WEBVTT NOTE This file was generated by Descript 00:00:00.460 --> 00:00:02.569 Mark Butler: Hey, this is Mark Butler and you are listening 00:00:02.569 --> 00:00:05.300 to a podcast for coaches. 00:00:06.600 --> 00:00:12.050 I've been thinking a lot lately about viewing my work as a utility. 00:00:14.040 --> 00:00:16.410 So let's think about what do I mean by utility? 00:00:17.625 --> 00:00:20.535 Versus something like a luxury experience. 00:00:22.174 --> 00:00:23.075 Here's an example. 00:00:23.404 --> 00:00:27.915 Yesterday I was talking to a coaching friend of mine and historically I 00:00:27.915 --> 00:00:32.284 would call her a kind of exclusive sought after coach whose prices are 00:00:32.665 --> 00:00:34.365 pretty high relative to mine anyway. 00:00:35.185 --> 00:00:37.195 And we were talking about pricing, what she might do in 00:00:37.195 --> 00:00:38.445 the future with her pricing.. 00:00:38.995 --> 00:00:44.375 And she was asking me about my experience with not low prices, but 00:00:44.375 --> 00:00:49.395 lower prices than I used to charge and how I'm experiencing that. 00:00:50.194 --> 00:00:51.525 And I said it's been great. 00:00:51.915 --> 00:00:56.204 And the truth is I might lower my prices again. 00:00:56.215 --> 00:00:59.025 Now I don't know that I will, and I don't know by how much. 00:00:59.025 --> 00:01:01.095 And in fact, it, that may not make sense. 00:01:01.105 --> 00:01:02.365 And I may increase my prices. 00:01:02.995 --> 00:01:05.845 But she was very surprised to hear that I might lower them again. 00:01:05.875 --> 00:01:09.055 And her immediate assumption was that I'd be lowering my prices 00:01:09.055 --> 00:01:11.375 because demand is shrinking. 00:01:12.915 --> 00:01:16.795 Now in simple microeconomic theory, that's how it works. 00:01:16.795 --> 00:01:22.605 When demand is lower, price goes down because it's high demand that would 00:01:22.605 --> 00:01:25.135 lead to high prices, not universally, but. 00:01:26.150 --> 00:01:27.340 as a basic rule of thumb. 00:01:28.340 --> 00:01:30.360 And it's not so much that demand has increased. 00:01:30.360 --> 00:01:33.569 I'm finding that I'm able to connect with the number of 00:01:33.570 --> 00:01:34.990 new clients that I'd like to. 00:01:35.810 --> 00:01:42.280 It's more that I want my coaching to keep evolving in the direction of being a 00:01:42.280 --> 00:01:49.750 utility that my clients view as a standard semi permanent part of their life. 00:01:51.179 --> 00:01:53.959 In other words, when someone signs up for coaching with me. 00:01:54.474 --> 00:01:58.285 I liked the idea that they would at least view it as a possibility that 00:01:58.285 --> 00:02:00.525 we would work together for years. 00:02:03.415 --> 00:02:07.245 Strategically, that's advantageous for me because the longer a client 00:02:07.245 --> 00:02:11.004 works with me, the less I have to think about the acquisition of new 00:02:11.015 --> 00:02:14.304 clients and the less I have to think about the acquisition of new clients. 00:02:15.224 --> 00:02:18.055 Frankly, the easier it is to maintain my own psychology, my 00:02:18.055 --> 00:02:21.704 own internal regulation, and it also allows me to focus elsewhere. 00:02:21.704 --> 00:02:23.485 And it allows me to focus on. 00:02:24.530 --> 00:02:28.170 new topic areas, increasing my expertise or my knowledge in 00:02:28.180 --> 00:02:30.780 different areas, increasing my comfort and talking about those. 00:02:31.340 --> 00:02:34.100 It allows me to shift my energy toward the product and away 00:02:34.100 --> 00:02:35.380 from the selling of the product. 00:02:36.540 --> 00:02:38.340 So I want to be viewed as a utility. 00:02:38.340 --> 00:02:40.350 Now there are a couple of ethical questions there. 00:02:40.350 --> 00:02:43.770 As a practitioner, you would never want to. 00:02:45.130 --> 00:02:49.060 Position your coaching or position yourself as something that a client 00:02:49.130 --> 00:02:53.970 needs, quote unquote needs, and that they would be hurt if they were to lose it. 00:02:55.750 --> 00:02:59.730 Then I think we're occupying an unhealthy, maybe an unethical place where 00:03:00.110 --> 00:03:05.420 we're manipulating our clients so that we're achieving our financial goals. 00:03:06.905 --> 00:03:10.425 Whether or not it's actually in their best interest to keep working with us. 00:03:10.425 --> 00:03:13.105 Now I trust my client to tell me whether it's in their best interest to keep 00:03:13.105 --> 00:03:16.985 working with me, but I want to make sure that I'm not doing or saying anything 00:03:17.535 --> 00:03:20.925 that would give the impression that I think that they're not going to make it 00:03:20.925 --> 00:03:25.825 without me or that they could only succeed or be happy or be calm or whatever. 00:03:26.345 --> 00:03:30.605 If I'm shown up in their zoom room a couple of times a month, three 00:03:30.605 --> 00:03:32.445 times a month, that's not right. 00:03:32.475 --> 00:03:33.755 I never want to be that person. 00:03:34.935 --> 00:03:41.035 Person I want to be is someone who works with a client over the long term. 00:03:41.965 --> 00:03:47.155 And in the 30th or 50th or 60th session, we have a breakthrough. 00:03:48.035 --> 00:03:53.775 We have a breakthrough that's built in part on the longevity of our relationship. 00:03:55.785 --> 00:03:59.385 You've heard me talk about this before I don't need to belabor the point, but 00:03:59.385 --> 00:04:07.425 I believe in long term support long term coaching I Like to work with my own coach 00:04:07.425 --> 00:04:12.035 or coaches for the long term and I like to work with my clients for the long term 00:04:12.855 --> 00:04:16.825 and if something is going to be utility, it really has to have renewable value. 00:04:17.145 --> 00:04:24.325 So you have to expect it to be worth something new the next time you use it. 00:04:24.695 --> 00:04:27.865 Side note, as I think about starting a membership and I think about 00:04:27.865 --> 00:04:32.745 memberships in general, memberships don't have long term retention. 00:04:34.130 --> 00:04:38.360 Because there isn't necessarily something renewably valuable in them. 00:04:39.050 --> 00:04:40.680 And I'm not claiming to have cracked that. 00:04:40.710 --> 00:04:46.920 I don't know that I will crack that, a software company could have retention 00:04:46.920 --> 00:04:50.150 that runs into the years and years. 00:04:50.850 --> 00:04:55.200 And most coaching memberships have retention in the months. 00:04:55.595 --> 00:04:59.865 Several months, even really amazing, wonderful memberships 00:04:59.875 --> 00:05:03.235 that I wouldn't criticize their content or their intent or anything. 00:05:03.235 --> 00:05:04.555 I think they're fantastic. 00:05:04.935 --> 00:05:09.295 It just happens to be that after a person's been in a membership for a 00:05:09.295 --> 00:05:15.915 few months, maybe a year, most of the members have extracted most of the value, 00:05:16.405 --> 00:05:18.195 at least most of the perceived value. 00:05:18.685 --> 00:05:22.325 And then they think to themselves, I think I've got what this place has to offer me. 00:05:22.785 --> 00:05:24.145 There's probably not. 00:05:24.750 --> 00:05:27.540 Additional value in the next month of membership. 00:05:27.560 --> 00:05:28.510 And then they cancel. 00:05:29.500 --> 00:05:32.140 In other words, it's an easy thing to leave because nothing 00:05:32.140 --> 00:05:33.670 significant is being lost. 00:05:36.370 --> 00:05:36.930 No problem. 00:05:36.970 --> 00:05:40.020 Those can still be amazing businesses, but that's why. 00:05:41.230 --> 00:05:45.780 I've had a cell phone for 20 something years and why, if I join a coaching 00:05:45.780 --> 00:05:48.610 membership, I may only stay a few months. 00:05:49.200 --> 00:05:53.810 It's because the actual renewable utility in those two things. 00:05:54.460 --> 00:05:55.430 is completely different. 00:05:57.510 --> 00:06:00.750 So when I think about my coaching and when I think about the membership, I 00:06:00.760 --> 00:06:07.050 create in both cases, the most important question for me to ask myself, that may 00:06:07.050 --> 00:06:12.290 be impossible to answer, but it would be the most valuable question I could 00:06:12.360 --> 00:06:21.330 ever answer would be what would make this so renewably valuable and useful? 00:06:23.245 --> 00:06:30.455 That a person in a very undramatic way just starts to view it as a basic 00:06:30.465 --> 00:06:32.305 utility in their life and their business. 00:06:33.915 --> 00:06:35.675 What would its nature need to be? 00:06:35.675 --> 00:06:37.535 What would its features need to be? 00:06:38.435 --> 00:06:42.845 So that a person thinks to themselves, sure, I'd love to not spend that 00:06:42.845 --> 00:06:47.505 money that way, but no, actually I do love to spend that money that way 00:06:47.505 --> 00:06:50.435 because I just really like the thing. 00:06:51.560 --> 00:06:55.510 It really does give me this renewable utility. 00:06:56.940 --> 00:07:00.960 If I cancel it, I lose something that's important to me. 00:07:01.870 --> 00:07:08.050 Now FOMO will keep people for a while inertia where, and I've had 00:07:08.050 --> 00:07:11.810 this happen with coaching clients where a coaching client will say, I'm 00:07:11.810 --> 00:07:13.770 afraid I'm going to miss our calls. 00:07:15.470 --> 00:07:17.100 But I think I'm okay. 00:07:17.100 --> 00:07:20.470 I think I'm ready to just go work on my own for a while. 00:07:21.010 --> 00:07:24.610 And in those moments, I'm always happy to say, I totally agree with you. 00:07:24.670 --> 00:07:25.930 You're doing fantastic. 00:07:27.060 --> 00:07:34.020 So FOMO or inertia could keep them in my coaching, but that's 00:07:34.020 --> 00:07:35.440 not a strong enough reason. 00:07:35.600 --> 00:07:37.330 The reason has to be utility. 00:07:39.780 --> 00:07:44.150 So when the person comes to that moment, whether it's with my coaching or with my 00:07:44.150 --> 00:07:48.950 eventual membership, they've got to look at that expense and the expense has to 00:07:48.950 --> 00:07:54.440 be low enough relative to the renewable value that they perceive that they 00:07:54.440 --> 00:07:56.340 say yeah, of course I'm keeping that. 00:07:59.180 --> 00:08:05.700 So the price is a factor in that if the price is too high, it won't matter 00:08:05.700 --> 00:08:07.320 that they see renewable utility. 00:08:08.055 --> 00:08:13.835 They'll still have to say my alternative use for that money is compelling 00:08:13.835 --> 00:08:18.155 enough that I'm willing to give up this utility for that utility. 00:08:18.755 --> 00:08:21.605 Welcome to my econ undergraduate, by the way, happy to all have 00:08:21.605 --> 00:08:23.195 you in my econ one on one class. 00:08:23.715 --> 00:08:30.325 So they're saying the 97 or one 97 or three 97 per month or whatever 00:08:30.325 --> 00:08:31.955 it is that I'm spending on that. 00:08:32.805 --> 00:08:37.485 I actually have a clear idea of how I would use that money elsewhere in 00:08:37.485 --> 00:08:40.635 a way that I would believe delivers something more important to me. 00:08:42.875 --> 00:08:48.525 I want my coaching to be priced at a level that they look at the money they're 00:08:48.525 --> 00:08:50.505 spending and what they're getting for it. 00:08:50.545 --> 00:08:56.665 And they can't scan their life and find a more compelling use for that money. 00:08:57.400 --> 00:08:59.250 So the way I do that is two things. 00:08:59.250 --> 00:09:03.680 Number one, I try to make the thing as appealing and as useful as possible. 00:09:05.140 --> 00:09:08.060 And number two, I try to keep the price as low as possible. 00:09:11.100 --> 00:09:13.900 That friend I was talking to about her coaching prices. 00:09:13.920 --> 00:09:17.810 When I said, my strategic view of my pricing is that I want people to 00:09:17.810 --> 00:09:20.760 hang around something like forever. 00:09:21.315 --> 00:09:24.655 As long as we have a good relationship, as long as they are excited to show up to 00:09:24.655 --> 00:09:27.515 our next call, I want them as a client. 00:09:29.545 --> 00:09:34.075 And she said, that's interesting because it seems like almost every time I sell 00:09:34.075 --> 00:09:40.415 a client at my prices, when we wrap up the engagement, they say, I would love 00:09:40.415 --> 00:09:43.295 to continue, but I can't afford it. 00:09:45.475 --> 00:09:47.455 Now, do I think that means her business model is wrong? 00:09:47.495 --> 00:09:48.095 I don't. 00:09:48.105 --> 00:09:52.385 I think there's a whole fantastic strategic position where she says, 00:09:52.915 --> 00:09:58.355 I am a person who people save up to work with and work with once. 00:09:58.395 --> 00:09:59.355 And it's amazing. 00:09:59.355 --> 00:10:00.005 And they love it. 00:10:00.005 --> 00:10:00.725 And I love it. 00:10:00.735 --> 00:10:03.615 And when we're finished, they look back on it with fondness. 00:10:03.615 --> 00:10:04.515 And it was so great. 00:10:04.835 --> 00:10:06.545 I think that's a viable business plan. 00:10:07.085 --> 00:10:12.705 What it requires of that coach is she always has to find new people. 00:10:14.240 --> 00:10:16.580 Who will save up to work with her. 00:10:17.820 --> 00:10:20.360 Now, does that mean she has to work harder or more than I do? 00:10:20.410 --> 00:10:20.880 No. 00:10:21.210 --> 00:10:28.420 What it means is I spend more of my working hours with clients because it's 00:10:28.450 --> 00:10:32.940 easier for clients to work with me because my prices are lower and she's likely to 00:10:32.940 --> 00:10:38.900 spend more of her working hours thinking about, waiting for, hoping for that 00:10:38.900 --> 00:10:42.830 next client who saved up for a while. 00:10:43.330 --> 00:10:46.640 To work with her is one better than the other. 00:10:46.770 --> 00:10:50.570 I don't think so One of those is more comfortable and more appealing to 00:10:50.570 --> 00:10:56.120 me and it's the one where I'm always pretty busy my practice Bumping right 00:10:56.120 --> 00:11:01.030 up against too busy building long term relationships with clients enjoying them 00:11:01.030 --> 00:11:06.990 so much Seeing breakthroughs small and big having an opportunity to celebrate 00:11:06.990 --> 00:11:12.440 those breakthroughs Being able to say things like, Oh, I remember when we were 00:11:12.440 --> 00:11:18.300 talking two summers ago, it's really important to me to say things like that. 00:11:18.920 --> 00:11:22.120 Oh, but this usually does happen for you in September. 00:11:22.130 --> 00:11:23.530 Remember two Septembers ago? 00:11:23.530 --> 00:11:24.890 Remember last September? 00:11:26.180 --> 00:11:31.330 It's really important to me to be able to, to with my client, draw 00:11:31.350 --> 00:11:35.600 those through lines across their life experiences and across different 00:11:35.600 --> 00:11:37.770 conditions and seasons in their life. 00:11:38.180 --> 00:11:41.560 I find it deeply meaningful and satisfying. 00:11:42.940 --> 00:11:49.760 And if part of being able to do that and enjoy that is keeping my coaching fees 00:11:50.430 --> 00:11:52.120 comparatively low, they're still not low. 00:11:52.120 --> 00:11:56.630 They're not low relative to therapy, for example, but keeping them comparatively 00:11:56.630 --> 00:12:01.160 low, if that supports those long term relationships, I feel like I'm winning. 00:12:01.650 --> 00:12:05.950 And I have the same thought about the membership that I start. 00:12:06.110 --> 00:12:07.410 I want the membership. 00:12:07.755 --> 00:12:14.555 To be renewably useful, but I also want its price to be low enough that 00:12:14.555 --> 00:12:19.795 a person will look at that price and say, I could probably pay that forever. 00:12:20.655 --> 00:12:22.465 That's not an amount of money. 00:12:23.005 --> 00:12:26.785 That I would ever look at and say, Oh, I'm paying that. 00:12:26.795 --> 00:12:30.395 Therefore I'm giving up this other very important thing or 00:12:30.395 --> 00:12:32.175 this other very appealing thing. 00:12:32.935 --> 00:12:38.455 I want my price to be an, and price not an or price. 00:12:39.605 --> 00:12:43.525 In other words, I want my program to be priced such that a person would say, 00:12:43.885 --> 00:12:48.575 I'm in Mark's membership and I'm in this other thing and I'm in that other thing. 00:12:49.985 --> 00:12:52.455 If there were three, four or five programs like mine, they could say, 00:12:52.695 --> 00:12:56.705 I'm in these five programs and I love this little bit and that little bit and 00:12:56.705 --> 00:12:58.035 the other little bit from each of them. 00:12:59.105 --> 00:13:00.525 That sounds fantastic to me. 00:13:00.825 --> 00:13:03.495 Also as a consumer, I would love to buy that. 00:13:04.760 --> 00:13:09.890 I want to be able to drop in for a while, drop back out, not feel like 00:13:09.890 --> 00:13:13.110 I'm missing anything necessarily, not feel like I'm wasting money. 00:13:14.030 --> 00:13:14.600 I like that. 00:13:14.610 --> 00:13:15.480 That feels good to me. 00:13:15.480 --> 00:13:17.670 So I think that's how I've got to set my stuff up. 00:13:18.900 --> 00:13:23.160 But as you think about how to price your coaching, I do think the pricing 00:13:23.160 --> 00:13:25.930 episode I did months ago, I think it's, there's some good stuff there. 00:13:27.170 --> 00:13:31.420 But one new lens that I would introduce on that pricing question is, does 00:13:31.420 --> 00:13:35.460 your pricing lend itself to longer term or shorter term relationships? 00:13:35.920 --> 00:13:36.980 Neither is wrong. 00:13:38.030 --> 00:13:41.690 If you're targeting longer relationships, your price will reflect it. 00:13:42.140 --> 00:13:43.650 And so will the rest of your strategy. 00:13:44.800 --> 00:13:47.690 And if you're targeting shorter relationships, then 00:13:47.690 --> 00:13:48.850 your price will reflect that. 00:13:48.890 --> 00:13:50.330 And so will the rest of your strategy. 00:13:53.060 --> 00:13:55.630 But the food for thought I would leave you with above all 00:13:55.630 --> 00:13:58.845 else would be asking yourself 00:14:00.855 --> 00:14:06.955 in what ways is my coaching a utility that is renewably useful? 00:14:08.735 --> 00:14:12.975 What are my ways of being, what are my approaches that I take with my clients 00:14:14.165 --> 00:14:20.945 that would help them to say, although they would never use these words, my 00:14:20.945 --> 00:14:24.425 coaching with him or her is a renewable. 00:14:25.200 --> 00:14:27.050 Utility and benefit in my life. 00:14:27.220 --> 00:14:30.210 I really wouldn't ever want to be without it. 00:14:30.620 --> 00:14:33.110 I would feel worse off without it. 00:14:34.830 --> 00:14:35.390 Consider that. 00:14:35.410 --> 00:14:38.750 I think it's one of the basic questions that we have to answer in our coaching, 00:14:38.750 --> 00:14:42.150 because I think it will really define everything we do in our practices. 00:14:44.030 --> 00:14:46.070 And with that, I'll talk to you next time.