Rethinking Pricing For Inclusivity, Impact, and Collective Intelligence
Pricing a product or service package can feel like a nearly impossible task. It can feel even more impossible when your product or service can create vastly different returns on investment for equally delighted customers.
Here’s what I mean:
I can buy a pair of running shoes and, even though I might not run my miles as fast as another runner, we’ll run about the same number of miles in those shoes. She might have a better split time but our return on investment is about the same.
But, if you’re a personal trainer working with both amateur weightlifters and professional bodybuilders, you’d find that the return on investment your clients receive is pretty different. The amateur weightlifter feels great and can probably perform a little bit better in her job. But the professional bodybuilder gets paid for her physique, strength, and fitness. The return on investment is measurably different in most cases.
So how do you price that kind of differential when your expense as a provider or maker is about the same?
This problem is further compounded when we take into consideration the real limitations that many people face when it comes to investing in anything beyond basic needs — despite their skills, capability, capacity for impact, and drive.
So — even more importantly, how do you craft a pricing model that provides for access to people who truly prioritize your work but haven’t been able to afford or invest in it before while still maintaining financial sustainability?
I, personally, want to work to create offers that benefit those with little or no access to capital or credit but who have community-changing ideas.
Access Is Revolutionary
Limiting access to education, social networks (the good old-fashioned kind), capital, and other resources has been a tool of oppression for thousands of years. Isolation — women in the homes, slaves in the fields, native people in reservations — has allowed the powerful to remain powerful at the expense of our greater collective intelligence.
At CoCommercial, we believe that providing access through community is one of our best tools for empowering (literally) a new type of person to attain wealth, power, and influence in our communities. Further, the more we can do to help others build communities of access, the more we further our own mission.
Pricing for inclusivity means that the collective intelligence we create is even more valuable (more diversity of perspective and experience means more collective intelligence) and the impact we can have is more widespread.
The Perfect Test Case
I’ve been wanting to experiment with more inclusive pricing strategies since my company moved to an access-oriented value proposition in January 2017.
We’ve already done a lot to dramatically lower the barrier to quality, personalized small business support. But we wanted to do more.
When our Community Advocate, Shannon Paris, and I decided to we wanted share what we’ve developed together over the last 18 months to support business owners and organizers growing communities, leading group learning, and building support networks, it appeared to be the perfect opportunity to price the work in a way that made sense whether the rewards for participants were going to be financial or cultural.
We developed a learning and mastermind opportunity on community or group management — including things like developing a Member or Client Handbook and creating a Community Operations Manual.
Then we asked ourselves:
- How do you price this kind of learning and peer support group where each member might very well have a completely different return on investment depending on how they utilize the work in their businesses?
- How do you price for value while maintaining accessibility for members whose first (or even second or third) goal isn’t profit?
- How do you create the capacity to serve those who are trying to do good in the world while maintaining your own operating expenses?
Community-based business models can, of course, be incredibly lucrative. Think about for-profit trade associations — they bring in monstrous amounts of revenue and provide incredible value to their members by charging a fee that’s paid by thousands of members who end up supporting each other, pooling their resources, and adding value to the network.
On the other hand, community-based models can be used to support non-profit organizations, grassroots movements, and peer support networks. Some of these organizations might have the fundraising or membership revenue to invest in infrastructure and operations training — but most are truly scraping by, even if they’re doing amazing work and impacting hundreds or thousands of lives.
I wanted to build a pricing model for this scenario — one where we could openly and transparently share that we were creating the space for anyone strategically building communities, groups, or networks at a price that made sense for them.
Plenty of smart entrepreneurs have experimented with Pay What It’s Worth pricing and developed brilliant systems for making people feel comfortable and fully invested in that model. Others have created Pay What You Can pricing and divorced price from value completely. Still others, like Lisa Robbin Young and her Creative Freedom Incubator, have chosen Pay For Results model.
These great models didn’t seem quite right for what we were doing.
What I came up with is Pay What Makes Sense pricing. I wanted there to be a clear guideline — and I wanted that guideline to speak to values for inclusivity, impact, collective intelligence, and — key — the participants’ independence in choosing the price based on those values, too.
Here’s how we’ve framed it:
“Group models and community-driven businesses can be extremely profitable. They can also be used to support advocacy and activism among non-profits and benefit corporations.
The value of this work is expressed differently depending on the type of business or organization you have. Therefore, we’ve decided not to create a set price for this mastermind and ask that you invest what makes sense for your business or organization.
Our guideline for investment is approximately 20% of one month’s goal revenue from your community or group in 2019.
For example, if you are planning towards of goal of $5000 per month in revenue from your community or group offer (or about $60,000 per year), we’d suggest investing $1000 in this mastermind.
If you are planning towards a goal of $25,000 per month in revenue from your community or group offer (or about $300,000 per year), we suggest investing $5000.
Your investment is your choice based on the ROI you expect to gain from formalizing your community or group management practices, creating exceptional member experiences, and saving time and headaches by providing structure and direction for your people.
The minimum investment is $250.
We recognize this is an unusual way to price an offer. Our goal is to make sure every single participant has skin in the game, shows up for the work, contributes to discussions, and prioritizes completing assignments.”
We wanted it to be clear that participants’ investment should be tied to their goals — not merely an understanding of what the work is worth to them from their current perspective or what they can afford.
We also wanted to ensure that participants have considered their goals, have a plan or a track record of some success, and really mean business. Price is one way to do this — but again, just because someone can’t pay a high price doesn’t mean they’re not capable or experienced enough to offer a valuable perspective to other participants.
There are a set of bonuses that incentivize participants to invest at the level that truly represents their potential ROI or provide additional value to those who are ready to invest at a higher level to get greater support.
This experiment is in the early stages and we can’t know whether it will create the results we’re looking for — maximum impact and financial sustainability — but we’re incredibly excited about the prospect.
If you’ve seen, utilized, or bought into innovative pricing models, I’d love to hear about them. Please share them in the comments!