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Emily London Miller joins Nate Woodbury as they discuss the right pricing for your services and products. This episode serves to help you make the process easier by understanding what hierarchy value is. Watch on to learn more about how to price your services or your product.
Welcome back. We’re talking about how to price your products or services. We’ve got Emily London Miller here. And the conversation that we’re going to have in this video is going to make this process a lot easier for you. Before we hit record on the camera, we are having a conversation about the hierarchy of value. And I think that’s a good place for us to start. You know, it’s a little bit different. Value is different necessarily from the price that we charge. But let’s talk about that first. What is this hierarchy value? Where did you hear it from? -Okay. So, I found it online. It was like an article I think even on Wikipedia. -We don’t know the exact source. -Yeah. But I mean I literally think if you just search hierarchy of value. I’m pretty sure that’s what it’s called or something to that effect, you can find it. They also turned it into a book. And I haven’t read the book. Just from what I gained from the article. It’s basically this concept of that people are willing to spend certain amounts for certain types of products or services or goods, okay? So, the article kind of starts by saying, you know, the bottom tier what people are willing to spend the least on our commodities. And they used in that article coffee beans as the commodity that they’re they’re using this example. -It could be lumber, it could be cotton. It could be… -Pictures. So, in my case, I’m a photographer, right? And I have an iPhone that takes tons of pictures, right? So, pictures are worth very, very little at the end of the day, okay? So then at the next level up where you’re willing to spend a little bit more. Let’s say for example, per cup of coffee is on a can of Folgers coffee or whatever brand it is that you buy but it’s a branded product at this point. So, it’s product at this next level of them. Okay? And in my case, maybe that’s like an Emily London portrait, okay? So, it’s still at the bottom of the hierarchy really when it comes down to it. Even though it’s something that I captured or created for them. Maybe it’s the delivered photograph with you know printed and matted and all that. -Well, you assume that there’s a certain level of quality control when it comes with a certain brand versus something else you just don’t know. -Sure. And you know what? I’ve had conversation with other photographers where I’m trying to explain to them the conversation that they have with their client is sometimes too focused on the lower-level stuff and not the higher level things that are coming up. And so, what will happen is people get really wrapped up and “Well, I only… I only give printed images. I’m not digital side. I’m not at that level. You know, I wouldn’t work with somebody who just wanted digitals.” And that’s kind of putting the focus in the wrong place. -Okay. So, what’s the… What’s the next level of product. -Okay. So the next level above product is service. And I just want to back up and say really quickly all of these foundational things are critical. They are essential to having the higher value stuff as well. So, you have to have each of these locked in before you can really be, you know, talking about the higher level stuff. So obviously they’re important. They’re just not what you want to spend all of your time talking about. So, the service level in the coffee example is like when you’re at a cafe And you order a cup of coffee. And the waitress is going to come around give you coffee, keep it warm. She’ll keep refilling your coffee and you’ll probably spend more for that cup than you would have spent for your Folgers coffee. But it’s maybe in the realm of a couple of bucks. Okay? In my case, you know, that’s when you’re talking about a photographer who shows up on time, who is clean, who makes you feel like you’re not in a physical danger. You know, that kind of level of service. They meet with you when and where they say they will. That kind of stuff can be keeping your commitments. -I like the restaurant example because I definitely recognize I’m paying a lot more for that as a service for somebody else’s doing the cooking, the preparation for it or you know, even compared to just buying a packaged product, I’m paying a lot more for that service. That makes sense. Okay. Now, I think I’m guessing the next one is going to be experience or we go in the right direction? -Yeah, exactly. -Some restaurants not just provide a service where they hand you the food and it’s provided in the environment but it’s like. “Oh, this is an experience and you’re paying even more for that.” -Yeah. You’ll find it at some restaurants and in fact, in the coffee example, they talk a lot about Starbucks specifically in the article, okay? So, Starbucks when they originate, $5 for a cup of coffee was a little bit obscene, right? It was unheard of almost. And what they really focused on with their baristas with training them was creating an environment where you would have some kind of experience or a feeling. And so, they trained them to be able to educate people about coffee if they aren’t already very familiar. They teach them to be maybe to banter and to play. Even one thing that they tell them to do is to spell names wrong on the cup on purpose. Just because it makes you laugh or it gives you a feeling of just being involved in something like an inside joke. They also… If you think about what else you get when you go to Starbucks, you’ll get a feeling of maybe comfort if you’re in a foreign country and you find a Starbucks. It’s like, “Oh, that’s going to taste familiar or that environment. I know what to expect.” Or maybe it’ll even be a feeling of prestige. You know, you can even buy the Starbucks coffee you know, cups to take around with you and even put your own normal coffee in it. But there’s something about carrying a Starbucks coffee that gives you some kind of a feeling or else you want to do it, right? So, anyway that’s part of, you know, in the experience situation. For me an experience is I want you to feel important, I want you to feel seen beautiful and loved. And to feel like you’re the star for a day, right? So, that’s kind of where… If we’re really focusing on what are the feelings that you’re going to get, that’s going to be the answer to what the experience is. -So, I’ve experienced many different photographers over the years had different experiences. I would have… I would never categories to any of them and tell working with you as an experience. The other ones, it’s a service. I didn’t really connect with the photographer but I was just there to get a result. They were supposed to know how to push the button on the camera and get this photo for us. But when I had experience with you, first of all, it started before the photo shoot. Just planning for it, talking about it. You gave me a lot of things to prepare for. And I don’t want to give secrets away about what comes after experience. But you kind of talked about the purpose of what we’re creating when we really created that you in our mind. And then when I showed up for it, the word that keeps coming to my mind is I felt pampered. I felt like everyone… You have a whole… You have a whole crew and the whole crew was there paying attention to me. Making sure that I was comfortable, that I felt great and that I was taken care of. And it was wonderful whole time. So. I… That’s a really cool thing. And obviously, if people are paying for an experience versus a service, the price point, you got to expect it could be a lot higher. -Yeah. And if you actually compare, you know, where we went with coffee. I don’t even know how much raw coffee beans cost. Folgers kind of coffee per cup, it’s probably less than a dollar, I would guess. Probably several cents. The service at a restaurant maybe 2 bucks. And then we’re talking about Starbucks. $5 is more than double, okay? So conceptually, you can get an idea of where we’re going with value. It’s more than double, more than double, more the double. When we get to the next level, it almost can become exponential. And the next level is transformation. So, in the article, it kind of cuts off there. It says like, “There is no coffee correlation with transportation.” Yeah. And I kind of laughed because I had just watched a documentary on Netflix called barista. And it’s… This incredible like hour-long look inside the National Barista Championships where… I don’t know how much they spend to like become a contender. But it’s I think over 100 bucks, right? To be considered. And what they do is they have like a year to prepare their coffee. And it’s like they’re going to find their beans and they’re brewing method and then not even… Not even that but like what kind of cups they’re going to put them in and then how they’re going to like perform making the coffee for the judges. And it’s… It’s so to the point of like if you drip, you lose points and like… It’s so at this next level that you are really competing for the opportunity to become the best at what you do. Which I would say if that’s not a transformation, I don’t know what is. So for me at that point, you know, it’s like, “Oh, no, no, there’s definitely a coffee version of transformation.” And I laughed you know at the barista that I was like, “This inspired me like I wanted to become a barista.” We’re watching this this you know documentary. And so it had a profound effect on not just the people who are contending but more people watching it. At any rate, I would say that in my industry, a transformation, you know, if I’m going to offer my clients a transformation, obviously, there’s a physical transformation component because I do the before-and-afters and we’ve got the hair and makeup and all of that. You know, bringing you out beautiful. You know, your beauty out. But there’s also the emotional and maybe even spiritual transformation that I really focus on with my clients. So, you know, you kind of touched on that before where we kind of get clear on, you know, how do you want… In your case, you were doing your photo shoot for branding, right? So, how do you want your clients to see you? Who do they who do you want them to meet when they’re looking at your portraits? Kind of getting clear on what are the different aspects of yourself that you want to come through? And maybe some of those aspects, you’re already really comfortable and confident in and proud of. And maybe some of those aspects are parts of you that you’re growing into. That you’re not super familiar with yet, that you’re wanting to become to next level into. And so, I often invite my clients to think about those sides of themselves as well so that we can capture those sides in, you know, proof and show them. And say, “Here’s that side of you.” And then it gives them this feeling of being able to channel into that aspect of themself. A lot of my clients even it’s not a new thing that they’re growing into. It’s like a past thing that they’ve lost touch with. A lot of my clients are moms… And you know, raising kids kind of puts you in a survival mode that shuts down parts of yourself. And so when I talk to them about I want to help you reconnect to those parts of yourself. That’s an opportunity that’s almost spiritual in its, you know, how personal it is and how emotional it can be. So, that’s really what I spend most of my time talking about when I talk to my clients before they book with me and they’re not sure how they feel about doing a photo shoot that cost as much as it does. That’s where I really, you know, this is what I’m going to do for you. -Right, awesome. So, as you’re thinking about how to your products or your services or your experiences, it’s going to be really helpful… At least it’s helpful for me to think about it in terms of this hierarchy. If you’re going to compare what’s out there on the market, similar to what you do is what you’re looking at. Is it a commodity? Is it just a commodity? Or is it actual product? Or is it you know, it’s a service? And where do you sit? And if you want your services to be a little bit higher or more elite, thinking about, “Okay. Well, I’m going to provide an experience or I’m even going to… I’m providing a transformation for my clients here.” So, it’s not necessarily direct answer on exactly what you should price. What you’re offering. But hopefully a good framework. If you enjoyed this video, be sure to give it a thumbs up, both here on YouTube. Or if you’re watching this on LinkedIn, where can they find you, Emily? If they want to find more about you and your hotography? -So online, I’m at Emily londonportraits.com and on Instagram at emilylondonportraits. -Awesome. We’ll see you in the next episode.