EP50: How to Price Your Products and Services: Pricing & Positioning with Paul Klein

 

Paul Klein is a Business Scaling + Pricing Strategy Consultant for Existing (and Aspiring!) Business Coaches & Consultants.  

In this episode, Paul shares how he helps clients charge what they truly worth, diving into an in-depth discussion on pricing strategies, how to set up long term pricing and positioning and a discussion on why your willingness to lose a deal is key to get your price. 

 

 

 

 

Why you have to check out today’s podcast: 

  • Learn about Paul’s ‘3 Pillars Of Revenue Generation’ to help you avoid underpricing your service 
  • Discover why you should charge clients more than you think you’re worth 
  • Learn how to price your service premium without getting objections 

 

Your client is saying to you that you ‘never’ negotiate. That means two things to me  you positioned yourself to command that greater value, and you’re not wavering on your value.”

Paul Klein 

 

 

Get Accelerate Your Subscription Business: Your Blueprint to Packaging & Pricing for Growth Course at https://www.championsofvalue.com  

 

 

Topics Covered: 

 

01:15 – The government job he had and what it was like

03:14 – How he got started in Pricing 

04:47 – An analogy of Pricing through Sports 

06:04 – Why he named his podcast as Pricing Is Positioning 

08:16 – Why solopreneurs tend to underprice themselves 

11:48 – What does it mean when your client tells you you never negotiate 

13:26 – Why it is hard to do value-based pricing 

16:39 – Why is the willingness to losing a deal a key for a solopreneur to get his price 

20:07 – How not to look desperate to close a deal 

22:01 – How he got his Fortune 500 client 

 

Key Takeaways: 

“You have to provide the value and there are three parts to every brand, a visual identity, verbal identity, and valued identity. And if all three of those things aren’t in direct correlation with each other, it’s not gonna work.” – Paul Klein 

 

“Be all in. If you don’t value your services and your products, neither will the market and you’ve got to believe in it first before anybody else will ever pay you for.” – Paul Klein  

 

“Would you rather have four quarters or a hundred pennies so you could serve a hundred people or you could have four big fish? I’d rather have the four big fish.” – Paul Klein 

 

“I think you have to be, whenever you make a pivot or whether you’ve already made a pivot, you to have three pillars of revenue for every successful solopreneur consulting business.”- Paul Klein 

 

People / Resources Mentioned:  

 

Connect with Paul Klein: 

 

Connect with Mark Stiving:    

 

Full Interview Transcript

(Note: This transcript was created using Temi, an AI transcription service.  Please forgive any transcription or grammatical errors.  We probably sounded better in real life.)

Paul Klein: Why people undercharge for their services and mindset is such a huge part of this as well. Not only do we take for common what we do in our expertise, but we devalue or we don’t have the mindset that you’re exactly talking about the almost delusional sense of self-confidence. Be all in. If you don’t value your services and your products, neither will the market and you’ve got to believe in it first before anybody else will ever pay you for. 

Mark Stiving: Welcome to Impact Pricing, the podcast where we discuss pricing, value, and the phenomenal relationship between them. I’m Mark Stiving, today our guest is Paul Klein. Here are three things you want to know about Paul before we start. He started life with a government job. Oh my gosh. He started and continues to run three different businesses and he has a podcast with a phenomenal name, which is Pricing Is Positioning. Welcome, Paul. 

Paul Klein: Hey Mark, how you doing? 

Mark Stiving: Fabulous! Okay, tell us about the government job. What’d you do? 

Paul Klein: I was a secret agent. Double O eight. No, no, no. I had one of those typical boring jobs, in local government. And that’s where my construction background comes from, is related to construction, building inspection and those horrible inspectors that would come out and tell you to tear your house down or ding you for having permits. And worked my way up through a 20-year career doing the responsible thing. And then my early forties, or at 40, I actually, I realized I was an entrepreneur stuck in bureaucracy and I had to get out. And I love the entrepreneurial life ever since then and I’ve been a K-1, non-employee person ever since. 

Mark Stiving: Yeah. So, what I love about that story though, you didn’t actually tell everybody, I pieced it together on your LinkedIn page, but you can tell us you took the expertise of what you learned in your 20 years as a government employee and said, hey, I can now apply that to something else. 

Paul Klein: Basically able to take, yeah the expertise that I had garnered over a 20 something year career. Actually a little more if you count before my government work and rather than just sit and cruise and wait for retirement, I said, Hey, I can take this piece and not only build a great consulting, high six-figure consulting business, but I also partnered with my business partner and three other partners in a tech company and we created a SaaS product that serves government entities as well as private entities solving those same problems that were related to my primary consulting business. So, the two companies I have as one as a consulting business that I help clients with. Then I also have a SaaS company that’s a full-on 12 employees. We have a board, I’m just one employee of, you know, I show up every quarter and kind of guide the ship, but it kind of run on its own and it’s continuing to grow. We launched that in 2016. It’s a true SaaS company. 

Mark Stiving: Nice. Okay. So, I don’t know the answer to this question yet. How did you get into pricing? 

Paul Klein: Boy, that’s a great question. But you know, I’ve always found myself as being a consultant, intrigued by all the challenges. You know, when I first started out, you know, trying to figure out how to get clients to commit. And there were some things that I had done or learned intuitively over this last, you know, 10 plus years on my own. And then I started kind of coaching and helping other people, other executives, professionals that were going out on their own. And I was always intrigued by how much they were undercharging for their services. So, I started studying and, you know, reading things and came across Ron Baker and Blair Enns and Alan Weiss and some of the things that they have been talking about for years. Just the light bulb went off. It’s like there were things that I was doing intuitively, but I didn’t know why. And so I really became a student of pricing and trying to understand it and through Ron’s podcast is how I met you and boy, you know, your show and your platform has been a great resource and I’ve learned even more from you. And so I just, I’m in this path of continuous growth and just, you know, enjoy helping other people get over that pricing block and undercharging for their services. 

Mark Stiving: Nice. I think we’re all pricing students. I certainly don’t pretend to know everything. I learned stuff all the time too. So, I think that’s absolutely brilliant. Why do you think it is? And, and I find this really unique that people get shocked once they start studying pricing. It’s like, Oh, I didn’t know all this and yet this knowledge is out here, but nobody knows. 

Paul Klein: You’re so right. I think it’s kind of like, I don’t know how, I don’t know a good analogy other than, you know, with sports, you know, it used to be when you and I were growing up in sports, you played three sports. There wasn’t a lot of technique. It was just pure God-given athletic ability. But now you couple that with structure and methodology that had been proven and, and a lot of people don’t know that. And so when you have a naturally gifted person, get the right coach that has that background in the technique and psychology and behavioral economics behind it, that really pieces it together. Then it’s like, Oh, that’s why I can hit a ball, 200 yards or you know, sprint a little faster cause I’m working the right muscles and so forth. And I think it’s the same thing in pricing. Not very many people realize there’s actually some methodology and structure behind all this. 

Mark Stiving: I think that’s a great analogy. You can imagine an athlete who may have God-given talent but hasn’t been coached properly and so they’re not going to excel. And yet someone who has that talent finds the right coach. It’s like that person takes off. I think that’s a great analogy. Your podcast is called Pricing Is Positioning. Why did you choose that name and what does it mean? 

Paul Klein: I was getting studying. I launched the podcast about a year ago. I think both of us launched our podcasts around the same time and I was looking for a name and I wanted to do pricing and I wanted to do something around consulting and pricing cause my niche audience is consultants, freelancers, solopreneurs and I wanted to do something that rang a bell with them. One day I was just searching for names and I was reading Blair’s book, Blair Enns’ Pricing Creativity and there’s one spot in his book and it’s only in one spot and I just read it and I highlight it and I go that’s a perfect name for my podcast. And it means so much to me, not in terms of how Blair was explaining it in his book, but it’s so much about how your price really positions you for the clients you want to attract. 

I like to attract Fortune 500, large corporate clients. I’m not that, I won’t serve mom and pop store or lower-tier pop clients. It’s just that I want to position myself and my services as such no different than Walmart does with discount shoppers versus Neiman Marcus with higher-end, you know, deeper pocket clientele, so to speak. And so, your pricing has a direct reflection on how you’re positioned in the marketplace. 

Mark Stiving: Yeah. Okay. So I agree with it. And yet, in a way, I disagree with it in the sense that I think positioning should come first and then we should choose the pricing to say, yes, I’m being consistent with that position. But, I think they have to be tied to each other. 

Paul Klein: 

Yeah. Yeah. You can’t. And that’s, one of the taglines is, you can’t just, you know, take a 1970s gremlin and put $126,000 price on it. You have to provide the value and there are three parts to every brand, a visual identity, verbal identity and a valued identity. And if all three of those things aren’t in direct correlation with each other and one of those is out of whack, it’s not gonna work. And so if you’re positioning yourself as you know, a Louis Vuitton purse, but you’re selling a Walmart handbag, it’s never gonna work, I think to your point. 

Mark Stiving: Yeah, absolutely. It all has to be congruent. So, we’re together. Excellent. Why is it that you think solopreneurs tend to underprice themselves? 

Paul Klein: I think we all do this, and I’ve been guilty of this in the past, is that whatever we’re close to and we take for granted, we don’t value, we tend to devalue it because it’s common to us. And you know, what I say is that what is common to us is golden to somebody else. You know you’re a Ph.D. pricer, you know, I mean, so you have a very great niche in that one area and you’d probably jump on a phone or a podcast with me and talk pricing any day, just like we are now. But the reality is, to the right people and the right clientele, that expertise is golden. And it’s no different than if you’re a copywriter, a marketer, a web designer, any kind of a solopreneur or in that space. Don’t take those things for granted. And that’s unfortunately what many of them do. And I think I heard this from, I can’t remember who I heard it from, but there’s a term called selling your own wallet, and we sell our own wallet or what we think is valuable in our world and not what’s valuable in our client’s world. And that’s that whole thing we could talk about where you want to provide value in terms of what it means to your clients, not what it means to us as the service professional. 

Mark Stiving: Yeah. Okay. So I agree with everything you just said and I find this whole topic fascinating because as I work with coaches, speakers or consultants or anybody, I find that they absolutely underpriced themselves. And so I want to tell you something that I was told the other day and you tell me what you just heard. 

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Mark Stiving: So, somebody asked me what my price is, I usually make up a really big price and I say it. And someone came back to me the other day and said, yeah, but Mark, you never negotiate. What does that mean? 

Paul Klein: Your client is saying to you that you never negotiate. Well, that means two things to me. You positioned yourself to command that greater value and you’re not wavering on your value. You, you, you. 

Mark Stiving: So, what’s fascinating about it is no one asked me to negotiate. 

Paul Klein: Ah, okay. 

Mark Stiving: And I think what it is is the confidence with which I state a price. People just say, Oh yeah, yeah, that’s going to be the price. Nobody ever asked me for a discount for anything. And it’s what I love about that, by the way, I’m not bragging about it, by any means. What I love about it is I’m just saying, if we can deliver and say something with confidence, people tend to believe it. 

Paul Klein: Yes. And I think that’s the other piece that I didn’t touch on a minute ago. And that’s a mindset. You asked about why people undercharge for their services and mindset is such a huge part of this as well. Not only do we take for common what we do in our expertise, but we devalue or we don’t have the mindset that you’re exactly talking about. You need to have that almost delusional sense of self-confidence. Be all in. If you don’t value it, Alan Weiss said it best. If you don’t value your services and your products, neither will the market and you’ve got to believe in it first before anybody else will ever pay you for it. 

Mark Stiving: Yup. That is absolutely true. The problem in our business and, audience, I’m confessing, I find it really hard to do value-based pricing. And here’s why I find it hard because when I give you one nugget, you’re going to go make $10 million. Can I charge you $1 million for that? 

Paul Klein: I’m with you on this Mark and I haven’t brought this up with Ron, he was on my show and I wanted to, but I think there’s a value conversation light. They talk about the value conversation and a value conversation too, but I think there’s a concept that you and I could probably riff on here real quick and that’s, I think there’s a value conversation light and that is where you’re providing professional services to large companies there’s a ton of those types of services you might charge in the $25,000 or less range. It’s still great high end consulting, six- seven-figure consulting but isn’t related to the business outcome of the entity. In other words, the services that I provided to KFC and Crate And Barrel and JC Penney’s and Neiman Marcus, I can’t base that on the net revenue that they’re going to make over the next year. Not only that, they’re never going to share that with me anyway. So, I can’t be a true value-based price in that sense, but I still have a very valuable service that I can provide. And it’s still focused on value. It’s just not in the true sense of a value conversation or value-based pricing like Ron explains it in the accounting world and the marketing world. 

Mark Stiving: Yeah, I must agree with you in the sense that you couldn’t get to value. My gut says that whenever I’m selling a B2B product, I could finally get to value. I think the problem I have with pricing consulting or pricing coaching or pricing, anything is that the value is so huge that it’s potentially so huge that it is really, really hard to get someone to say yes, I’m going to go pay you $1 million for, and actually your work, you didn’t say this earlier, but your work is in ADA type things where you’re coaching people to build ADA compliant facilities and you could imagine a story that says if you’re not ADA compliant, you get sued. It costs you this much. 

Paul Klein: That was actually, that’s been, when I first started out in my consulting business to today when I still work with clients, that’s a sale. So, if I have a service package for, you know, $9,500 or $5,500 somewhere in there, it’s not uncommon that the average lawsuit or to fight a lawsuit is 15 to $25,000, so you can tie an immediate return. It’s based on value, but it’s not in the true sense of the value conversation or value-based pricing. It’s more of a cost savings or insurance kind of value as opposed to value-based truly on the income increase or like in your case, you know, where you’re gonna make them another $10 million. 

Mark Stiving: Right. So, I think a value both ways, right? Value is also how much am I going to save you insurance? There’s value in insurance and insurance what are you going to save me? Well, I don’t have to incur that huge loss that I’m going to have. I think there’s value both ways and you could still have that value conversation. Absolutely. So it’s a fascinating topic. I think a key to a solopreneur getting their price is being willing to lose the deal. 

Paul Klein: Yes. You don’t, the least interested person or the least interested principle, I mean, if you’re, when you, and you probably may have been the same way Mark, when you first started on your own, you got a family to feed, you’ve got mortgage coming, you need work, you get that stench of desperation where you’re just like wanting to take anything. And I learned that early on where I just was like, I was chasing after a big fortune 500 clients that you would know if I said it. I mean, I flew to their headquarters, smoothed them, took them to in every time he’d meet with me, it was lower my price, lower my price, and just it just working me. And, fortunately, I didn’t get the job. Early on, it just proved the point that I was too interested. I wasn’t willing to walk and they can smell. Your clients can smell that a mile away. You know, when you’re answering every email, calling them back every Friday to just checking in with you. That’s telling. Those are signals to your prospects that you’re desperate and you’ve got to, you gotta be willing to walk. Like you said, 

Mark Stiving: I think if you’re going to choose your client, do you want to choose a really cheap client who’s only going to pay you very little and can negotiate the heck out of you? Or are you going to choose a client who cares about quality and as a high-end client? 

Paul Klein: Absolutely. And it’s, it’s another saying, would you rather have four quarters or a hundred pennies so you could serve a hundred people or you could have four big fish. You know, I’d rather have the four big fish. 

Mark Stiving: I love how you have all these analogies. 

Paul Klein: My kids and my wife always, give me grief about my analogies cause I don’t know where they come from, my mind is just kind of wired like that. I guess it’s a sickness. 

Mark Stiving: So, I think the thing is on the big fish story is, if you start negotiating early, if you act like you’re going to negotiate, they don’t believe you’re a quality provider, you’re not going to win them. 

Paul Klein: True. Yeah. And especially if you hit them with a price and then you come right back. So, when we can do it for 25% less, so, automatically, you’ve set the tone and, and, professional negotiators will wait you out. They’ll play that game. And I always say, Hey, when you send out an email, if they don’t respond for four days and then they say, yeah, we need some more follow-up information. Wait five days, you know, don’t play that game. You know, call him back two days or I’m going to be gone next week. You know, I’ll get around to it when I can, you know, and you just kind of have to, is a little bit of, I don’t want to say dishonesty, but there’s a little, ethical, whether you want to fib or not, but I mean, you don’t want to be dishonest. But at the same time, you don’t want to rush to every little whim that they’re asking for. You want to take your time and have that least interested principle in there. Otherwise, you’re going to cave in and be very unhappy. 

Mark Stiving: Yeah. And negotiations, one of my favorite rules, patience wins. And so if you can be patient and wait out the other person, you’ve got a much better shot. And if you’re going to look desperate and discount quickly and things are going to close the deal quickly, good luck. 

Paul Klein: Yeah. And then you’re going to be unhappy with it. The client’s going to be unhappy probably, cause you’re going to be unhappy that you got it for doing for such a reduced rate. And it just all goes bad from that point. So, I think you and I’ve learned the same lessons over the years. 

Mark Stiving: How do we get out of the looking desperate because, well, face it, we’re desperate. 

Paul Klein: Yeah. Well, I think you have to be, whenever you make a pivot or whether you’ve already made a pivot. I teach you to know, you need to have three pillars of revenue for every successful solopreneur consulting business. And in order to ride out those highs and lows and be able to pick and choose your clients, if you’re just solely trying to survive on the four quarters principle, you know, sometimes you have to ride out two or three quarters to get those big fish. So, you’ve got to have the revenue or the runway to ride those out. And so you either need before you need to make a pivot, make sure you have a severance package or six to eight months savings, you know so that you can strategically say yes to the right clients and no to the wrong clients. And you’re not under all that pressure because if you just make a jump with no plan, no runway, you know, no savings or severance and you’re automatically in crisis mode right from the get-go. 

So, that sets the tone for your consultancy. You’re behind the eight balls already. So, the three pillars of revenue are your high end consulting, which I talked about. That’s your standard, you know, stuff like you’re doing Mark. And then the second pillar is having an online presence of E and product services, much like you do, you have the online community and your courses. So, you have that second pillar and I believe you have the third pillar, too. And that is live events conferences, workshops, training. And so that’s what’s really made my business really thrive in 2010 as I started doing live training with online education, with my consulting and all three of those things working together, symmetrically, was able to keep those highs and lows of the revenues, so I could take a steady paycheck through the high end consulting because I had online and live events going on all at the same time. And just, you know, just continue to see the growth pattern go up. 

Mark Stiving: Yeah. And those three things play off of each other really well. 

Paul Klein: They do. That’s how everybody asks. How’d you get your first fortune 500 clients? Well, I did a four-day training event in Pleasanton down in the Bay area. And, lo and behold, Yum! Brands sent some staff to it and developed a relationship. Boom, Yum! Brands and Target and Neiman Marcus and it just go from there. 

Mark Stiving: So, were you doing public events? 

Paul Klein: What do you mean public events? 

Mark Stiving: Where you would book the room and sell individual seats? 

Paul Klein: Yeah. What I did is I, I’ve done a couple of different things. I’ve done two-hour kind of just informational things like a chamber of commerce, or industry deals or I’ve done full-day courses. And then I’ve also done like a four-day training workshop, quasi conference. I really liked the workshops, you know, and I think that’s, that’s where you get a small group of 10 to 15 people and really deep dive. It’s not just a conference where you just come and watch a bunch of people speak, but you’re actually working through a business result with them. Those are my favorite things to do, without a doubt. And, I was working for a company called Pragmatic where that’s what they did for a living was training. Train companies or we would, we called them public classes where we would get our own room and bring people in. That looked like a lot of work for me. So I don’t do that. I just do it for individual companies. So, they deal with all the logistics. 

Paul Klein: Yeah. I’ve done both. I was really careful not to cannibalize my own. So, usually, my rate to have me come in is higher than cause I do it myself. But I mean, you can get a conference room, you know, with 50 people, 10,000 with, uh, you know, for four days with food. I mean, it’s not crazy hard to do once you’ve gone through it a few times, it’s not that difficult. And, our live event now, we were, when we first started out 10 years ago, we were in the six or $700 range. We’re charging $2,000 per person and we get about 50 people to that event twice a year. So, that’s a nice little supplemental income into the consulting business. 

Mark Stiving: Yeah. Yeah, that works nicely. Works nicely. Oh, man. Paul, we’re going to have to wrap this up. Thank you so much for your time today. If anyone wants to contact you, how can they do that? 

Paul Klein: Yeah, the best way is that Paul Klein.Net is my webpage and then I’m on Instagram, Facebook, LinkedIn. LinkedIn is always a great spot, paulklein.tv is my username, I think on LinkedIn. But yeah, paulklein.net is the best bottle or subscribe to the Pricing Is Positioning podcast. If you’re into pricing right next to Impact Pricing. And you’ll see links to all of this in our show notes, I’m sure. 

Mark Stiving: Nice. Okay. You didn’t know this, Paul, but believe it or not, this was episode 50. This is a milestone. 

Paul Klein: Yeah. You know what? This is weird because you are my, I ended up moving you to 50 and I bumped Ron Baker. So, you’re my 50th, too. 

Mark Stiving: I’m glad I could bump Ron. 

Paul Klein: Yeah. Yours comes out pretty soon here in a while. I don’t know when yours is going to air, so, I won’t say, but funny how that worked out. We’re both, it is episode 50 awesome. Well, it’s an honor to be here. Mark, I really appreciate you allow me to come on your show. 

Mark Stiving: Oh, it’s been a fun conversation. Okay, so let’s see. My favorite part, I enjoyed talking about why solopreneurs don’t charge enough. Did you have a favorite part, Paul? 

Paul Klein: Yeah, that’s probably, that’s probably, I liked that part. I definitely, I also liked the, I think the value conversation light for people like yourself that don’t truly a hundred percent base your fee on the $10 million marks. You know, where you got to get into sharing financials and everything, but you’re still providing value, but it’s a value conversation light in terms of how you actually base your fee on. 

Mark Stiving: Yeah. And at a high price. That’s the key. 

Paul Klein: Yes. Yeah. So nice. 

Mark Stiving: And to our listeners, what was your favorite part? Please let us know in the comments or wherever you download it and listen. While you’re at it, would you please give us a five-star review? These are hugely valuable to us. Please don’t forget we have a new community, a championsofvalue.com. To find that you can go to community.championsofvalue.com completely free. It’s a place to make sure you see everything that me and my company publishes. And if you have any questions or comments about the podcast or about pricing in general, feel free to email me, mark@impactpricing.com. 

Now, go make an impact!

**Note: Mark Stiving has an active LinkedIn community, where he participates in conversations and answers questions. Each week, he creates a blog post for the top question. If you have a question, head over to LinkedIn to communicate directly with Mark.

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