Pricing legend Ron Baker joined me again (for a record-setting fourth appearance!) on Ditching Hourly to talk about the nuances of the subscription model for service business.
Talking Points
Subscription pricing is becoming increasingly prevalent, with the subscription economy projected to reach $1.5 trillion by 2025.
Pricing tiers can be implemented based on the range of services offered, providing flexibility for customers.
Providing outcomes and guiding transformations creates a better customer experience.
Non-rival assets, such as knowledge and ideas, can be leveraged through subscriptions, allowing professionals to serve more clients simultaneously.
Wasting customers' time is a major downfall in many professional firms, and subscriptions can help mitigate this by fostering consistent and meaningful client interactions.
Subscription is a straightforward pricing model that offers a set price for a defined range of services or products.
There is a potential shift towards performance-based payment models, where sellers are paid based on results rather than promises.
Quotable Quotes
“The more services we pile on brick by brick, we add more value.”
“If you're going to the market with an uncommon offering, you're commanding uncommon prices.”
“You are building lifetime annuities that are worth more than it costs you to acquire them.”
“A business model explains where revenue will be earned when services are provided free of charge.”
“I do think it's a way station. I think we'll move to a world where we're actually paid for performance and not promises.”
“We're too busy selling services brick by brick by brick by brick. And that's not where our value is.”
Ron’s Links
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Before you go!
The next time someone asks you for your hourly rate, I want you to stop what you're doing and head on over to valuepricingbootcamp.com to sign up for my free value pricing email course.
Hope to see you there!
