How Value-Based Pricing Transforms Service Businesses - Joel E Miller

Episode 18 - How Value-Based Pricing Transforms Service Businesses - Joel E Miller. https://www.theskyfloor.com/

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Transcript

SPEAKER_02 0:18

And welcome back to the Link Through Social Podcast. We have a really good guest for us today, Joel Miller from the Skyfloor.com. Joel has been running a boutique marketing agency with his identical twin brother Alan for 17 years. And they've never hired a single employee. That's not a gap in their resume. It's the whole point. While the marketing world keeps telling small businesses to scale up, hire more, and hustle harder, Joel and Alan quietly built the SkyFloor into a valuable agency by doing basically the opposite: staying small on purpose, turning away clients who aren't the right fit, and charging based on value instead of hours. Joel also happens to have been born on Leap Day and has an identical twin. He's worked alongside for nearly two decades and has a theory that most struggling businesses don't actually know their own business model. They just think they do. Joel, welcome to the show.

SPEAKER_01 1:25

Thank you so much for having me. It's great to be here.

SPEAKER_02 1:27

Yeah. So that's uh that's amazing that uh you're working uh alongside your your your twin brother and you've been doing it for a very long time. Uh why don't you just give us a a brief uh background about your business and and how you got started?

SPEAKER_01 1:44

Yeah, so we are a digital marketing agency, but really what we are is problem solvers. So we love to ask really good questions when you come in and think you know what you want. Yeah. Uh we find that a lot of people actually don't really know what they want or need next in their business. So we end up doing a little business coaching and business therapy even sometimes to drive them towards uh a strategic outcome so that they're not just coming and saying, can you run ads for us? Can you make us a website? Can you you know fill in the blank? What deliverable can you give us? Yeah, we can do all that, but so can people on Upwork and freelancer.com. That's not why what gets us up in the morning. We want to we wanna we wanna get in the weeds with you and partner with you and really feel like we're aiming towards the same uh hard-to-reach goal together.

SPEAKER_02 2:33

Sure, sure. That's amazing. Uh now, uh, in your in your introduction there, I mentioned that um you don't charge by the hour. So how do how do you price services based on value rather than hours?

SPEAKER_01 2:49

Well, it all starts with that first conversation, and it's all about asking really great questions. So the why conversation is huge for us. Why are you talking to us? Why did you pick us? But also why now? Why, why do you want this work that you think you need at this moment in your business? And if someone can't identify that for one thing, they need to know, or or they're just gonna get, we'll all do subpart work together. But if we can actually aim towards that next outcome they want, that next goal. So let's just pick something kind of common. Uh, they want to double their revenue in two years. Okay, great. Well, let's say you're at $200,000 and you want to be at $400,000, right? If I can come up with a plan for them that's going to make them $200,000, I think, or more, in that two years, then it's a no-brainer for them to spend $50,000 on the project with us. So it's really about deciding who we're serving and what we're trying to take them to at that next level, and then actually like putting a value on that so that we're defining that they're profiting. And then it might be a price that if you were to look at the hourly, you would go, no, wow, I would never pay a thousand dollars an hour. I mean, yeah, that's just a random example, but of course, yeah. But but when you can actually demonstrate that it's going to make the money, then then we're all winning. Wonderful.

SPEAKER_02 4:16

Yeah, that's that's a great analogy. Now, the emergence of AI, we speak about it every week here on the show. How can businesses maintain the human touch in the era of AI?

SPEAKER_01 4:28

I've been thinking about this so much more lately. I mean, it's how how can we not be on all of our minds? And I think, well, I want kind of want to back up a little bit and say that so I think some people think AI is leveling the playing field and it can do that, but what it's actually doing in a lot of cases is tipping it, making it actually more. And so the way I like I've been thinking about this is that we have these self-driving cars, right? That's gonna become more and more common. And it can probably they're gonna be safer than human drivers. Uh, it can avoid traffic for you, it can do all these things, but it doesn't matter if you have the Arizona desert pushed into the GPS unit when you really need to be at your kids' softball game. So, like so at the end of the day, right? You that's the the human filter in that story is you decide where you're going. And I think a lot of people haven't figured out where they're going yet. And so the AI tools are just pushing them faster towards a subpower outcome. So you really have to roll it back and and and maybe do it's democratized execution, that's great, but the hard work has always been the hard work, and a lot of people still haven't done it. What are what makes you different? What are you actually trying to present to the world? From your unique perspective, an AI cannot do that for you. You have to be that that filter, that last human stop in the chain.

SPEAKER_02 5:58

You're you're absolutely right. Yeah, I I think uh the misconception, you're right, is that a lot of people they think, oh, well, AI can just do it all for me. And uh I'll I just put my head, my hands behind my head and and let it all work for itself. But it it doesn't work that way.

SPEAKER_01 6:17

No, it's it's really about differentiation, right? Like all the things that AI does well and will continue to do well, and it's probably going to shift in in and morph, it'll get more advanced, but the things that it does the most of will be the most common outputs. So by that very nature, the things that it's really good at aren't different enough to stand out. And so you have to figure out differentiation, and that's always kind of been there. It's just now when we can get uh kind of a pretty good written output or photo or whatever, all the things we can do, when you can get it fast, it just highlights that you still didn't know why you were different.

SPEAKER_02 6:55

Exactly. Exactly. Now, now you have a controversial take on fail early, fail often. Yes, it's terrible advice. Why do you think this popular startup mantra is harmful and what should replace it?

SPEAKER_01 7:12

I just think it's a little too myopic. It's a little too, I we of course understand intrinsically what people are saying, but if your child comes to you because they're having trouble with math, they can't give four plus uh four, they say is five, and stuff, you know, we you don't say, all right, just keep failing through it. No, you're gonna you're gonna show them on your, you know, give them some first principles to get to a better result. And and so there's this like tacit understanding in the fail early fail often mantra or mindset that that failure itself is actually the goal on the way to success. I actually think that it's like if you haven't failed enough, you're not gonna be successful. Well, that's uh that's weird. Like we should actually have want successful mindsets, not not like watch it all burn down and go, well, good for me. Yeah. So of course, like we know what they're really trying to say, and it's a great principle. Please learn from your mistakes. When something fails, figure out what went wrong, make new assumptions and and tests and iterate on it and see what works. Uh but maybe we should just like view it more as a call to resilience and progression and less of a badge of honor on the failure alone.

SPEAKER_02 8:34

Yeah, no, absolutely. Now, um, you and your brother have uh run a very successful agency with a very high dollar account, uh, with just two people for 17, 18 years. What's the secret to profitable growth without scaling headcount?

SPEAKER_01 8:53

Like, yeah, with headcount, right? Yeah. Well, for us, it's been a combination of really focusing on that value, value proposition. So, what what are we offering our clients? Since we've we've become good at defining that, we're we're not only able to charge more than uh well than we were before. I always just think the race is against yourself, so I'm gonna race against myself. Um but we also uh can we employ tools and other things. AI is one of them, right? We to make our process more efficient, but again, we it's for us, it's a strategic thing. We want to show up and actually interface with our clients. I don't want there to be this game of telephone that occurs sometimes, and you have like the owner, project manager, developer, designer. Can't stand it. Yeah, yeah. You we've all, you know, you sit around and you watch, you have some kids and you watch them play telephone, and it always ends up potty talk at the end. Well, the same thing kind of happens to a lot of clients. They're uh they get this output and and no one's really truly responsible. And you only talk to the owner when things are going really bad. So for us, it's like, let's partner with our clients, let's make it interesting, because then I get to be a lifelong learner and learn new businesses and learn new ways, uh, tactics and strategies, but to reach those outcomes. And and so I think like it for us, it was the differentiator is staying small on purpose and then clearly defining that value to our clients and entering into real partnerships where we're on the same team.

SPEAKER_02 10:33

Right, right. Now there are there are cheap competitors out there in in every industry, and right and in ours as well. You know, how do you compete against cheaper competitors without racing to the bottom on price? What's your secret?

SPEAKER_01 10:51

I think the secret really is just well, one one thing I think if someone listening who's in our same boat could take this, uh, probably to the bank. But I uh I ask people, have they tried the cheap, cheaper options? So, like if someone was coming to us for a website, one of my kind of why questions is it's kind of related to why us, why are you why did you pick us? Why why haven't you tried Squarespace? Well, if it may maybe they haven't even thought about it. For some of them, the answer might be it might be worth a try. But but by like by acknowledging that there's lots of ways to do something, one, I'm opening up that honesty, that partnership channel really early on. But two, it gives me the chance to talk about why I think that probably wouldn't work for them, because I'm gonna give them custom work that's the differentiator, right? I'm gonna help them understand that. And the Squarespace site will look like every one of the other ones, and they'll they'll it'll just be noise. Uh so I think yeah, it's really just uh about how you partner and position yourself because I'm not offering a commodity, right? Like you go to Upwork, you're not gonna find someone with the strategic thinking, it's just not gonna usually happen. I mean, the people who are able to do that are doing what we're doing. So so almost by the it's a filter to to to boot. So, and if someone doesn't see that, they're not gonna be a good fit for us, and we won't be for them either.

SPEAKER_02 12:18

Right, right. Now, your website is theskyfloor.com. And I encourage all our viewers and listeners out there to uh take a uh take a peek. And um, why don't you go through uh a few of the services that uh you and your brother offer at theskyfloor.com uh before we wrap things up today.

SPEAKER_01 12:41

Sure. I mean, we kind of caught our teeth in graphic design and website design. So a lot of the things we we do revolve around those uh those items, but then like our top clients, we are doing full service marketing for them. So they have like usually uh an internal marketing team, but they bring us on to think of the big picture, and that pushes into every category you can think of. So, one example I love to give cross-sections with AI and the human element, they have a sales team. I went and listened to 30 hours of their sales calls, their incoming calls, and found patterns where I thought there were weaknesses based on my 17 years of selling high-ticket items, and and then took that and turned it into a grading system where we made a custom GPT to automatically take the transcript and grade it on the six metrics and then shoot out a Slack message and a and a Google Doc to me and the marketing manager so that we can improve upon their sales process. So the human part of that, right, was I had to listen to all that. I had to take the I didn't just plug it in and say, you tell me what the weak points are. I used all of my experience to then make something that quickly gives us an insight into what's happening. So, what where does that service fall? I'm not really sure because that grew organically out of the relationship and the a need they had that I saw. So again, really our our biggest offering is is partnership and and working towards your success together.

SPEAKER_02 14:17

Wonderful, wonderful. Well, listen, Joel, I really appreciate you taking some time to join us here on the Link Through Social Podcast. And once again, your website is theskyfloor.com. Please uh give it a check it out. And if you need to contact Joel about anything that you might need for your business, be sure to reach out. Joel, thanks for uh coming on the show.

SPEAKER_01 14:42

Thank you so much for having me.

SPEAKER_02 14:45

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SPEAKER_00 14:53

Tired of stressing over what to post on social media? Meet Smart Post App. You're all in one solution to create, schedule, and grow your content effortlessly. In just a few taps, you can generate engaging posts, stay consistent, and keep your audience coming back for more. No more guessing, no more burnout, just smarter content faster. Whether you're a business owner, creator, or an entrepreneur, smartpost helps you show up like a pro. Start posting smarter today at smartpostapp.com. SmartpostApp, because your content should work for you.