Helping a Data Firm Price Bigger Clients

0:00Unternehmer/Gast Hey Alex, my name's Jason. I have a data team staff augmentation for healthcare practices. So data pipeline, visualization, warehousing. One of the challenges that we have we we switched to a fixed fee pricing retainer type of model and that's been working great. But as clients get larger the complexity increases more EMRs, more PMs, more other systems that we have to manage. How do we scale our pricing and how do we test that new pricing model when there's industry norms?

0:28>> So Dr. Eric He he does pricing. Nobody um Um did I say that right? Your your name Okay. You are I say right you are I K, right? Okay. Anyways, um your probably Sorry, this thing's freaking me out looks like it's going to roll. Okay. Uh okay. Sorry. Um how would you So you just have a fixed fee but for the ones that are bigger so you would just have tiers. Be like between X and X it's this, between Y and Z it's this, between V and W it's this.

1:01And so that way um you could still do a waterfall which by the way is an incredibly uh powerful way of selling. So I'll walk you through it. So let's say Um let's say it's like 10% uh from you know 0 to 100k and then it's Oops, sorry. There 100k. And then it's uh you know 7% from 100k to 200k. And then it's uh you call it you know 5% and then you know 3% whatever, right? For each of the 100 you know increments between here.

1:32The thing is is that most customers will assume based on survivorship bias that and they're all optimists that they're eventually going to get here. But the blended rate is going to be closer like 7 uh percent when you price via a waterfall. And so you just make it not retroactive. So it's like I'm still going to be charging 10% of this so that's 10k and then I'm going to charge 7% of this which is going to be 7k and then I'm going to get 5% which is 5k and this is going to be 3k assuming I have fixed intervals in terms of how I'm making the jumps. And so then my blended average would still be more absolute money for you.

2:04>> Is there a tiered approach when you when you talk about just having tiers? So for me, I think about it in terms of like provider accounts. So if it's 20 providers or 100 providers >> use Yeah, I'm using money here, but yeah, you use the number of providers, number of seats. >> Yeah. >> Any of that would work. Yeah. It You just want to make sure that it's tied to the core value metrics of the business. So for them, it's what what metric, when it increases, is a proxy for the amount of value they're getting from your services?

2:29Alex And so if they have, you know, in an e-commerce business, it might just be revenue. In a uh uh business, there might be the number of providers, right? That's like that's a pretty good proxy for how much money they're making and by extension, how much they can pay you for providing the service. >> Yeah. >> But this is what I would do. I'd do a waterfall. >> Okay. >> I think you've had the the fixed fee thing, and that's fine. It's just fixed fee up to here. And then above that, it's another another fee, and it's less than the original one. So if they say yes to the first amount, then everything else after that should be like a a shoe-in. But from a sales perspective, everyone just goes to this one and just assumes that's what it is, just psychologically. This is just what I've observed in sales processes. And so have a super high one that's small that you think no one will ever get to anyways, and it's kind of a reverse anchor in terms of the price.

3:13>> Got it. Okay, thank you. >> We've done this with every software company that I've had, by the way. It works really well. Yes. >> Hey Alex, I'm Martin. Thank you for such a great event and all the content you put out. It's helped me so much. Uh my question is, I do motocross coaching. Yeah, dirt bikes. And uh my question is, what would you do if you think that your main business model just can't scale uh over a million a month?

3:44>> It is just the main coach The the main business model is coaching people on how to >> Well, we pretty much do, yeah, three products. So one of them is an experience in California for international people. They fly out, stay for us with two to three weeks. Uh we, you know, rent them a bike, coach them, etc. Uh the other side of the business is I fly out to different countries, have a group of 30 people, coach them for two days, and then we just started doing online because I felt like the first two just were never going to be able to scale to like a real

4:13>> Yeah. [clears throat] >> Um I disagree. I think any business can scale. It just might be a slight permutation of what you're currently doing. So, there's no reason why you can't do more motocross events. Or like you can't Now, if it's like at some point I'm on the plane now I'm on a plane every single day flying around the world, that's when you hire a team of people and you have that checklist of what are the intangibles that you do. And then what's the What's your brand name? >> World Moto. >> World Moto? >> Yes. >> Right. So, then you have a World Moto, you know, super master certified coach who's done at least 1,000 hours under me. And so, he's the one who you can go.

4:44Now, he's not going to be able to price at the same price that you can, but you won't have to go. And so, fundamentally again, if you have a heavy service business, which is what you have, it's going to be recruiting, hiring, and training for that business so that you can duplicate what you do with other people. And for a high-skilled person like that, you'll usually want to give some sort of percentage of the profit from the events that they're running uh so that they feel like they're not just uh getting hosed out. >> Okay. >> That makes sense. But yes, you absolutely can grow past a million dollars a month. You'll just be doing more. More better now? You'll just be doing more events. So, then that might mean that the actual constraint is going to be the advertising itself.

5:20Because right now you think about the amount of people in the world that want to get better at moto, there's more than a million bucks a month that's going into that. >> Okay. >> And so, it's just what percentage of that do you capture? Now, that's different than it would be hard, but welcome to business. >> Yeah. Yeah. >> Rather than like oh, I should change everything I do. It's like no, we just have to confront what's hard about this and then learn the skill. >> Okay. And just just a quick follow-up. Should I Should I keep doing all three services just focus on one? >> I don't I If I had to pick, I'll bet you that the majority of your revenue comes from uh you flying out and people flying to you.

5:50>> Yes. >> Right. So, do more of that. Forget about the online. >> Okay. If you're a business owner and you're not growing as fast as you'd like, I'd like to give you a free gift. So, my team and I put together the $100 million scaling road map, which is basically 200 hours of us looking over all the portfolio companies we've had and what stages of growth they went through and more importantly where they got stuck and how they got past it. And so, we broke it in these 10 stages and we made this little kind of quiz thing where if you put in your business information, it'll tell you where you're at and the most important part for you, what to do for each of functions of the business across product, marketing, sales, customer success, recruiting, IT, human resources, and finance. And so, no matter what you're struggling with, someone else has already struggled with it and solved it. And so, I'd like to give you this thing absolutely free. You can go to acquisition.com/roadmap, plug in your business information, and if you want us to actually help you deconstruct the business and you're trying to scale, we'd love to help you out. On the thank you page, you just book a call with my team and we will look at the business, see if we can help, and if we can, we'll invite you out to Vegas and we'll do this in person live.