by Randall CraigFiled in: Thought LeadershipTagged as: pricing, Value
Have you ever been in a situation where you had to choose between two service providers, where one is 50% more expensive than the other? Here’s the question: what assumptions would you make about each of them, based on their price?
Have you ever been in a situation where you had to choose between two service providers, where one is 50% more expensive than the other? Here’s the question: what assumptions would you make about each of them, based on their price? Yes, there are many factors that go into pricing, but it is reasonable to assume that the higher the price, the more that the market has acknowledged the special value that they provide? They may be faster, have more experience, improve the outcome considerably, or reduce the risk. The price that the market has assigned to their services is the essence of the economic test.
Of course, the Economic Test isn’t the only indicator of Thought Leadership, but with several exceptions, it is usually a necessary condition. Some exceptions: college professors can often be thought leaders, even if they have chosen not to monetize it. Heads of certain regulators (and central banks) are often thought leaders, but cannot monetize their thought leadership while they hold their positions. And retirees sometimes are thought leaders, but who sometimes choose to deliver their services pro bono or at greatly reduced rates.
Likewise, popular social media “Influencers” do exceptionally well with the Economic Test, but that doesn’t necessarily make them thought leaders.
Depending on your role, the question of monetizing your thought leadership will be very dependent on the parameters of your employment. For many leaders (particularly in professional services and financial services), this is expected as part of the job, and it is reflected in salary and billing rates. For independent thought leaders, it is reflected in speaking fees, book royalty deals, and billing rates.
How much are you charging for access, compared to others with your level of experience? Either they’re more expensive, or you are — so the question is why. This week, try to figure this out. (Hint: either they have moved their rates up and the market accepted the new rates, or for whatever reason, you have neglected to change your rates.)
Thought Leadership Insight: There is another reason why someone else may be doing better on the Economic Test: your competitor may have invested in inbound marketing (blogs, podcast, whitepapers, books, etc.), and therefore there is more proof that they are indeed thought leaders. More on this in my post on the Activity Level Test.
Related Posts: Take the next Thought Leadership Test: The Fancy Title Test, Pricing Strategy, Monetizing IP: Implementing an eLearning Program
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