Choose Pricing & Convert Website Visitors
✍️ Ward Sandler
🗓 December 12, 2016
Don’t Offer Too Many Options
Choosing your pricing can be a stressful period for some folks. But it doesn't have to be! The focus should be on picking prices that are a good enough guess for now so you can move on to actually signing up real customers. Your pricing will change in the future so don't let yourself get stalled at this step.
The more products/services you have (i.e. variables) the harder it will be for you to determine what is and isn’t resonating with your initial customers. If you’re just launching you don't want to offer too many products or services (as mentioned in our last article). This is just phase one so try and keep the number at launch between one and two. Everything you do will evolve and change in the future so you'll likely provide more, but for now you need to determine if you have product market fit (i.e. an increasing number of customers happily paying you to solve their problems).
Most people's urge is to provide way too many services when launching because we’re desperate for customers and want to appeal to everyone so no sales are lost. But the problem is when you appeal to everyone you appeal to no one. You want to offer a very specific service to your very specific customer niche that solves their most important problem(s). This is the best way we’ve found to get traction and begin your business journey.
Choose The Correct Charge Interval
Before you decide what your business model will be and how much you’re going to charge you need to take a step back and consider your customer niche. Yes we all want a steady flow of recurring revenue. But the way you make that a reality has to be considered from the point of view of your customer.
First of all, ask yourself are you actually providing value each and every month for you customer? If not, you probably shouldn’t do a recurring charge.
Are you providing most of the value up front with diminishing returns after? If so, you may want to consider a one time charge or a limited number of charges.
Will it take customers a while to actually get value and be successful with your product? If so, you should probably offer a free trial. Nobody wants to pay for something if they aren’t getting any value from it yet.
After you’ve settled on your charge interval, let’s move on to your pricing amount.
Choose A Sustainable Price
In our experience and from everything we’ve read about the topic over the last 6+ years, most people are undercharging for their product. Most of us are scared if we charge too much people won’t buy what we’re selling. But most of the time people don’t buy what we’re selling because it’s not solving a deep enough problem - not because of price. People are absolutely irrational when it comes to price. If you have a solution to a major problem for someone it usually won’t matter if it costs $500, $600, or $750.
As a rough guideline we recommend you charge at least $30/month on average. If your charge interval is not monthly recurring then we recommend you charge at least $360 one time (i.e. $30 x 12) or split it into multiple payments (i.e. three installments of $120 each).
The guideline is based on the idea that if you want to have an actual business it needs to be sustainable and be able to scale to a certain point before you have to hire other people. If you can’t make a living from your business doing most of the work yourself then you’re likely charging too little.
We also recommend you focus on bootstrapping your business. In other words, you run the business based on the revenue the business generates. As opposed to seeking outside funding (friends, family, venture capital, etc). When you run a business using outside funding, you are playing with other people’s money which is always easier to spend than your own. Outside funding can also mask inherent problems in your business since any issue that comes up can usually be solved (in the short term) by throwing money at it. By using only your own money you create a constraint for yourself which forces you to find and retain customers. If you can’t find and retain customers then you don’t have a real business and no amount of outside funding is going to help you.
Strive For A Realistic Goal
You only need 200 customers paying you $30/month for a year to generate revenues of $72,000. And obviously the more you charge, the less customers you need to achieve the same revenue. After expenses and taxes you should be able to modestly live off of $72,000 in revenue a year.
The goal of getting 200 customers sounds attainable to most people. It’s not a huge number like 1,000. If you can get to 10 customers you can get to 100. If you can get to 100 you can get to 200. It feels like a realistic number.
If you’re trying to be an entrepreneur to get rich quick you’re in the wrong game. It takes years (approaching a decade for many) to get their business to a point of profitability where the owners are generating a six figure salary.
Don’t set unrealistic expectations for yourself and then get disappointed after a year that you’re not the next Facebook. Most successful entrepreneurs you’ve never even heard of. They fly under the radar and generate healthy six figure salaries for themselves after years and years of evolving their business. They are not the unicorn businesses you read about in magazines and newspapers.
Don’t strive to be a unicorn, strive to be someone who can eventually work 40 hours or less a week (ideally remotely) and generate $100,000 of take home pay (after taxes and expenses). If you can do that you’ve won the game (i.e. work/life balance) and it’s a goal that isn’t as overwhelming as trying to make the Inc. 500 list of fastest growing companies or generate $1,000,000 in sales.
Design A Simple Website
After you’ve picked your customer niche, chosen your business model, set appropriate pricing, and decided on a realistic goal, it’s time to create your website. No sooner and no later.
Most people instinctively like to begin with the fun parts of starting a business - designing their logo, creating their website, buying a new laptop, printing business cards, etc. Unfortunately these are all distractions from the actual work of running a business. Remember, until you have a paying customer you don’t have a business - it’s just a hobby. You’re just playing around.
When it comes to creating a website you have almost an unlimited number of options to choose from. You can build something yourself for almost nothing (i.e. Wix or Godaddy), you can hire an expensive professional developer to build a custom site from scratch, or you can use a DIY template-based website for a reasonable cost that you can maintain in the future (i.e. Squarespace).
Full disclosure, we build and support Squarespace websites so we’re biased but we choose to focus on Squarespace as our sole platform because we honestly feel it’s the best option for most small businesses and startups.
If you decide to use Squarespace, don’t get too hung up on choosing a template. You want to keep the same philosophy in mind we’ve been preaching throughout our articles - keep it simple!
When designing your website, you may only need your home page when you first launch. There is no rule that you must have five or more pages on your website otherwise people won’t take you seriously. People don’t care about your website, they care about you solving their problems. Don’t fill up your website with text and images to make it look pretty or “professional”. The less filler the better. The more effective you are at explaining how you will solve your audience’s problems the better you will convert visitors to contact you (or purchase your product/service).
Explain How You Solve People’s Problems
On your home page start with a big bold headline which will capture your audience’s interest.
When writing the headlines and body text of your website, try to use language and wording that you’ve seen/heard your audience use when you did your initial research. When people read words on a page they have been thinking in their head you resonate with them and they are MUCH more likely to keep reading what you have to say. If you use generic business speak (e.g. top professional services, high quality provider) people’s eyes glaze over.
For example, if your business involves teaching your audience the fundamentals of how to paint with watercolor you might think off the top of your head your home page headline should say “Learn the top professional techniques for painting with watercolor”. But the problem is no one actually talks like that. No one in real life says “I want to learn the top professional techniques for painting with watercolor”. However, they might say something like “I wish someone could sit down with me and show me step by step how to paint better with watercolor”. So your headline might read as: “Learn step by step how to paint better with watercolor”. The difference between speaking like your audience and speaking like a business robot should be clear.
After your headline, explain in simple concise steps how you will solve the pain your audience currently has. We’re talking three sentences max here. If you want to add in some nice simple graphics to break up each sentence and make words more visually interesting that works too. The point of this is for your audience to quickly understand what you do and how it will help them - not to explain all the details of how you will do it. You want people to keep reading and exploring your page/website but people have serious A.D.D. on the internet so you only have a few seconds to convince them it’s worth their time to read more about you.
After your quick summary, you can start diving into more details about how you will solve their problems. Try to avoid using words like “I”, “me”, “us”, “our”. Instead use words like “you” or “your”. Again, people care about solving their problems so use language that speaks about them not you.
When it comes to design and layout, as per usual, keep it simple. One column is usually best to start. Make sure your font is legible (i.e. large enough that your parents can easily read it) and has good contrast (i.e. don’t use a light grey color on a white background). Don’t write huge paragraphs of text, break them up into shorter punchy groups of sentences. No one wants to be hit with a wall of text when visiting a page of your website. And the only people qualified to write large amounts of text on the web are professional copywriters (which most of us aren’t). So keep your text to a minimum and only write what matters to your audience.
Focus On Conversions
All good websites have a main goal which usually revolves around converting the visitor to one specific action. Now as your business evolves and grows so will your website and you’ll likely have multiple goals for your visitors. However, you always want to maintain one overriding primary goal. You want to make it clear to visitors that they should be moving towards a singular action at some point - and usually that is to contact you (or buy your product/service). So to that end, you should have multiple call-to-actions (CTAs) on every page of your website so your visitors can easily accomplish the primary goal you want for them.
Say your goal is to get someone to fill our your contact form. You should have a CTA link in your navigation with words like “Contact Today” or “Contact Now” which link directly to your contact form. You should also repeat your CTA at the bottom (and possibly the top) of EVERY page on your website. You should also throw it in after your summary of services on your home page. You never want to make your visitor have to figure out how to contact you, it should be ridiculously obvious how to.
Now when it comes to your contact form, the less fields the better. There have been numerous user experience studies done which confirm the less fields a contact form has the more likely it gets filled out. This intuitively makes sense, no one wants to do extra work. Especially if they don’t even know you’ll be the right fit for them. The point of a contact form is to begin a conversation with a potential customer. After you’ve both determined you’re good fits, then you can always have them submit extra information. There’s no reason to frontload your prospect with a bunch of work before you’ve given them any value. Long contact forms push people away from getting in touch with you.
Your initial website, just like your initial pricing, services, etc. is all part of phase one of a long multi-phase adventure. Don’t spend more than a week getting the website set up. You want the site to be good enough (not perfect) since it’s going to change anyway. Many people get hung up for months designing their website before talking to a single customer. That’s not running a business! That’s procrastinating and distracting yourself. The sooner you can move onto the next vitally important step (sales and promotion) the sooner you will start getting real feedback from real people and hopefully gain your first customers.