If Nobody Pays Your Price, Build Proof

Full transcript

So, change of plans this time, guys. I am opening up the episode. I got a surprise for Anthony. A nice little uh mix in the pot. Anthony, today we're gonna talk about giving things away for free, value away for free. What are your thoughts on that? As an entrepreneur, do you give services away for free initially? Yeah. Why? Some may argue if you give it away for free, it devalues the market now. The value goes down for other owners, gyms, whatever the specialty may be, or the service you're giving. Someone actually told me this as a filmmaker when I was offering certain services for free. One guy said, Hey, I just want to let you know, y'all, you're hurting all of us now. Because now the perspective on filmmaking is less than what it was because you're offering these services for free. So now when we charge, we're not gonna get nearly as much as what we're asking for. Because you're giving it away for free. What's your thoughts?

Who do you owe your accountability to? Yourself.

Yours.

What kind of society are we in the US? Capitalistic. My McDonald's, and I'm gonna go to Burger King and say, I'm gonna charge a penny less to make sure I get more consumers as Burger King's like McDonald's. We can't do that.

I completely blew the guy off. I think it's complete nonsense. But just the whole concept of some people is jarring. Free? What would you tell someone, Anthony, if they've been doing it for 10, 20 years, their experience in their field? If you want more clients and you want to scale, start off by giving your value away for free. Why? You know me, yeah.

We're gonna live in extremes. Mm-hmm. Right? Mm-hmm. Yeah, you broke your leg. You tore uh your ACL. You need surgery. What doctor are you going to?

What for ACL? Yeah, I'm saying ACL. I don't know what kind of what kind of physician is that. You're gonna go to a dermatologist? Oh, no, no, no, no. Are you gonna go to an oncologist? No, you go to ER first, you check it out.

You're gonna go to surgery, okay. Surgery, yeah. It's an orthopedic surgeon, right? Okay. You want to go to uh Mr. Joe Schmo that works at a public hospital and FNFL?

No, no, no, you go to a special, you go exactly where you're going for. You got skin problems, there's a lot of people.

You're gonna ask friends for reviews on who you're gonna go to, for what doctor you're gonna work with, find the best of the best.

Yes. Yeah.

That doctor's 10,000 more are you gonna pay it?

So then I get where you're going with it already. The question. Okay, hold on. So then it becomes some of you think maybe your job is just not valued enough. Take a step further.

Okay, we're gonna keep going in this rabbit hole game. So you're gonna go to that best of the best doctor, right? That doctor reason that they're an authority. We call it authority marketing, right? So that person's an authority in their field. Okay, so I'm Mr. Joe Smo, and uh I just became a doctor yesterday. I do orthopaedic surgery. You want me for the same price that you can get the best of the best for? The guy that's done 300 of them? How about only a couple thousand cheaper? How much cheaper do I have to be? Doesn't matter to me. I don't want you. The only word that's gonna make it so I could build a resume. Nah, not even though.

There's no way. Somewhere, but if you've it depends. So now you just answered it. That's it. You just answered it. People don't pay your price, that means they don't value you enough.

That's it. Correct. How do you increase value? By doing things for free to building value instead of community so people trust in your brand and what you do. One guy told me.

This is what, yesterday? Two days ago, whatever. He said, I don't respect free. Free is usually bad. I want to pay people for their time. You get what you pay for.

Okay, but if I have no experience and I'm doing something brand new, I come out and say, I'm gonna be top of the line. People are gonna look at me and be like, well, I'm gonna go to the guy for the same price that gets all the clients that goes to Maretti, and you have no one, you don't have a brand. So he's right. If you have an established brand, that's the caveat. You need to have an established, you need to be an authority in your industry. The second you become top of your line and you offer for free, then we run in problems. Unless it's charity work. Okay, well but when you're starting off and no one knows who you are, you don't have a brand, you don't have anything, you are just some guy with a camera showing up and saying, I'm gonna film. Why am I gonna spend $10,000 on you when I can spend $10,000 on this guy who's got a full team, he's produced all this stuff, right? So you offer for free with the caveat of value. How do you build value? You get reviews and you get content. So now you tell the person, yes, I'm gonna do the entire thing for free. It's gonna be a finite amount of time, it's not gonna be forever, right? On top of that, I want you need to leave me a review. So I start building brand credibility, and I'm gonna I could post your content indefinitely for like to show the work I've done.

Huh.

No strength, that's it. Sit. You don't throw in there if you want to work with me, this is what I charge.

You never do before. I wouldn't do before now, not in the beginning. Not from a new company. I know somebody, uh, what Homozi did specifically, which I thought was very interesting because he was talking about that. Giving people that's where I learned it from give for free, right? He gave for free with the caveat that you have to spend, I think he said it was like 200 bucks a month, and donated to a charity of your choice. So you still pay for it, but you're paying a charity, and then he's doing his services for free because it builds that getting used to paying for it. Wow. Huh. Now let's continue. Yeah, you 10 clients, you gave about, you did it for free. Finite amount of time. We have to be very clear on that. This isn't forever. Some people take you from now together. So you have to use it. You do three months of content for me. I am blown away, and I'm looking at what you do now because you spend all your time and effort, because you're not gonna take something for free and half-ass it. That's what you screw up. Yeah, I mean, you gotta be dumb now. You gotta be stupid and half-ass everyone. Then you go, okay, Yao delivers me this, and this looks the same, if not better, than this guy that was gonna charge for $10,000 off her. Now Yao comes and says, all right, it's gonna be $10,000. Yeah, let's continue this relationship. Let's go.

You know what it is? I think the problem becomes. Well, let me ask you this. As an established business, or established whatever you are, in whatever field you're in, do you offer any services for free if you're established? If so, why? Not new, not upbecoming, not new to the industry, established. Why? For content and charity purposes. Not to so you always charge once you understand your value and where you're regardless of trying to acquire new clients, you always charge regardless. How does free look to a new uh a potential lead if you're established? How does free look? How is it perceived?

Explain one more time.

So if you're established and they know that you have a resume, you have content and all that stuff, and you're offering your services for free because you're going into a new sector, whatever the case may be, how is that perceived with someone that is very well established?

It's the same thing as haggling, it's the same thing. You're devaluing yourself. I know I can get it for this price, why would I ever pay more? Hmm. So, good example. We have a 12-week program. Incentive is first time you come in the office, I tell everyone we offer this to everybody, it doesn't matter who you are. You commit to 12 weeks, you pay 12 weeks up front of either of the programs. We're gonna give you some stuff for free. We don't, I say, but we don't discount our programs. So it's the weekly price times 12. Zero discount. Zero. Not 2% off, 3% off, zero. You just get free valued stuff as extra add-ons for buying 12 weeks of front as opposed to not. How are they benefiting? The client? Yeah, they're getting free perks, things that are worth $1,000 for free. So at a certain point, because they're not discounting your pro your core.

So let me let me when you when you were coming up, right? The first 18 years, did you negotiate? Did client? Because I'm sure people came in and said, hey, listen, I give you this, did you negotiate? Of course. And when did you stop?

Three years ago. Why? Because the value of my product and people would haggle me all the time. I was like, I hate this. When you go to buy milk, do you hack on the price of milk? Do I go to the grocery store and say, I'm not paying $299, I want this milk for $250? What is the grocery clerk gonna look at you like?

Because they know the price is not gonna change.

Yeah.

What do you tell clients now? Not client, yeah. What do you tell clients now, members now, if they try to negotiate with you? I don't. But they're trying. Anthony, just do it. Anthony, how much do you charge?

$500. $500. I got $450. Yeah, totally totally understanding you got $450. The program is $500. You know, we do have a lesser program with less stuff in it that we could do for the I want that program. Sure. We're signing up on that program. We're just wanting to know one specific thing. You're cleaning for X, and you told me very specifically, yeah, how important this is for you to achieve X, and I want you to really get there. If you do choose a lower program, please note you're losing this level of support that's associated with it. I'm happy to do for you, but you need to make me a promise. You know what that promise is? What? You need to show for yourself. You need to do the extra stuff. Because you need these results. The only way you're gonna get the results is coming this many days per week. So as long as you can promise me right now that you're gonna come on your own, do this on your own, and learn on your own, take these extra steps, then we have to slow program for you.

I want that program, the $500 one, but I want it for $450. You won't, so you're so greedy. You're telling me I'm a new member and you won't give me $50 off?

I value our time. And if I that's what it, that's the end of the day. I value our time. I value what we offer, I know we're worth it's worth it. To be honest, this program should be worth more. So this is something that I think is a great deal for you that can get going.

So you're willing to you're willing to lose me as a new member for 50 bucks.

Yeah.

Because it's not just 50 bucks. What is it? It's 50 bucks times every single person that I have in my gym that is now asking why they paid more money than you did.

Oh, my voice.

I got it. That's how you do it. Because some people will see it as so as an entrepreneur, as a business, at a certain point you do not negotiate. I remember one guy was being interviewed. I think he was a billionaire or something like that. And he said, What is the the key to your success? He said, I don't negotiate. And I never understood. It took me a few seconds to understand it, but he said, I don't negotiate. Once I tell you my price, I don't move. And what I learned is you're gonna lose a lot of potential clients that way. A lot. But eventually you'll find people that value and will give you that price. The question is, are you willing to go through that drought with not gaining your brand has to build accountability and use its own accountability as leverage, right?

So accountability is being true to your brand. Accountability is not negotiating your price. Accountability is stand behind what you believe in and what you charge and what they get out of that price. That's accountability. Being like, eh, wishy-washy on shit, it's not accountability.

So you gotta know what you're worth first before you even do all this. Of course. You have to know what you're worth. You know what tells you what you're worth? What? The market. I was about to say you look at the market and you take a look. But also what and then what you're doing better than what others are offering in that market.

If I come and say, okay, that same program, I want a hundred thousand dollars composed to everyone else charging the thousand dollars, something ridiculously high. And every single person tells me no. What does that tell me?

Tells me one thing. You're not you're not worth that. The market is way.

My brand is not worth it. But what if you know it is, though? The market tells you otherwise, and that means you're screwing up and you gotta take accountability for your own actions to fix your brand. So then, so so then hold on.

If you're saying that, then don't worry about the market. Don't worry about what you think you're worth, what you value yourself at. What if the market is saying $2,500? You know you're worth $10.

Who cares about the market? Let's talk about really cool. I like this. All right. I was looking up uh for fun, therapists. Right? What do you think a therapist goes for an hour?

I don't know, 60 an hour, 75 an hour. Way more? No.

What if therapist coaches? 200 an hour. Oh wow. 200 an hour, yeah. What if I told you I know therapists have charge 500 an hour? And get it. What if I told you I know therapists are charged 1100 an hour? And get it. You do? What if I told you yeah, there's therapists to charge 2,000 an hour and get it? What's the difference then? It's still an hour one-on-one.

Well, what the difference is that certain people that are going to those therapies that are charging astronomically higher are they think they're getting more value out of it, experience, testimony, all that other stuff. Authority.

Yeah.

They have more authority in their field. Let's take business coaching, for example. I want to give you business coaching. I'm going to charge you $10,000 an hour. Are you going to do it? Probably not. Alex Ramosi says he offers you $10,000 an hour to do it. Are you going to do it? Yeah. Elon Musk sits down to $10,000 an hour. Are you going to do it? Yeah. Because they have what?

Authority. It's a success. It's proven. It's proven. They have the brand. They have success behind them. They have a brand. But how do you build that then before you get the numbers you want? How do you be? You need to show you proof that you can do what you say you can do. How do you do that? In the very beginning. Circle it. Holy shit. Excuse my language, you too. Yeah. Yes, you give it away for free. And then others will attest to it that he is incredible. And that's how you grow it. You know, it's funny. I always tell, and that's why I always say, and now it makes sense. It comes from a circle. Once you chase the money, you'll never get the amount you want. If you chase them, oh, I charge this, I charge this. And oh no, no. You have to build value first. You have to build powerful. Once you build powerful, and that's the whole point you and I were talking about off camera. The reason why, and I'll speak about my industry, I don't know my industry. Well, the reason why a lot of filmmakers don't make money, whether it's gaffers, DPs, uh P, whatever it is, anything, they don't make a lot of money because they have no home. They have no loyalty. They search for cash all the time. Always. I'm on a search for money, search for money. They have no home. So therefore, there's no law. What's impressive to most people, this is what's just think about it. What's impressive to most people, entrepreneurs, business, uh, uh, men and women, what's impressive to them when hiring you or when coming to your business is a long-lasting relationship. One of the most beautiful things in the world. One of the most beautiful, because most people can't sustain a long last. Why do you think people admire and adore couples that are old? 50, 60 years they've been together. Why? Because it's damn near impossible to stay with someone for two, three years. You've been together for how long? 30 years? And what's the next question people ask when you run into a couple that's been together for 20, 30 years? How did you do it? What's the um what's the trick? Why does everyone ask that question? Because it's impressive. Take that same thing I just said and apply it to your business. Loyalty. Have long-lasting relationships with people. Then you let those people be a testament. I've been with this guy for my mentor. I went into a place, uh, her gala. One guy saw me with the camera at my team. He said, Oh, yeah, listen, my daughter has a wedding. Do you do weddings? I said, No, no, no, sir. I don't do weddings. He said, How about commercials? I got this. Yes, I do commercials. My mentor jumps in, he's amazing. He's been working with me, Northwell, and myself, for over 10 years. This only guy I go to is Yao. I didn't ask. And right there clicked, I said, and that is what loyalty buys. Before you, when your work is so good and you're loyal to somebody, before they will speak for you. They'll speak for you. You don't have to brag and oh, we can do this, we can do this. The people that you served will step up to the plate. Mike's amazing. Take them. The power of referral, man. So you're right. But you all you start off with either giving significantly low to prove I am damn good at what I do or free. You do it for free. I am loyal. I can take criticism. I'm respectful. I'm on time. I'm punctual. That's it. Wallets open up. How much do you charge? Hey, I'm going up to this, but no problem. I got you. Matter of fact, I've done it before. I've had people come up to me, Yao, can I get this much money? How much did you ask for? This much. I'll double it. Say, what? Yeah. I'll double it. You want that, right? I'll give you double what you asked for. Because of the loyalty and how long you've been around and you always exceed expectations. I'll double it. Wow, dude, thank you. No problem. So people open up their wallets when you prove you are loyal and you exceed expectations and you execute. That's the key. So this whole value and giving it away for free, that's fine and dandy. A lot of people can do the same thing you can do, is offer for free. All it is is just turn it out, I'll give it to free. But can you execute? Can you execute though? Can you get the job done? And even more so, can you get it better than what they expected? And you know, it's crazy. One thing about me is I it's just it's always been this way. In order for me to learn or grow, I have to talk. I don't know if you're that way. Oh, yeah. It's very weird. It's very, very strange. I just have to start talking, and it all starts to click, and I get it now. It all comes from lack of trust. They don't know you. So why would I give you this kind of money if I don't know you?

You said the second part of that, but then haven't doubled down on the second part of it. I want to reiterate something really important you brought up. Okay. The guy who came to an ask you if you did weddings, you said no. Because all what you're saying is true, but you have to specialize in a specific niche. Sammy, you and I disagree with that that one had to be.

I can't do that. No, no, let me elaborate. Let me elaborate. What I mean by you're right on what you're saying. This is not new. People know, yes, you have to be in a niche. But I feel like niches limit you. They limit you. How? Okay, take filmmaking, for example. Um, let's say you only do weddings. Wedding season dries up. What do you do now?

You charge enough during wedding season, you don't worry about it. You're so good at weddings, everyone wants you. You book straight out, you charge double what everyone else is getting, and you live coast the rest of the year.

All right, that's a good point. Huh. All right, so then the first step is finding out what um, I guess, sector or cat or area.

It's hard to let's let's that's what I'm saying is it's hard, and I'm doing it right now. Yo, bro, it is because currently, right now, we still offer well before the time this comes out, it's begun, so I'm gonna cut it today. Kickboxing class and uh basic membership.

Okay.

A medical fitness company, that's our brand. Do either of those align? So if I'm doing programs that don't align with who we are as a company, what and my employees are confused, because like, why are we offering this? The clients that come see it and get confused. I thought this was something else. I'm diluting my brand. Diluting it, but trying to capture a few extra hundreds, it's greediness.

I used to do that, and this is why I also trimmed the amount of packages I had. I used to have so many packages. Me too. Oh, you too? I had 45. Oh no, hell no. You had 45. I had 45 for no way. Oh no. Well, business psychology tells you when you give the client or the customer less to choose from. The potential's higher. When you give them a whole red, blue, yellow, green. I can't I mean, I can't choose.

I mean you know what else makes it easier? Operational load. You can get better at it. 100%. You have 45 programs, you know how many can dictate 45. Well, this person's on this one, they get this, and this person's this one.

Nah, nah, nah, nah, nah. It's too much. Oh my goodness. Anthony, you know how many programs I got now, bro? I said programs. How many packages I got now? That's it. You get A or B. Even three sometimes becomes an overlook. How many you got? Three in a silent fourth. Okay, you know what? Never mind. Yes, I have two in a silent third because the the the meta ad marketing side, but I really don't You go to you go get coffee. What sizes do they have? Oh, my boy's nine! Small, medium, large! And if you're greedy, extra large, but yes, small, medium, large. I I don't know. I just believe the more concise you are, and simple. Right. It depends on what you want.

If you're price leveraging, no, elaborate. What do you mean? Let's do easy math. Small, medium, large. People will say $1, $2, $3. Right?

No.

That's not what they do for popcorn or soda or anything. No place does that. It's price psychology. You take the middle, the medium, and you leverage it. You move the medium closer to what the small price is. Now say $1.50. So now it's a dollar, $1.53. What are more people more likely to buy?

Yo, they always get me at the Regals that way. They always get me. Oh, the large is only 25 cents more. Oh, okay, fine. I'll do it.

Now you want more people to buy the large. Yeah. Where do you leverage the medium? Closer to $2.50. So now it's a dollar, $2.53.

Oh, that's crazy, man. Holy smokes. Dang. Yeah. I always wondered why they get me to buy the large popcorns. They always did it. It's only 50 cents more. I'm like, okay. And that's what I think. I was like, wow, he got me again. I was trying to get him. I got it now. Holy smokes, it's psychology. But yes. So what's your thoughts on two uh packages? I think two or three is the sweet spot. Two or three, yeah. 10 or 12. Yeah, two or three. Um, so that's what I learned. Two or three packages, two packages, I'm sorry. And like a silent third, that's what you call it, yeah, which is the market. But yeah.

You have to have enough resources and operational load to handle it. Um, that's simple. Two packages? What do you mean? I mean, yeah, two, but see if you go in three, understand it comes with more operational load.

Of course, the more packages, the more you have to do. So everyone's different. So a hundred and yeah, yeah, yeah, yeah, yeah. And the less, even if you have more people, it's easier. Being a new company, out of one or two. Yeah. But even as established all I'm saying, iPhone, how many uh choices do they have when iPhone comes out? Two. The the Pro and the Pro Max. Simple. Operation to make the phone. If they have 50 phones, ridiculous. The demand's insane. They want that phone. No, the 50, it'd be crazy back. We just got two. That's it. And the price ranges, five, $500 difference between. It's simpler. So, and then you get a small, meet, and large. You get to choose. And then you obviously you gauge according. So that, and then not negotiating once you build value, but you build value through loyalty and you grow with companies. Some people look for so many clients. I got 10 clients, I got 12 clients. You spread yourself too thin. It's easier to have five clients at 10,000 a pop than to have 10 clients at $1,000 each. And I'm growing with all of them. You have the chance. And then the way you test is you test these clients. You raise your prices. There's gonna be some people that dwindle away, and there's some people that stay. You have to. That's just the name of the game. So, yes, it's not negotiating, raising value before raising price. This comes with this now. This is what we're gonna do. And um, offering value for free, and I think building relationships. I always tell every time I work with somebody new, build, do not chase the money. Money's loyal to no man. Trust me on it.

I think the other side is important too to think about price shopping. Let's talk about that. So, because the show is not just for entrepreneurs, it's for everybody in every sense, right? Yes. So, as someone buying something, consumer, it's knowing how to get the best bang for your buck and what are you gonna look for and things you're gonna understand. I'm gonna go shop for the best of the best. I'm not gonna haggle with someone because what are they gonna think of me the whole time? If I go to Yao and Yao tells me a thousand, I go, no, no, no, five hundred. And then we start haggling. I'm your customer that's just gonna get pissed off because you're gonna get pissed off at me. Right? You're gonna look at me and be like, I make way less off of this guy. I don't give a shit. I'm gonna pretend, but it rubs off. No, I see what you're trying to say. Right? Yeah, as a consumer, it's also important to understand haggling isn't always the way to go. No, it's not. You're eating up headspace, you're especially service businesses. Like of course, you're souring that relationship right off rip. You want to be treated and taken care of just like everybody else.

You're right. Yeah, you actually are right. Trying to negotiate, go lower. Give me you're already destroying the relationship from the beginning. But if you pay a certain price, and that's why, again, going back to my employees, when they ask, hey, can I get 100 more? I'll give you 200 more. What do you think they're gonna do for me now? I'll give you 200 more. They're leveraging the relationships. Yes. This guy just doubled what I asked for. Now I'm gonna go above and beyond because that means he values me.

Do you know that one of the number one things people pay for with higher tickets and service? What? Priority. Prior access priority booking. Yes, yes, yes. Those are the biggest turnaround items you can do. Yeah. Yeah. Yeah. Because people want that. They'll pay a lot more just activity. Yes. Which, as an employer, like someone who owns a business, who do what people do you want more of? Those people. They're the top tier. I'm gonna I want to split give them more attention. I want to give them all everything they need to make sure they're happy. So they're paying for the priority, they're getting the priority. Now, who's the stickiest clients? Oh yeah. Oh yeah. Our highest membership average ticket length is 36 months. It's the longest. Average ticket, if you exclude that out, is nine months.

Oh wow. Wow.

Wild.

Which is LTV. Yeah, like the length. Yeah, yeah, like LTV. Wow. Well, that's how, and that's what you you filter, and that's why you raise prices, and eventually you you start climbing the ladder and go up, and those little ones fall off. Look at it both ends. That's all I ask. Like, as a consumer, like you start price cycling, you start price shopping. Then don't expect top-tier behavior. Yeah, that's it. There's a reason why people are first class, they charge certain things. You're not gonna eat when first class gets it. You're gonna get the cookie, the crumbs, and the juices that they give out. You go first class, you're gonna get certain things that the economy's not getting. Coach again. Exactly. I agree. Great episode, yeah.

Thanks, guys. So think about something in your life that someone you've talked to, whether you own a business or you shop at businesses, and what accountability do you own to yourself to understand that maybe you shouldn't have started a relationship, or what relationship can you take accountability for inside shopping to help leverage that relationship and make it better? Comment below. Let me know. Let us know. Like, comment, subscribe. We're out.

Peace.