How to price your services for maximum profit (Marketing Agencies & B2B Companies)

There's a happy medium of what you need to be selling your agency/b2b services for. Sometimes the price is too high, and sometimes the price is too low. You are more than likely running a primarily fixed expense based business, so you need to take this into account when determining how you should price your services. If reducing your price by 20% results in 100% more sales, it's probably a good idea to lower the price if you're primarily working off of fixed expenses. Marketing agencies & b2b companies are typically mostly fixed expenses in the form of labor. In order to service clients, you need to hire people to execute the work. Even if you haven't hired people, you still need to quantify how much your OWN PERSONAL labor is work, because it's still a capital expenditure into the enterprise.

You need to formulate what makes the most profit while taking into account the value equation (shoutout Alex Hormozi). Pricing is a variable of sacrifice. And the value your provide as a business owner is determine by the following variables:

1. Dream outcome
2. Perceived Likelihood of Achievement
3. Time Delay
4. Effort/Sacrifice

The price you charge is a function of sacrifice, and is in the denominator of the equation. If you don't have a guarantee or case studies for your agency, then the only thing you're competing on is price. So if you want to increase the value of your business, you can only do these things:

1. Make a higher claim about how much your prospects can make
2. Add a guarantee
3. Have case studies that show other clients have received high results
4. Add case studies that show other clients have received results faster
5. Charge less money
6. Make the client need to work less

There is nothing else you can do to amplify the value equation. So this pretty much comes down to a game of producing the most case studies, adding a guarantee, or lowering your price.

Operating a fixed expense business is like using leverage. If you go below a certain revenue threshold, you begin losing money. But as you keep signing more clients, the incremental profit of each individual customer goes higher. That means the more sales velocity you have, the more profit you make. It's worth playing with your pricing & the value equation to try and find the medium by which you make the maximum amount of profit for the least amount of headache.

[smlz]

You are the only person I watch on 1x speed. So much useful information 🤯

[jeffstropky]

Always looking forward to these weekly videos. Keep em coming

[DanJammess]

THE MAN RETURNS!!! Keep at it my bro :)

[tobiasburkhardt-]

Bro...I think I literally consumed all of your content last week between videos, mails and Twitter and now I have PTSD, because there have been value bombs exploding around me left and right!
Seriously, thanks for the great output and frequency lately, definitely appreciated!

Also, are you ready for the graphics to be stolen by some influencer again? 🤣
Take it as a compliment though...nobody copies a piece of shit, but only what they deem to be quality and aspire to be/do/have themselves ❤

[khush_patil]

Brother, you are a gem. You have to keep making these videos.

I’ll make a fuck ton of money a whole lot faster if I keep watching you.

[proyectodereciclaje]

This is better than finance class in college

[levimjohns]

Wake up babe new Fazio video just dropped

[yusufertabak]

currently stimulant maxxing while watching this

[Matthew-dirr]

Nice vid my man - quick q, what do u think of rev share?

[sunshinemodels]

little hint for those who don't get it.. .if your target market is homeless people.. don't expect much of a LTV on each client

[LiveScanGlobal]

Good video but no credit to Hormozi for literally using a picture from his book...?

[malcomgreen]

Please do cuss because youtube will not recommend your videos, and we can not watch your videos on family tv

[neildepressedtyson]

Got a question, how would you apply this in my instance where we run a carpet cleaning business? I have been thinking of lowering my pricing, I think the part that's hard for many of us is that there are so many shit tier cleaners at the pricing we could drop to that it feels like they're making the exact same money as us and doing 1/10th the work. I charge around $250 for three rooms, which might take an hour and a half, to two hours, then adding in driving etc and even people are telling me I need to go up, but while this is true, I do lose probably 60% or more of quotes.