Podcast August 8, 2023

E259 | Exploring A Bold Approach To Value-Based Pricing with Blair Enns

In the world of professional services, how you approach sales and how you price your products or services can make or break your business. Our guest this week has seen how shifting from a price buyer to a value buyer mindset has a massive impact on the success of a business.

This week we’re learning from Blair Enns, the founder of Win Without Pitching. Blair is known for his impactful insights on pricing strategies and value-based selling in professional services, whose journey began 21 years ago. He perceived creative professionals as people working in advertising or design, a mindset that gradually transformed with the shifting dynamics of the creative firm market. He realised that creativity was more than that; it was the ability to see, bring a novel perspective to a problem, and propel entrepreneurs towards their vision.

He now guides them through the process of selling, not as a predatory act, but as a path of facilitating and helping clients buy. Blair’s path was not without its challenges. He grappled with the balance between selling as an expert versus a vendor, and the different outcomes each role could produce. While being an expert provided more power and leverage, being a vendor resulted in reduced impact, lower margins, and a higher cost of sale. Recognising the importance of vision and selling, Blair began to view these roles as the foundations of leadership, a perspective that helped him let go, take risks, and say no in order to scale his business. Embracing these lessons, Blair is now inspiring others to do the same, helping them navigate their own journeys in the world of professional services.

Download and listen to learn more.

On today’s podcast:

Overcoming the fear of selling
Winning without pitching
Implementing a bold pricing strategy
Shifting from price-buyer to value-buyer

Follow Blair Enns:

The art of value-based selling

Blair Enns is the founder of Win Without Pitching, a sales training and coaching organisation for creative professionals. His mission is to change the way creative services are bought and sold the world over. He is also the author of two books on selling and pricing. His book Win Without Pitching Manifesto is aimed at creative firms. However, its principles and frameworks often apply outside of creative businesses.

Win Without Pitching Manifesto, has sold over 65,000 copies and launched a revolution in how firms approach new business development. More than a decade after its initial publication, annual sales of The Manifesto continue to increase yearly.

Blair’s other book, Pricing Creativity: A Guide to Profit Beyond the Billable Hour, is a comprehensive guide to value-based pricing.

Since 2017 Blair has hosted, along with David C. Baker, the highly-rated podcast 2Bobs: Conversations on the Art of Creative Entrepreneurship. 2Bobs routinely tops surveys of agency owners on their most listened-to and influential podcasts.

Blair lives with his wife and business partner Colette Enns in the remote mountain village of Kaslo, British Columbia, Canada, a short 10-hour drive from Vancouver. “I couldn’t think what I think if I didn’t live where I live,” says Blair.

Overcoming the fear of selling

In the creative world, the word ‘sales’ is never used, says Blair. Instead, they use New Business Development, which is code for sales and a little bit of marketing, networking, PR, and “a whole lot of building of 75-page decks”. But, Blair decided that they needed to take back the word and lean into it.

Blair argues that we recoil from using the word sales because we don’t really understand what it means.

“We think selling is the act of talking people into things. And we think this because we ourselves have been victims of predatory sales practices. If you want to create a horrible sales experience, take a really highly competitive driven person, somebody who’s really competitive, train them that selling is talking people into things and put them on a full commission compensation plan or a highly leveraged compensation plan, and then you will create”.

You can’t sell expertise, you can’t sell an advisor relationship, adds Blair. That way, you can’t treat your audience as prey. The selling is a coachable moment. The sale is the sample. So if you’re selling expertise, ideas or advice of any kind, the client is trying out what it is that they would buy from you in the sale itself. So you can’t be this sleazy sales predator. You have to sell. The way that you deliver it is the sample of the engagement to follow. And not only are they trying it on what it’s like to work with you in the sale, but the roles that each party will play in the engagement are also established in the sale.

“In the sale, there are two positions you can occupy. You have to choose. Do you want to be the vendor, or do you want to be the expert? Now, a vendor has numerous direct alternatives. Therefore the power lies with the buyer, the client, and the expert is seen as meaningfully different. They have power that they can leverage in the sale to change the way their services or products are bought and sold.

“You should endeavour to enter the sales conversation from the position of the expert. And you should endeavour to maintain that expert position in the relationship throughout the entire arc of the sale. Because when it comes to the close, you can close from the expert position or the vendor position. You’re less likely to close if you’re seen as the vendor by the time you get to the close. And if you do close, it’s going to be at a lower margin.”

And even still, if you do close, you will have impaired your ability to do your best work. Because the roles are established, the client is driving, they are calling the shots, and you are responding. Your ability to have an impact is diminished, and so is your ability to make money. Your cost of sale has gone way up. You wake up one day, you look at your client list, and you’re resentful of your clients.

“They don’t recognise and value expertise, they don’t pay you well, they don’t treat you well. There’s not enough money in the business. And you think, how did I get here? Well, you got here one new client at a time, starting with the way you showed up at the very beginning of the sale. So if you see selling as the act of talking people into things, you’re already at a disadvantage. You need to see selling as the act of facilitating, the act of helping clients buy.”

Win Without Pitching Manifesto

Blair’s book, Win Without Pitching Manifesto, is 13 years old and has sold 85,000 copies. When he wrote it, Blair designed it to be a timeless book, so he expects it to be around for a while. However, he doesn’t want to claim any responsibility for how free pitching is less common in the creative firm space.

“Maybe I could take a little bit of credit, but really what’s going on is you have this internet search that drove the pace of specialisation, no longer had to put up with a generalist when a specialist was easily found by typing a few words into Google. So it just rapidly drove the pace of specialisation.”

What Blair points out about the creative firm market today is that it’s bifurcated. On one side, there are legacy businesses, which are typically the global ad agencies and those trying to get to global size. They’re all quite undifferentiated from each other. Therefore, the client has all the buying power, and they use that power to continue to demand that the sellers, the agencies, give their thinking away for free in the sale. So free pitching is still rampant among pure ad agencies, he adds.

But on the other side of the market – which he calls the modern side – you have these vast ecosystems of specialist firms that incorporate different disciplines like design, software engineering, consulting, AI, or social media. And they combine them in unique ways and target them at unique specialist markets.

“So you have tens and tens of thousands of these specialist firms where pitching is no longer the issue that it used to be. The book really isn’t about getting out of the pitching business. It really is about taking control back in the sale.”

A bold take on pricing

Blair’s book Pricing Creativity a Guide to Profit Beyond the Billable Hour was the first pricing book in the world that was priced based on the principles in the book. It is available at three different prices, based on three different formats. The ebook is $100. The ebook and the hardcover as a pack – which is essentially a manual – is $199. And then the ebook, manual and a series of videos are sold at $320.

“From these three options, which do you think is the best seller? “You would think the middle one would be the most common option […], but it’s the most expensive option and is by far the best seller.”

For many people charging $100 for an ebook is outrageous. And something interesting about pricing is that we sell the way we buy, says Blair.

When he launched Win Without Pitching as a consulting practice in 2002, Blair wrote down everything he knew about the field of selling in the creative services space. He had a co-author who ran a sales training program, and she was effectively his business partner for a few years. So they wrote this together.

“I read a line in one of Alan Weiss’s books, it must have been Million Dollar Consulting, and I closed the book. And I was just transformed by this sentence. And I thought, if I had paid a consultant to give me this advice, what would it be worth? What would I pay? And this is early in the life of my business. I thought I would pay $10,000 for this. If I had paid $10,000 for this advice, it would have been worth it.”

It was after finishing that book that Blair decided he wasn’t going to charge $25 for his book. Instead, he put the price at $1,000. He launched his consulting practice with a book that was priced at $1,000. And that’s how he built the business in the early days. You could buy the package of a book with consulting calls.

“But I already knew that some people are going to be constrained by the package. They think, well, it’s a book. I cannot process the idea of paying $1,000 for a book. But I knew who would be the people that I could help. So the people who say to me, I’m not paying $100 for a book or $320, I can’t help those people. So it’s a great sorting mechanism.”

Shifting Mindsets: Price Buyers to Value Buyers

Pricing is determined by value, not cost. This notion, frequently highlighted by Blair Enns, invites sellers to shift their approach from viewing customers as price buyers to value buyers. While price buyers are typically conditioned to focus on the cost of an item, value buyers prioritise the intrinsic worth and potential benefits a product or service could confer. By adopting this paradigmatic shift in customer perception, sellers can strategise their approaches, making them more efficient and beneficial to both parties involved.

“Generally, you can put people into the price-buyer or value-buyer category. You can think of your clients that way. If you are a price-buyer, you will always struggle with value-based pricing because you don’t think in terms of value, you think in terms of cost.”

But, also importantly, Blair points out the importance of having fun during the selling process. “If you’re not having fun, you’re doing it wrong’, he says. He encourages sellers to treat each experience as a learning opportunity and each customer with grace and kindness. Shifting from a price-centric approach to a value-centric one in the sales process doesn’t simply augment the transaction’s monetary aspect; it brings about a wholesome change in the seller’s experience and customer’s perception.

“When you do it right, and even when you lose and you learn something and you enjoy it, if you’re not getting that enjoyment out of it, you’re not thinking about selling properly. And maybe you haven’t structured your business in a way that you’ve made it easier for yourself to sell.”