remember, this guy is playing on a three and a half million dollar violin. This guy is an amazing performer. He commands money, he commands US$1,000 a minute. And yet that’s all he got because people didn’t know who he was. People weren’t seeing him in context. They weren’t recognising his skills and his expertise.
06:44 So how can we relate this to our small business?
So she was flabbergasted that people were flicking quarters at him when he’s this amazing superstar as far as she was concerned. So what does this tell you as a business owner? How can this relate to you? I hear so many people saying things like, oh, people can’t afford what I’m charging. They’re not the right people, just like this.
The people that were listening to him weren’t the right people. They weren’t people who were paying $100 a ticket to sit at an event. They were people that were on the subway, maybe had 25c in their pocket, flick a quarter. The timing of your offer, the location of your offer, the context of your offer all have a massive impact.
07:28 So who is our audience or ideal client?
But the core impact, of course, is who the audience is. Are they your ideal client? Because you know what? Your ideal client will pay what you’re worth.
And again, think about if he was in a park where people were chilled and relaxed, then it is much more likely that they may have actually stopped and listened. They may have listened enough to realise this guy knows what he’s doing. Or they may be like me and go, yeah, I’m really not a violin kind of person. And even if he was the world’s biggest superstar, I probably wouldn’t. It would go over my head.
So it is critically important that you identify your ideal clients, their needs when they’re available if you want to make sales.
08:12 He went back to the Metro in 2014 and this time announced he’d be there
A Classic FM article continued the story and did a bit of a follow-up. So in 2014, he actually went back to the same subway, but this time he did it a little differently. It was announced that he’d be at the subway and of course, what happened? Huge crowd needing crowd control. So he definitely had people that were interested, he definitely had demand, but he needed to communicate that.
08:43 Communicate your business and what you’re doing
So by making sure that people know about your business, you can communicate what you’re doing. That makes a huge difference.
So communication is really important. You can have the most amazing product or service for your ideal client base, but if they don’t know about it, how are they going to partake in it? This time around, he felt like he got the recognition he deserved with a big audience, and that made him feel a lot better than the 2007, where he actually felt people were ignoring him. Like I said, they probably weren’t really ignoring him, more just going about their everyday business.
09:21 This example is of the spec’d up luxury Mercedes
Another example I want to give you is a product type example in this case involving cars. Recently, my partner sold his old Mercedes ML500, a 2003 model so 19 years old, but still had many bells and whistles. Because it was a Mercedes, it was really super high spec’d. So the regular cars weren’t coming out with these type of specs until many years later. It was a Mercedes ML500, 2003 model, 4X4 luxury model and it did have the extras on it. When this car first hit the market, it was valued at AU$104,000 for the standard model.
His model wasn’t the standard model, it was the spec’d up model. He had some additional features like a sunroof, the extra seats to make it seven seater, and auto wipers, as you do, so the original price of this vehicle was around AU$110,000 mark.
10:23 The Mercedes sold second hand for AU$5,500
It also had a lot of the standard inclusions, which were things like heated seats, airbags, the things that we take for granted now. Roll on 19 years later. And yes, he didn’t own it for the whole time by the way. This car was in still good condition. Certainly while he had had it, there had been no prangs or anything, no accidents, there was no damage and it was in good condition. Sure, it’s done a few k’s, but it’s in good condition. He sold the car for AU$5,500.
Honestly, I think he probably undershot it probably by about $500 to $1000 because he hadn’t actually paid attention to the fact that market conditions had changed from when he looked at it earlier, because he hadn’t taken into account the fact that post Covid, there’s a great deal of issues in the used car market and the new car market with regards to supply. So it’s actually pushed prices up. So I think he probably could have got a little bit more. But let’s say whether it’s $5,500 or $6,500 that was the price, right.
11:31 Been restoring the 1985 Suzuki Sierra long wheel base
But over the last few years, he’s also been rebuilding in a restored original condition, no replacement motor or anything like that, a 37 year old, yes 37. It’s a 1985 Suzuki Sierra long wheel base. Does that mean anything to you? Not really, probably not. But very small and very boxy.
It’s only a 1.3 litre, whereas his other car was a 5.0 litre. This car is under what’s called historic registration, which is really cool in Australia because it means you get your registration, your CTP, which is third party person protection insurance. You get it really, really cheap, but you can only drive it to club days and an additional 60 days a year.
12:18 The Suzuki Sierra has no modern luxuries or even older luxuries!
So this car is now complete, all done up and really in equivalent condition to what the Mercedes was. But of course, without any of the modern luxuries or even the older luxuries things that you take for granted, things like air conditioning. No, no, no, in this Suzuki, it’s wind down the windows and I mean wind down the windows. Not beep on the electric windows. No, this is wind down.
There’s no remote locking. You’ve got to put your key in and open it, then open the passenger door. All that kind of fun stuff that we’ve almost forgotten about. Certainly no airbags, no safety or anything. It very much just feels like being in a metal box.
13:01 The Suzuki is nowhere near as comfortable as the Mercedes
And definitely no heated seats like the Mercedes had, so by any stretch, this car is nowhere near as comfortable as highly spec’d, also like the Mercedes, a four wheel drive vehicle. So proper four wheel drive. So it’s a pokey little car, 1.3 litres versus the 5.0 litres of the Mercedes. And therefore, when you look at something like car sales and it suggests these cars should be going around AU$2,400 to AU$4,000, you’re going, yeah, that probably seems fair enough, right?
Definitely less than the Mercedes. A. both are in good condition they get you from A to B. But the second part of it is the fact that the Mercedes has all of these features that the Suzuki certainly doesn’t have.
13:44 The original price of the Suzuki would have been way less than the Mercedes
The original price of the Suzuki I don’t have. But we’re talking more like AU$15-20 grand, right. So way, way cheaper than the Mercedes. Less than a fifth of the price of the Mercedes. Tiny 1.3 litre engine, proper four-wheel drive, if you think right, he sold the Mercedes for AU$5,500. Then you’re thinking, yeah, AU$2,500 is probably a fair enough price for this little car that has absolutely no specs, no luxury, no comfort.
However, you would be very mistaken because you would not sell that car to Joe Public. You wouldn’t take it just to a standard car yard and say, here’s my car, I’m selling it. A standard car yard would probably give you that car sales type price and, of course, take their cut as well. They would not be the people to sell it to. And by the way, the Mercedes was sold privately, so there was no car dealer fees involved.
So why is this price completely wrong? Why is the Sierra actually worth more than the Mercedes? Mmm interesting. Well, the key is the audience. If you go to the right audience, people will pay for that.
15:05 Suzuki enthusiasts will pay way more for this car
My partner is a member of the Suzuki 4WD Drive Club of New South Wales. These people are enthusiasts. They love their Suzuki or their Zooks, as they call them. They have so many parts, so many cars, and they absolutely adore their Suzuki’s.
They are by no means the only people like this. There are car clubs all over Australia that are also very popular fans of the Suzuki. And members of Suzuki Club also do have other cars and things as well. But they are absolutely lovers of the Suzuki’s. Because these cars are getting more and more rare it is obviously harder and harder if there is an accident or something to find replacement parts that are original.
15:53 Parts are getting rarer and they like to have the original Suzuki parts
Now, this car is actually made in different forms now overseas, so it is still made. There is still access to some of the parts, but not all of them. So it is getting rarer. But in addition, people like the authenticity of the original.
So these crazy Suzuki lovers, they love their Suzuki’s. And recently I have seen them, including somebody close to me, buying Suzuki’s for large amounts of money, comparatively, when they are wrecks. They are rusty heaps. So they may be spending that AU$2,500 on a rusty wreck that they’re going to do up. They might be spending AU$5,500 on a particular model. And again, it’s still a rusty wreck that needs doing up.
16:41 The Suzuki is now worth three or four times what the Mercedes is worth!
So they’re paying the same price that he sold his Mercedes for, for something that is massively in need of work and certainly not drivable or registerable as it stands, my partner did a full restoration on his Suzuki Sierra long wheel base, and his car is now worth AU$15,000-AU$20,000. Think about that. It’s worth three or four times what he sold the highly spec’d luxury Mercedes for. It is worth basically what it was worth when it was purchased.
Don’t worry about the inflation changes because we’re comparing apples with apples here, versus the Mercedes valued at AU$110,000 when it was first bought and sold for AU$5,500.
17:31 So the difference is the audience
So why is there such a vast difference? It’s because of the audience. The audience loves their Suzuki’s. They will pay up for these Suzuki’s. And therefore, you’ve got to know your audience, and if you sell your car to that audience, you’re going to command those type of values. If you sell your car to Joe Public, they’re going to look at it compared to the other car and go pfft this is worth nothing because it doesn’t have any of the bells and whistles or luxury features of the Mercedes.
18:03 The Mercedes lost money but the Suzuki is now worth the same
It’s funny, though, isn’t it, that people pay a lot for the name Mercedes when they first buy the car. And that’s why, as we know, when you buy a new car, you sort of lose 20-30% immediately you drive it out of the lot because a lot of it is built up into that new car value as well. But it is incredible that over time, this Mercedes is now worth such a small portion, 5% of its original value 22 years ago, whereas a 37 year old Suzuki is worth what it was worth.
That’s kind of crazy. So something like a Suzuki is low cost. It doesn’t have any glamour or anything like it does have low value, the new cars, but the old ones, they really do hold their value. Now they did dip, obviously, at some stage, but they did come back up. And that happens a lot with those types of cars.
18:56 People are now holding onto Holdens and Fords
And that’s why there’s some people currently holding onto Holdens and things or Fords, because they’re going these are the last production cars in Australia. They will eventually have some additional value.
For someone like me that sees a car really as getting me from A to B. And if I was looking at two cars, I’m going to go, of course I’m going to take the Mercedes at five and a half thousand versus the Sierra. Even if it was $5,500, let alone the $15,000 – $20,000 it would be.
Because I’m not a car person. I’m just a person that likes to be able to get somewhere, preferably in a bit more comfort than the old vehicle. I would value the Mercedes more than the Suzuki, but with the Suzuki Club member, hell no. They would value that Suzuki way higher than that Mercedes.
19:48 Understand who our client is so they value us for our worth
So it’s crystal clear we need to understand who our client is and if we can target our ideal clients, find where they are and give them what they want and need when they want and need it, we can command the value that we’re really worth. So the learnings to take away from today, you must know your ideal client. These are the people that are going to value you for what you’re worth.
20:14 A Joshua Bell fan who knew he was playing in the Metro would give a decent tip
If you were a fan of Joshua Bell and you saw him playing in a Metro, you would be freaking out and you’d be so excited to see him, you wouldn’t care if you were late to work or whatever, right? You’re going to stop there, you’re going to stop, watch, listen, and you’ll give him probably a decent tip.
However, even if you were a fan of his and you were in a rush, you may not have heard enough to think, oh, this is something that sounds familiar or something that sounds like of a high standard. You might not have had the time, but no public person is just going to stop on a busy commute day to stop and listen to that person, which we saw in the numbers. Less than 3% gave him money and less than 1% stopped to listen to him.
21:03 Know your audience and consider location, timing and situation
So we’ve got to know who our audience is. We need to understand things about them as well as including things like when they are available. He would have had, I reckon, a better response if he’d played in the park where people had the time to stop and listen rather than be in a rush.
So the location, the timing, the context all definitely plays a part if you present yourself at the wrong time. If you go live after midnight and your audience is local, then people aren’t going to see you. But also do remember when you put yourself out there to a not quite ideal audience, but in the right situation because they might have the time to stop and listen and appreciate, they may have still attracted people that weren’t necessarily his ideal fan or his raving fan, they might have attracted some other people too.
21:57 The price is relative and comes down to the value and worth to the buyer
The price is relative to so many things and ultimately it comes down to the value and the worth to that person and the value that they perceive. If they love a Suzuki, they will potentially pay up for a Suzuki.
If they think you’re just a busker, they will pay down and flip your quarters rather than the $100 a seat that he was commanding a few weeks earlier.
22:26 Also environment, context, and communication are all important
But remember, he was playing in a concert. When you go to a concert, you expect to pay a large price when you are paying a busker in a subway, you expect to flick them a few coins. So the environment they’re playing in, the context they’re in definitely has an impact. So think about how you’re presenting yourself and the impact that you’re having.
What about communication? If people know what you’re doing, they know what your products and services is, your values are. They know what you’re up to, they know how to get hold of you, then they’re much more likely to do business with you. Look at when he went back and told people he was going to be at the Metro, people came because they knew about it. They don’t know about it they aren’t going to be there.
23:14 Remember markets change so make sure you still know your ideal client
Finally, also remember to check market conditions, things change. And particularly in the post Covid world, things have changed a lot. So make sure you’re still relevant to your market, to your ideal client, has the ideal client changed?
Have you had to go to a new ideal client base, a new product or service? So really think about whether conditions have changed because that might lead you to having to make changes in your world. You need to check that you are still in the right market, targeting the right people at the right price.
23:47 The ideal client, right time, right conditions will pay what you’re worth
I hope this episode has been eye-opening or ear something for you, and made you think about your audience. Because when you find the audience, your ideal client, at the right time, in the right conditions, with the right messaging, they will pay you what you’re worth.
24:08 Thanks for listening to the FAQ Business Podcast please subscribe for future episodes
I’m Jane Tweedy thank you for listening and today was another episode of the FAQ Business Podcast. Please subscribe and listen on in to future episodes.
Thank you for listening to today’s episode of the FAQ Business Podcast, available on all good podcast services. You can subscribe today via FAQBusinessPodcast.com.au or directly on Apple iTunes, iHeartRadio or Spotify. Subscribe, follow, share and where able review our podcast or leave us a comment on either YouTube or our blog page.
Thanks for helping us to help you the small to medium businesses who are growing and want to make a difference, look forward to connecting with you again on the next episode of the FAQ Business Podcast.
Today’s podcast episode featured our host Jane Tweedy. Her details are as follows:
Jane is a Professional Certified Coach with International Coaching Federation (PCC with ICF), business advisor and trainer. She loves working with growing small to medium business owners who are doing the right thing, to help them do it right! Currently, Jane offers at least 50 live sessions a year to train small business owners.
Jane offers a variety of services to clients and her online school and membership site went live late 2021. Jane’s focus for 2022 is building the membership and online school out further, and offering implementable small group training – something she finds is often the missing link.
If you are interested in training, speaking, or anything else Jane has to offer, please connect via firstname.lastname@example.org or via the contact forms on our websites.
faqbusinesstraining.com.au – our main site with a great blog
faqbusinesstraining.com – our new online school
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