Value pricing puts you in charge…Equalizing the playing field between you and your customer…But how do you price your services so you and your clients get the best value?Julie Cohen is the Founder and CEO of Across the Pond, a global creative agency helping tech brands create a better world.Julie believes that culture is the key to a successful business—and that value pricing establishes a culture that empowers employees.In this episode, she’ll break down value pricing and reveal how she created an award-winning workplace culture.
Mentioned in this episode:
- https://www.atp.tv
- https://www.linkedin.com/in/julieannecohen/?originalSubdomain=uk
- https://www.linkedin.com/company/across-the-pond
Transcript
Voiceover: This is Performance Delivered, Insider Secrets for Digital Marketing Success with Steffen Horst and Dave Antil.Steffen Horst: Welcome to the Performance Delivered Insider Secrets for Digital Marketing Success podcast, where we talk with marketing and agency executives and learn how they build successful businesses and their personal brand. I'm your host Steffen Horst. The topic for today's episode is value pricing. Here to speak with me is Julie Cohen, who is the Founder and CEO of Across the Pond, a global independent creative agency. Driven by the profound belief in the benefits that technology can bring to humankind, Across the Pond is on a mission to help tech brands create a better world. Julie has over 25 years of experience, helping some of the world's top tech media and entertainment brands create compelling film and marketing campaigns. Clients have ranged from Google and YouTube to NBC Universal, and Disney to Expedia and the UK Government. Julie, welcome to the show.Julie Cohen: Thanks, Steffen. It's great to be here.Steffen: Now, Julie, before we, before we dive into today's topic, love to find out a little bit more about yourself. Tell our listeners about how you got started in your career with marketing and how how did you end up being, you know, an owner of a creative agency?Julie: So I started I guess in a relatively unconventional way. Growing up in the US, I had this desire to live in Europe, a great desire and I saw I had a degree in journalism and French and scooted off to Paris as soon as I graduated college. And there I had to figure out how to learn French. First of all, I figured out the best way to learn a language is from behind the bar. Good old liquid courage helps but from there, I found my way back into journalism working in television. So I saw that there was this very clear need for American TV outlets to have access to speedy help with cultural barriers. And it was a very long time ago, we have to remember. So in the 90s, the world was different back then. So eventually set up my own business servicing American entertainment news programs and movie studios with content all throughout Europe. That was probably way before we ever started calling it content. It expanded then through to corporate work. And when I eventually moved to London, I was introduced to Google who was sort of said to need some help creating video. And it's kind of funny to think back on that now. Because like how different the world was back then. They had only just bought YouTube and the world of video content was exploding everywhere. So I was in that and there was so much to do. I ended up growing a team on my own. In house, they're making films for Googlers all over the world, and even helping other agencies make their work more Googly. And then I guess the rest is our journey from being Google's in house go to video agency to becoming the independent global creative agency we are now. We, I guess we've really leaned into the experience we've had working so closely with one of the biggest tech brands in the world to harness all that learning and knowledge and use it to further our mission today, like what you just said, which is to help tech brands create a better world. And that's sort of tied in with the other important part of our journey, which is well it's very tied in which is with our own culture and our own efforts or with diversity, equity inclusion, and all of all of which is one of my main focuses at present. And so yeah, that that's, here we are today. We're a team of nearly 40 people across our four offices. Our headquarters are here in London, where I am in, and one in San Francisco, Singapore and Shanghai as well.Steffen: That's really great. Now, you just you just started talking about culture. And I read in your bio that you recently won to campaign Best Places to Work award. Can you tell us more about that, and in how important is culture for you?Julie: Yes, this is really top priority. And I guess we know we're experiencing this great resignation and great reshuffle all over the world after in this time post COVID. With people making these purpose driven jumps, and culture really is the only competitive advantage there is as I see it. And so while all awards are affirming and great, winning this, this campaign, Best Places to Work award felt especially great for me. A really proud moment to have sort of come through the pandemic and all the hardships that that brought and be stronger than ever with a culture that stands out for people is really very rewarding.Steffen: Now, I mean, you talked about a great resignation. But what I also see in the market is you know, talents are moving between companies, now a lot. And we're not talking about just a slight bump in salary there, you know, there are sometimes massive bumps in salaries. Have you been in that situation too? And then how, how is the culture that you created potentially prevented people, not prevented or avoided losing people because they valued the culture that you set up so much?Julie: Yeah, good question. Because what we really do understand about with this, all this movement in the world, all this shifting and resigning is that people really are looking for this sense of purpose and autonomy, a place to be valued and recognized and, and a place where they can they see their own growth. So all of this sort of creating this deep sense of belonging for people. And we're working on sort of understanding together, what does it mean? What does psychological safety mean? And how does that mean that we have we behave with each other and our commitments to maintaining this inclusive and diverse environment where people bring their whole selves to work. But also where they can thrive and develop, and each person to be growing and progressing towards their own sense of mastery individually is, I mean, it's what I work so hard for people to have and for Across the Pond to be known for. But I think, think that it's really the only way that people feel grounded and settled and willing to kind of, you know, go with the flow and feel really invested in the business itself.Steffen: Now, how does culture show up in your work? What effect does a great culture have on the work you do?Julie: Lots of ways really starting with having co wrote a manifesto together. So with the whole team, we wrote this manifesto, where we express our commitments to help make the changes that we want to see in the world. So right there, people can feel like sure that we're together in our, in our purpose and in our in our beliefs. And then that's informed our action plans, which are, for us this, this is something that's ongoing and always evolving, there's always big action plans that get communicated every quarter, and everyone in the business is involved in one way or another. So it's baked into the way that we work. And so from like, how we vet freelancers, and suppliers, and even our clients, to how we ensure that we're improving representation on screen with our casting choices, for example. So and I'm always investing in training and mental health is big on the agenda. This is not we know this, this is those mental health crisis in the industry and in the world. And so we're investing in that and helping keep these conversations alive and make these issues feel more accessible, doing a lot of work to connect people on that level. Keeping, giving people feeling looked after and cared for, basically shows up in everything. And for I mean, and for a start, they're still here. So that's a help. And another big thing that stands out for people is that we don't pitch. So because of all all of this, we've raised the bar for ourselves with regard to like, how we want to show up, how we think, how we work, how we communicate with each other, and how we help each other progress, and grow. And so with that, the idea of suddenly putting ourselves in a pitch scenario with the unequal footing that that brings with clients where mutual respect is not a given. And where you generally lose the autonomy that we've worked so hard to create for ourselves. Pitching just doesn't match.Steffen: Interesting. Now, I mean, as a, as an agent, or any company, you need to, you need to win new clients, because at some point, you know, clients will leave you, or you want to grow, right? What is your approach then in winning new clients? How are you able to grow?Julie: Yeah, lots of people ask this, it feels really hard. If you are an agency who's set up and used to pitching, it's really not easy to flip a switch and just start pitching if you're set up that way. So it has taken some time. But I guess of the things that we've learned along the way, there are a few keys to it. So one is having a really clear and focused proposition. That, I talked about that as the antidote to the chronic need for pitching. So for us specializing in tech, really helping tech brands with the very specific problems that they face and making sure that we're two steps ahead here. That in that area is key and we talk about yeah, how we make the complex human, so defining the methodology around this and an approach which is both different to competitors, and compelling in itself. And most importantly, that works is also key. But all this, obviously, it only helps once you're in conversation with potential new clients. So this is where we put what could have been pitch energy into other things like thought leadership, relationship building, and of a well used phrase that Across the Pond is good work gets work. So this is a really big one for us. And happy clients come back for more obviously, and they also leave and pop up and other tech brands. So that's, that's a really big driver of traffic through to us. And then value pricing, we practice value based pricing, which is, well, it's deeply satisfying to the team and for clients. And when you get it right, I must say we haven't got it completely right yet, either. It's a long journey. And but when you promise to deliver value, and then you do, the relationships grow outside of the need to ask for a pitch each time.So it, it allows us to only have also one big A-team to give all of our energy and time to our paying clients. So there's no B-team, there's no swapping and changing people when we're working on on a project. So and the last thing I'll say is that not pitching doesn't mean that we don't enter into conversations with clients. That's actually also often the very thing that does eventually lead to new relationships, it can take longer. And it does, but we don't have to support a pitch team. So we've got time.Steffen: I love the topic for today of value pricing. Because you know, we here at Symphonic Digital, we quite often have conversations about that, how we can implement that and how we can make it work. I'm always wondering if it is easier for creative company to use it. But before we talk about that, what is value pricing in your own words,Julie: To get our heads around this for ourselves, even, we had to really dive into the language like what is value, right? And so if you look up value, you know what it actually means and what someone is buying from us rather than someone else. And then to understand how we could ever get close to actually getting paid for our value, we have to think first about what we usually base prices on and then. So then we ended up talking about cost and price. Right? So you said you're interested in this, and you've talked about it, too. So what if I asked you, Steffen, what, what would you what is the definition of cost?Steffen: On a project? Julie: Yeah.Steffen: Yeah, I mean, it's kind of the human the human time or human investment I have to put in in order to deliver the project. There obviously, are some some fixed costs that are there that I need to take in consideration. But those are usually put into the hourly rates for the individuals. So that's probably how I would approach costs. And then from a pricing perspective, is what margin I want to put on top of it. Right. But that obviously doesn't doesn't include the value that the team might create at the end of the day. Because it might be just saying, hey, you know what, I want to have a 30% margin or 25% margin and and, you know, if somebody cost me $10,000, then, you know, I put a margin on top of it. That's the price for the product or for the project.Julie: Right. Right, you're right. But it does talk about the value. We often, we have to remind ourselves that at the margin, obviously, you need to make a margin. That's a given. But we're not upselling, we're adding value. So but, so but back to cost. Yeah, if you look it up, you'll see cost is an amount that has to be paid or given up in order to get something right. And it's usually the monetary valuation of effort and materials and resources and time, all of that and then price. But price is different. Price is determined by what the buyer is willing to pay, what the seller is willing to accept, and what the competition is allowing to be charged. So that's where, you know, you see that happening all the time when you're when you're buying airline tickets, for example. So there's a really good story that really kind of landed this for me, it's about the Nike logo. So back in I don't know if you've heard this story in 1971 when Phil Knight founded Nike. He hired a design student, Carolyn Davidson, to, and he paid her $35 to create that logo. So maybe $200 today. And then, I think 15 or so years ago PepsiCo hired the agency Arnell to redo their logo paid paid a million dollars. So you could say that what is price? What's what's, what's the price of a logo? If you look at that, you'd say, well, it's between $200 and a million. Right, so, yeah.Steffen: But that's, I think that's where the where the challenge comes with value pricing, probably for a lot of companies, you know, how do you decide to put a $1 million price tag on a logo for PepsiCo? Right. Versus, you know, when I was at one of the bigger agencies in London Mindshare, they had changed their logo back then. And I think they paid like a quarter of a million dollars for the logo that they created back then. Then why did they charge them $250,000? You know? So that really is, I think, one of the core questions when it comes to value pricing. How do you actually put a price on the value that you create?Julie: Right? So I guess, it's in thinking about what the value you're delivering actually means. So there's a good phrase, price the client, not the job. So you're focusing on the benefits, not the features. And this other analogy, we talk about all the time that nobody's, nobody buys a drill, they're buying a three quarter inch hole, that they need the drill to get the hole. So breaking that down and asking ourselves what I really thinking about the benefits of the outcome brings us closer to the value that we're creating. To me, because we have three choices of what we can charge for when we create a budget or a pricing proposal for a client, right. We can do inputs, which is probably what most agencies did. It's definitely what we were doing before which is materials and time. Carolyn Davis, charged Phil Knight that 17 and a half hours of her time to come up with the Nike swoosh. And then we could also charge for outputs. So we could say, a three minute film or a banner ad, or even a global campaign with a list of elements that will deliver. Or we can charge for outcomes, which is the results. And then we're really talking about the marketplace effects. And what buyers are buying, and how effective all the inputs and deliverables have been. So that hopefully that sounds really different. Right?Steffen: Well, I mean, what you're basically talking about is, what is the increase in revenue or whatever, you know, the KPI is at the end of the day that you're influencing. And if you're if you're building a new website, complete new design and everything else. And it's an e commerce store, you would hope that by doing so, you increase the amount of revenue and then profit after the site is launched. But you don't know that when you built that you, you have an assumption or the client gave you you know, we're looking for a 30% increase in sales, for example, you know. And that might be therefore quantifiable. When you work with a client, we take a example, how, how are you defining the price? Can you can you talk us through an example?Julie: Yes, sure. So I guess an example, let's say a client comes and says, and this has happened with us. Hi, I'd like a demo, I need to create a film to demo my analytics tool. Okay, so we've been asked for film. And we ask, okay, so why, why do we, what's behind this? Well, it's important that people understand how to use the tool. Okay, why, why is that important? Well, it's a part of, it's an important tool in our ecosystem. Oh, so there's a bigger picture here. This is part of a whole ecosystem. Yeah. And that's, that's an important part of it. So once people, you start using this tool, we want them to be, you know, in the ecosystem, and that's, like, really good for our business. Okay. So that's an important product to you and your ecosystem. What will happen if this, what's going to be the biggest success of all here? So you're asking the client to think about, they've come with a sort of a micro ask. I want. They've, they've already decided they're prescribing their own medicine saying, I need a little film to show people how to use it. Then we're like, but how are people going to know about it? Well, they're already so we're now talking only to the people who are on the website who will come across this film. So how about as a second option, of course, you price up what they've asked. And you're going well, maybe we're gonna create an awareness film, like a really cool film that will help that can be seated elsewhere so that people understand that they want to know how to use the tool. So then there, there's two things that you're gonna make. And one is going to make the growing right, the the, that's getting more attention for for the first ask. And then you talking about asking them, okay, so what if this whole ecosystem? What if whatever we're talking about right now is like more successful than you're imagining now as successful as it could possibly be? What is the ultimate goal of this? Your, your ecosystem for your brand? Oh, well, and then then you get this moment where they sort of let go of the brief and go, oh, gosh, well, and it's a little bit fantasy, and it's really helpful. So that you're getting them excited, in a way to think about what what does this mean to me personally? And what does it mean to my business? Oh, well, I mean, if, if the whole world knew about this ecosystem, we'd be worth x billion, and we'd be we'd be able to sell and I, I'd be able to retire and I get my yacht. And that would be the end. Right? So you really, and you go okay, then you say to them, if I could guarantee you, that success, that we could do right now would would bring the entire world to your product and in your ecosystem and all that attention? I'm not saying I can, but if I could, how much would that be worth to you? And you get a little bit of a game. And they're going well, I mean, if you if you can promise me that it would be? Let's see, the business will sell for 50 billion. So yes, it was worth a couple of couple billion. Or, you know, are you saying, if that's what it's worth to you, 50 billion, you've just said, then, you know, would you pay me a billion if I could guarantee it? And we're joking around here going yeah, but I can't guarantee it. But okay, well, I'm going to go away. And I'm going to think about, for this third option, I'm going to think about how I could get as close to humanly possible as guaranteeing that. Are you up for that? And then so you're you're signing up to deliver something that's completely different than the ask for the little demo film. But it's delivering a whole lot more value?Steffen: What success have you had with this? And how can you measure this? That's probably another question people would have.Julie: Yeah, for sure. So I can say that the first year that we did the three choices of yeses, or three pricing options, we counted a million pounds of extra revenue, which are attributable only to the increase offering the extra value added. So it wouldn't have included the amount that the client was willing to pay when they came. So and this, I mean, it, it's it's just so compelling and so consistent, that that how well it works. That would be my like, you know, if anybody takes one thing away from this, tried to do three options. It's also how our human brains are wired, we want to, there's a whole lot of, of interesting research and examples around how we don't we're where we don't want to take the lowest and we don't want to take the highest and we're much more comfortable in the middle. And then that's how you can craft your three choices, which by the way, we are expecting them to pick the middle choice not the higher.Steffen: Of course. Yeah, that's kind of as you said, that's the added kind of thing. You you want to push them towards the middle. But if they take the highest one you're like, that's, that's great. Now, how do you start implementing value pricing? I mean, if you want to switch from one day to another day to do that, what does it take?Julie: Okay, yes, well, okay, first I should say that one of the things that make it makes it so successful is it because is it puts you in the expert seat, right? So you're no longer order takers handing in handing a piece of marketing asset for a price. So we we're now offering up solutions to their greater needs, and most importantly, having different and deeper conversations. And that has such a huge impact on the big deep relationships that we can garner from doing it this way. And that that's been game changing for us. So you know that today we've tripled our client base, doubled our revenue and increased our profits considerably, and all without pitching. So it really does work and repeat customers. Obviously no longer ask us to pitch. So just to set it up, because how we started, I guess there are a few things you can do straight away to start valuing your value. Well, for me, it started about five years ago, and having been introduced to these ideas around value pricing and not pitching, it really spoke to me. I first, involving the team is critical. And because it's habit too and change is hard, as we all know, in a business and anywhere. So first, talking to them about their value. And it was enlightening. It was great. They made them feel great, you know, the end the company's value, because we are not our day rates. And we are experts and really like stopping to think what is expert about us? What is our what is our experience? How does that add up? Why should a client be better off with us than anyone else? And it's fun to see people really connect with this idea of feeling empowered and liberated in a way. And it it equalizes the playing field here. So reminding ourselves that we are just as valuable as the business hiring us, helps also reconnect with the value. So the other thing that you can do right away is the is concentrate on the language, right. Those like there are words that you can just stop using, because they that really makes a difference. So if we talk about cost, you're talking about estimates and rates and hours and billable time utilization. And that's a very, those are very different words than value language, which is more about price and talent, and results, and solutions and outcomes. So if we, you know, when you get tripped up, just stopping to really think about what is the outcome, what is the ultimate benefit really just changes the nature of of what you're doing. And I guess, and then the last thing would be start giving three options. Now I can give big nods to some the other life changing gurus we follow. So amongst others, Blair Enns, who wrote the Win Without Pitching Manifesto, and also Pricing Creativity. And Tim Williams, who's a consultant who, amazing guru, who talks all about value pricing as well. So that's been a big help.Steffen: But before I let you go, last question I have is this, right. When you, when you started value pricing, did you encounter feedback from clients that was well, but what if you don't achieve the result? Right? Because, as you price your solution, based on value, someone might say, well, yeah, but what if you don't achieve what we agree on? You know, I mean, that's, that's always kind of a, the question that we, for example, get when we when we talk to clients, right? What if you don't achieve a certain result? What happens then? Did you ever have that? And if so, how did you respond to that? Because I would assume once you have case studies that, that show your value pricing approach, the results that you were delivering, it's a much easier conversation. But in the beginning, I would think it's probably a little bit more challenging.Julie: It starts with the conversation, because if we're really having the right conversations with clients ahead of talking about any price, we are, we're really sort of unpeeling the layers and going, why do you want this as a, why did you come and ask for this? Why is this the brief? Why is and then why why is that? Why is that? Why is that? And the more you unpeel, the closer you get to this really, refers to this the desired future state. So once you're in the language, the sort of big picture, ultimate success of for the client in their own language, then each pricing option is built to deliver that. It's not as esoteric or intangible as it sounds. Once you once you're talking through your pricing options, because they're all really tied to what they need to achieve.Steffen: Well, Julie, thank you so much for joining the Performance Delivered podcast and sharing your thoughts on value pricing, I really enjoyed the conversation. If people want to find out more about you and Across the Pond, how can they get in touch?Julie: Our website is acrossthepond.agency and or my LinkedIn or Across the Pond's, LinkedIn, Julie Cohen, or Across the Pond.Steffen: Perfect. Well, thanks everyone for listening. If you liked the Performance Delivered podcast, please subscribe to us and leave us a review on iTunes or your favorite podcast application. If you want to find out more about Symphonic Digital, you can visit us at symphonicdigital.com or follow us on Twitter at Symphonic HQ. Thanks again and see you next time.Voiceover: Performance Delivered is sponsored by Symphonic Digital. Discover audience focused and data driven digital marketing solutions for small and medium businesses at symphonicdigital.com
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