#012: How to Price for Mutual Success?
Pricing is not a zero-sum game - How to pay your rockstar coach?
Happy Saturday, fellow Price Crafter!
Let’s kick off the weekend with a quick game, shall we?
What does this rock-star-looking guy, fresh out of a Game of Thrones shoot, have in common with me?
Struggling to answer?
His name is Claus Raasted. You can look him up on LinkedIn.
Still stumped?
Don’t worry, because until a few days ago, Claus and I didn’t have much in common.
But now, our interests align.
I’ve decided to have him as my coach.
My success is now his success, and vice versa.
So, how do I use Pricing to ensure that’s the case?
Let's dive in.
Setting the Theme
I came across Claus’ post while browsing Ulrik’s SaaS Pricing community.
It caught my eye, so I decided to reach out.
(If you struggle with cold emails, I hope this gives you some inspiration.)
He shared his podcast with me, and I loved it.
Claus brings positive energy, sharp insights, and I enjoyed his direct approach.
Every episode kicks off with, “Tell me how I can help.”
Naturally, I reached out again.
Claus came back, suggesting that he could potentially coach me.
Since I’d just wrapped up my arrangement with my previous coach, I was open to this idea.
That's when Claus threw me a curveball:
“Since you’re a pricing professional, you set the price. I pre-accept.”
The Pricing Principle
“What a smart-ass,” I thought, but I was excited by the challenge.
How should I price his coaching?
The typical approach is to return to the Pricing principle and try to assess the value I’ll be getting from this engagement.
That’s the theory.
Applying it here, though, is a bit tricky.
Two Challenges:
I don’t really know enough about him.
I don’t know what potential he can help me unlock.
Understanding Claus
I listened to more of his podcasts. He can definitely talk, but can he really help me?
I checked out his website. It's called "Claus Raasted - Overpaid Rockstar Consultant." Clearly, he understands price anchoring.
I watched his YouTube videos. His methods are rather - unconventional. I found myself asking ChatGPT, “Is Claus Raasted a cult leader?”
(Spoiler: He’s not. According to ChatGPT, anyway.)
So, the research didn’t lead me anywhere.
What potential can he unlock?
I’m still figuring out my future direction, and my value will depend on my chosen path.
If I write a best-selling Pricing book, my value might be tied to book sales.
If I become a Pricing community facilitator, my value could be membership fees.
If I lead Pricing workshops, my value would come from the number and price of each workshop.
Without a clear direction, estimating value is tough.
I hit a roadblock.
It’s Not a Zero-Sum Game
Value estimation didn’t get me very far.
I turned to another Pricing principle: “It’s not a zero-sum game.”
Instead of focusing on estimating the size of the pie (value estimation) and dividing it, I want to grow the pie (value creation).
This is often something people miss - they thought pricing is about figuring out how to take more from the other party.
Wrong!
The holy grail of Pricing should always be - creating more value for both parties.
The principle is simple - Let's increase the size of the pie, and we both benefit.
I needed a structure that would encourage Claus to grow the pie with me, aligning his interests with mine.
If I succeed, Claus succeeds. If his coaching works, I’ll have a more successful business.
So, I proposed:
“We had a deal!” He replied within a day.
How can you apply this logic?
I still don’t know exactly what to expect from Claus, but I am feeling positive.
Here’s what to keep in mind:
When setting prices, the closer you can link your customers’ success with yours, the better.
One classic example? Michelin.
They switched from charging per tyre to charging per mile driven.
The logic was simple: the more their fleet customers drove, the more money they made, and Michelin earned more, too.
Have a great weekend!
Cheers,
Claire
P.S. I posted on Thursday asking for recommendations on Pricing books. It went a bit “viral” for me. Below are the two books that received more than three mentions, and they'll be my weekend reading.
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