Jonathan Stark on Value Pricing Educational Programs

Unless you enjoy doing sales, I wouldn’t bother value pricing educational programs.

Why? Because selling them as productized services works well. He goes on to offer advice on how to do it anyway:

  • Meet with the prospect to have a sales interview
  • Use The Why Conversation to uncover the buyer’s underlying motivation
  • Get them to define a success metric for their desired outcome (i.e., “What would a home run look like?”)
  • Look for cues that would indicate a ballpark range for what they desired outcome might be worth to them (TIP: Capture any numerical references, even if they are relative or non-monetary)

You use that information to estimate the value to the buyer, then you calculate price points (typically three) using the value to the buyer. The lowest price point in the formulas is 10% of the value to the buyer. You then figure out what you can provide to fit those prices – you consider what you’d be happy to do for that much money.

I thought Stark’s explanation was short, good, and relevant to CF. It’s probably pretty hard to understand if you aren’t already familiar with value pricing material from Stark and others, though. It’s basically a summary that was much easier for me to read due to my background knowledge.