Today’s guest is Tom Morkes. Tom is an author, consultant, coach, and publisher. He's written several books, including The Complete Guide to Pay What You Want Pricing. He's worked with successful entrepreneurs, launched authors who have landed on the New York Times, Wall Street Journal, and USA Today Best Seller lists, and has done more than a dozen product launches that have generated more than $100,000 in sales in their first 30 days.
While Tom started his career in the military, he always knew he wanted to follow more artistic pursuits at some point in his life. So after five years of service, he transitioned to being an entrepreneur. Starting a business provided him with the ability to make something out of nothing.
While he's done many different things, he's currently transitioning away from implementation toward consulting.
In today's episode, Tom talks about "pay what you want" pricing, and shares the best way to start experimenting with your pricing, other places this model works, and how to align it properly with your goals and desired outcomes. We also chat the actual results he's seen from selling his own products with this pricing model.
You can learn more about Tom, his services, books, and courses, at his website TomMorkes.com.
[Tweet "'I think pay what you want is a fantastic way to grow your list, instead of just having a free lead magnet.' @tmorkes"]
In this episode Tom talked about:
- How his military career segued into where he is today.
- Who his clients are, and how he helps them get to where they want to be.
- How you can use a "pay what you want" pricing models to increase your sales and traffic, regardless of industry.
- It's ok if it takes some time to start selling your product. It might not take off instantly. You'll have to work to gain traction.
- People will pay for things, even if you offer them for free.
- Eliminate your product's barriers to entry, if possible. Even asking for $1 is a barrier to entry, and getting rid of it could increase results.
- Try testing out "pay what you want" pricing on a special day with a low-risk, low-margin product.
Important Mentions in this Episode
Tom Morkes 0:00
I remember how fascinating that was and how invigorating It was like it was an adrenaline rush people pay money even if they don’t have to, and my work is good enough and you can create money you can make money online.
Jason Resnick 0:21
Welcome to Episode Two of season six of living the feast. I’m Jason aka rez helping you grow your business by having a conversation with someone who’s been there had success and built a business designed around the life they want to live. That’s live in the feast. Today’s co host is Tom Marcus. Tom is an author, consultant, coach, publisher, and self reliant man. He’s written several books, including the Complete Guide to pay what you want pricing. He’s worked with successful entrepreneurs such as Dan Norris, Brian Harris, Neil Patel, and companies like teachable. He’s launched authors who have landed on the New York Times, Wall Street Journal and USA Today, best seller lists and has had more than a dozen product launches that have generated over $100,000 in sales in their first 30 days. Because people are inherently generous and want to reciprocate, they will pay money when they don’t have to. In this episode, we dive into how to take calculated risks with your pricing. When you allow someone else to pay what they want. It frees your mind up to get your project and your ideas into the world. Tom also shares the best way to get started with pay what you want pricing as well as other places this can work for you and how to align it properly. And he shares his actual results of this strategy for him. I know you’ll enjoy this conversation that I had with Tom. So let’s dive in.
Hey, Feasters. Welcome to another episode of live in the feast today. I’m super excited to be bringing to you, Tom Morkes. Welcome, Tom.
Tom Morkes 2:16
Hey, thanks for having me, Jason.
Jason Resnick 2:17
Yeah, thanks for being here. First off, I have to say, thank you very much for your service. I did not know that you were in the military. Until I think it was maybe a couple of years ago. Like, I had to go back when I first encountered you. It was back in I looked in my Gmail. Yeah, I was like, Where’s his name come from? and it kept always popping up. Then I went back to 2015 when you’re working with Dan Norris. So yeah, first of all, thank you for your service. I do appreciate that. And thank you, I have a lot of military friends. And they are way too humble. And I, it’s something that I totally admire and you and your service and what you do for this country. So I appreciate that.
Tom Morkes 2:58
Thank you, Jason. Appreciate that, man.
Jason Resnick 2:59
So, Tom, I wanted you to come on the show today. Because this season is all about pricing, and pricing in a way where look, as a service provider, we often default to our hourly pricing right off the bat, I mean, it’s the easiest thing, because it’s the easy number to figure out. And it’s just time and materials and both. But as we progress, we start doing value base, and we start to maybe even play in the product, eyes, service space, and all that other thing. So the reason why I wanted to bring you on the show is because well, you will a couple of books about pricing, and a unique strategy of pricing, which is a name your own price. And I’ve always been, I’ve always wanted to have the guts to do something like that with some of my services. And I still have like, I could probably do that with this, right. But I wanted you to come on to the show and share with some of us here some things that you’ve encountered over the years, you’ve worked with a lot of different people, a lot of different businesses, and your services in and of itself. I mean, you have obviously have some pricing to that. But before we dive into all of that, why don’t you share with the audience of n the Domo who you are a little bit about who you are and why you do what you do.
Tom Morkes 4:18
Yeah, so the the abridged version, but yeah, you mentioned the military. So yeah, I was in the army. That was kind of my profession, my whole life into adulthood. And so I went to West Point spent a little over five years active duty as a commissioned officer, you know, did a deployment was a company commander of a headquarters company, an airborne unit toward the end, and about that last year, and I was like, it was kind of the do or die moment, after those five years. It was like, where do I go from here? The career trajectory for me, I was kind of in the Special Forces area, I wasn’t tabbed the distinction village this important for military to make when I was in the in the SOCOM kind of end, the support element. And so I was like, Well, I can go Special Forces, if I want to, you know, try out for that can be Pete, that was on the docket. But I always wanted to kind of pursue creative things I really did, like, and so creative things, business things. And then And literally, that’s how I thought was like in things because I was like, I don’t know what these things are. But I want to do them. And I was like, I want to do something creative. And I love the idea of starting my own business, like the idea of being able to produce money out of nothing or create more value or less or none existed before to be able to provide for myself. It was like, What is that? Is it Emerson or Thoreau or like the the self reliant self reliance, whoever wrote that, it’s like that, you know, the self reliant man, you know, it’s like, I want to be self reliant, but part of that means Can I earn an income, and that’s the day and age that’s kind of one of the ways you have to kind of be self sufficient. It’s not just like, on the practical food and, you know, hunting gathering side, but on the money side, can I make money doing work that I enjoy doing on the creative or business or entrepreneurial side? Well, I’ve always been attracted to writing and two books, and I’ve always been a big writer, I don’t think I’m a great writer, but I’ve always liked writing. And I’ve always been wanted to do that and been enthralled by it. So all these things kind of just like confluence of events, ended up kind of, you know, leading me to where I am today. So I got the army 2013 flesh, you know, five, six years later, I have a publishing company. So we publish up, you know, handful of authors every year is kind of a boutique thing. But I do it because I enjoy it. It’s not something I tried to ramp up. People ask me all the time, like, I only work with people I know. It’s like, it’s a weird business structure, but it works for me. So I do that I’ve done consulting advisor on the on lots of all sorts of launches, I’ve collaborated on bunch of stuff. So I’ve gotten to work with some really smart individuals and be kind of like inside of behind the scenes, helping them run these campaigns or start these businesses and things like that. And, and it’s led me down a bunch of different rabbit holes. So now I have a couple different online businesses, I have the publishing company, we do have a discount deal site, I do a bunch of other stuff online, I do I do some coaching and consulting advisory type stuff, because I was heavy on the implementation side in the last couple years. And that’s something I kind of wean myself off of because it couldn’t scale. And I didn’t want to grow an agency, I’m sure many listeners, and maybe I been there a thought and it’s like, I realized that a little too late in the game, but but it was a little bit of a shift to change directions from that. Because like the business was kind of built around that I was like, you know, I don’t want I really don’t want to be implementing all this stuff the rest of my life, I was like, Surely there’s other other ways I can add value in different ways. That’s just better. And what I found was, I went from, you know, multiple employees to getting rid of all my employees. I’m basically a solo printer now, which is a wild thought. And I use contractors for a lot of the stuff I do, but my life is just very, I’m just feel very blessed, honestly. So if we were to say, I don’t know, this is where it wasn’t where you were going with this. But I feel like I’ve organized my life in a way where I’m like, wow, things are really good. I’m really fortunate. I took a lot of risks, they were calculated risk, but I took a lot of them. And they paid off in the long run, I had a lot of failures, I’ve screwed up a lot of things, you know, messed up made mistakes, but I just kind of kept going. I always try to limit my downside, I’ve always tried to make my upside unlimited. And slugging it out, man, it wasn’t like an overnight success, I still not where I want to be like professionally, creatively, creatively, you know, even just in life and family and stuff like that, there’s still a lot I want to get to. But now just where I’m at, it’s like, yeah, that’s kind of in a nutshell, I’ve done done a lot of work online. And now I continue to, to work with tons and tons of people who are authors, bloggers, content creators, YouTubers, people ebooks, the courses, software services. And part of what I do in some of these businesses, I’m either publishing them on the discount deal site, I’m working with them to get them new traffic leads sales for their products and stuff like that, I’m kind of a little bit of a middleman in the space, I kind of get the creator side of it. So I really am not a great writer, but I love good writers, you know. And so it’s like, but I can help, I know how to figure out the marketing side of it, I know how to get an idea in front of people. I know how to communicate and coordinate promotions and marketing campaigns and things like that. It just, it turned out, there’s like I built up this like set of skills. And I had this predisposition to be kind of naturally good at it. And all the stars align. And so that’s kind of what I do. And I know we’ll talk about pricing, pricing was kind of how I that long story. Pricing, the one of the first major things I do is write a book on pricing, which is payment on pricing. And I did that because I was curious about the pricing. I was scared to price my own stuff. So I did it because I was actually afraid of just putting a price on anything by myself. And I approached it like a like a student might approach maybe like a thesis or, or what do you call that like, the big final like dissertation dissertation? There you go. And it’s like, I just approached it like that, like a student, I’m like, I’m going to research this, I’m going to interview a lot of people, I’m going to try to put make heads or tails of this, and I’m going to implement it at the same time I’m doing it. So I can learn the fastest way possible. So like that was that was like kind of the I don’t know if that was actually really kind of critical thing. Because you could have at the time, if you asked me about it. Nobody really cared about this pricing technique at all. But there was like, but you could see the conversations people are having around it when I would get brought up. And that was to me was an indicator that maybe there’s something here and hey, nobody else has written the book on it. So I might as well. And anyway, you can see how that kind of ties into the publishing. It’s everything else I do to just kind of this interest in learning and improving things and doing things better. And also being willing to just like take risks on crazy things like babies, you want pricing, because it can work.
Jason Resnick 10:01
Yeah. And it could fail well,
Tom Morkes 10:03
Jason Resnick 10:04
Right. Like you could have spent that all that time to make that book and then people will just keep paying zero.
Tom Morkes 10:10
Well, basically, you know, in a lot of ways it kind of was a disaster be in that regard. Because like I I published that right after I got to the army. So I gave up my paycheck. Right? Almost captain, the army was getting paid pretty well. And I gave that up to go to zero dollars per month, because I hadn’t actually built a lot of people are like, Oh, you should you should build a runway to get your stuff started. Like Yeah, I agree with all that advice. It’s not, it’s not for me, I’m the kind of guy I’m like, I’m gonna jump into it and figure it out. And so that’s painful. I don’t recommend it. But it was like I did that. And I published that book, it was the first thing I published right when I got out of the army. I’ve been writing and publishing other things while I was still in the army last year, too. And this is like the first thing I was like, this is a critical juncture. I’m going to launch this thing. This is going to set me up for for the next year, year or two. And I think we did like $1,000 in sales on the book. And I was like, Oh man, I just spent like 12 months on this thing for $1,000. The first month I was like, Okay, well, it’s time to either throw in the towel, or I’ll give it one more go see what happens. So like I doubled down on all these things that you don’t think about doing until you’ve been there, done that and you realize how important they are. So yep, I actually have to do all the hard work of getting this in the hands of people have to do the hard work of creating content around it, blogging about it, getting a podcast about it. But once I started doing it and putting that out there is crazy how many doors actually opened up for me. And I got invites them to tons of things. So it was like I just had to do the little bit of effort. And there was something there that was like captivating for people. Interesting enough subject. Were just tons of doors opened up once I actually started marketing it. And now it’s great because this really cool passive Legion money maker for me this one little book, and it’s like, wow, I would have killed just for that, like a few years ago. You know what I mean? It’s like all this was one of those things actually is kind of meaningless in terms of like revenue to me, but at the time, like, Yeah, I would have killed for what I have today. Major takeaway right now, if people could write this down, it’s okay. If it takes some time. And the first launch, I teach launches and how to do these things. And it’s like, I never want to launch to be a fail. But hey, sometimes things happen. They don’t go as planned. Don’t bank everything on one a one time event. It’s like know that that’s just it just the kickstart get it out there and then you there are things you can do to grow traffic attention, you don’t get people’s attention, get in front of people increase your reach, that all these things can then add to the bottom line help you grow your profits. So sorry, to go down another rabbit hole there. But
Jason Resnick 12:21
no, no, I think that’s great. Because I mean, that’s what I tell people a lot people always like, how do I get clients? How do I you know, is this going to get me clients quick, and I let you have to put the work into it. There’s no silver bullet, there’s no one time you can’t plan for via morality. You can’t do any of those things. You have to put the work in. And then there’s a snowball effect that happens afterwards. And I’ve run my own business now for close to a decade. And there are like you were saying you reflect back on certain points. You like? Yeah, I didn’t actually think about that, then. But I do see how all of those dots connected and how I got to here, right? It’s always refreshing to hear people that I mean, and you’ve worked with folks like Dan Norris and Neil Patel and and all these other great marketers, right? And you’ve been behind the scenes of those people. So you got on those people’s radars. And just to be able to, you know, have something like you said something that was interesting enough, that put yourself on those radars, and you did what you needed to do to get there. Well, that connected the dots for you and your career. And now you like you said, You said you’re blessed. Yeah. And that’s where you want to be. And I think I, myself included, that’s what I strive to do. I try to build my business around the life that I want to live and not the other way around. And so that’s what I’m trying to do building that foundation, I definitely want to pick your brain a little bit more about how you shifted from implementation and consulting, because I’m doing that now. But yeah, I mean, to back that up to the pricing, though, Lady when you started that name, your own price thing, and you saw the indications of Hey, look, this idea. So it wasn’t really being done at this point. But this idea of this thing, could have some legs, how did you know who to get this in front of to then say, Hey, this is going to be interesting for me, you know, maybe in the long run, if I connect with these other people?
Tom Morkes 14:17
That’s a great question. And it’s actually something that’s like, I wonder how methodical I was at the outset. Or if I’m just rationalizing how methodical I was now kind of looked back 2020 on it. If I remember correctly, my idea around it was like, well, I want to keep writing and publishing. I’ve written some other books, and I done a lot of blog posts, blog posts on topics kind of run around, though. The premise was, I actually just I riffed on what Stephen Preska was talking about in the War of Art, because I was like, I’m in the military. And I love art, writing and creativity and draw all these things drawing writing, you know, I’ve written screenplays I’ve done you know, I paint I draw, I’m a big, I’m an artist kind of guy. I’m not necessarily good at it, but I love it. And I love that stuff. So I say he talks about the, in the War of Art, like this creative struggle that we all have. I was like, that’s great. But it’s only one book, there needs to be more of this. So I was like, Well, I’m going to riff on that as can be the premise of this blog. So I was like writing and publishing a lot of these kind of things like this War of Art, ask if you will. But of course, it’s like, I’m putting these things out there. I don’t know where they’re going to go. I was like, these are just ideas I’ve been wanting to share for a long time. I’m so scared to publish this stuff publicly, by the way. And it’s so absurd now looking back on it, but it’s like I didn’t, I didn’t want people to think I was a fool. Or, you know, oh, look at this guy. You know, it’s like being in a very masculine environment, the military, it’s like, I could just imagine somebody making fun of me for this blog that I published, you know, it’s all these like, inside my own head kind of things. So I actually started a blog that was kind of with no name on this thing. It was a blogspot, or some like that I published all this stuff, publicly, but privately, like it was putting it online, but I wasn’t sharing with anyone, I had to do that for like, 10 or so blog posts before I finally started my own website and started putting my name behind it just to get used to that idea. So I bring that up. Because you don’t always know where these things are going to go. Sometimes takes time. Somebody needs to be iterative. I looked at this, and I said, I was actually I was like, I’m writing. I’d like to make money for my writing. And so I am writing books I’d like to sell make money then from selling books. I don’t really like Amazon. I don’t necessarily like the concept of playing the Amazon game at the time. And I still don’t even though I’m a publisher, and we publish books on Amazon. I don’t like Amazon’s game. And so for me personally, I was like, Well, I don’t want to, I don’t want be just pumping out books on Amazon or plate. That’s not the game I want. I decided to play a different game. I was like, you know, I’m going to thing I’m going to play the game I’m going to play as where’s the something I’m interested in learning? Where can I try to figure it out? Where can I share my learning on the fly as I go, and with pay what you want pricing was like, So where was that was like, I’d like to make money from my writing and make more money from the work I do online. I was kind of nervous to price my things anyway. And at the beginning, I was like, you know, the worst thing that could happen to me right now is I publish a book, I put it out there for 10 bucks, and I get like 10 sales. Because or if I put it out there, I put it out there for three bucks. I get like 20 sales like that. I thought to myself, like the worst thing that possibly happen isn’t zero sales. It’s like a net sales to just be like, some people have pity on me. And then it just dries up. And so I was like, I can’t do that. I can’t like my emotionally I couldn’t take that. Like I had to be able to do this in a way I was like, well pay what you want pricing had heard an interview, I think was on Pat Flynn’s podcast was with the visionary brothers. And they were doing the hybrid athlete at the time. And now they’re doing some different I think it Pittsburgh, but they’re like fitness guys. And so they started they had a gym, shorts online training platform, but they were used to they were selling their training stuff. They’re like e courses there. That that kind of stuff online is pay what you want. And I think the number they share with Pat was something like over 200 bucks a day, they were making pay what you want. I was like, okay, that’s a six figure revenue stream for letting people choose their own price. There’s something here because they’re selling education. They said they were also selling physical goods, but they’d have a minimum price on those. It was like, you know, I don’t know, like weights and stuff like that. I was like, okay, there’s something here. So I just I just went down that route I put out I was like I put out an offer free consulting. So he asked you, you pay what you want. This is what this is a range that I think might be fair, something like that. But you guys can choose what you want to pay. So I offer page one consulting page, one advisory, I did a little pay what you want implementation here, and they’re just testing things out. I then started selling ebooks, my ebooks as pay what you want, just you guys pick the price. And so when I took that approach, it was like, Why did I choose page one pricing is because I had heard somebody doing it, I thought it was interesting. I was like, Well, nobody else has really written a resource on this want to get into the writing game. Anyway, the publishing game. This actually seems pretty fascinating to me, I’d like to use this was all these all these things, right. And I just put them together, I wrote the book on it. And I’ve needed to do an update version of it. But it’s still kind of the only thing that’s out there. There’s no one else really talked about pay what you want price it. What’s so cool though, is by doing that, think about that, how many people are talking about that? Almost nobody, if you’re talking about pricing, how many people are talking about pay, which will present almost nobody. So what’s cool is it’s still actually totally legit, pay what you are pricing structure and strategy. And you’ll actually see big name companies using humble bundle. It’s one of my favorite examples. Not to go into crazy detail about them. But humble bundle. If you’re a video gamer, you probably won’t know who they are. But Gosh, they’ve Derek maybe a decade old now what they would do, the way they started was video, use a bunch of video games, pay your own price, and you can get access to them. And then they did it with tears and incentives. So a lot of the things that I learned I model what they were doing, I learned from a bunch of other sources started implementing these things. And I realized, wow, there’s a lot of case case studies were paid, which one is successful, where people are doing this over time span, like over time it’s working. And I was like and look at this for immediate short when kind of strategy it works actually really well. So great way to just so if you’re like I’m thinking about using this, do it as a one time event, put something of yours out there, Jason, like maybe it’s a book, maybe it’s consulting, one time, 24 hours, whatever you guys can pay what you want sometimes to do that around my birthday, I’ll make like everything, pay what you want, just to have some fun with it. Those are the great ways to just test it out, see what comes with it, it can be an event, it can be fun, really engaging for people. And the reason it wins when we can break this down a little bit more. But I won’t go into too much depth. But the bottom line is there’s elements to the pricing strategy that makes it worthwhile. And that made it a win. And so it was like this confluence of events, just putting it out there. And then just kind of getting after marketing and sharing with people. I looked at places like well, who’s already so I looked at pricing, media verticals pricing, anybody’s already talking about pricing, right. So I can slip in and say here’s pay what you want pricing, you may be touched on it. But here here’s some companies that are using this in fascinating ways that you might not know about, I could look at entrepreneurship, online business marketing, I could talk about page one pricing at every single another’s context. I could talk about it from a list building perspective, I thought I think a which one is fantastic to grow your list. Instead of just having a free lead magnet make the book by which people can people can pay zero dollars, way better than just having a free lead magnet as far as I’m concerned. You know, things like that. So I basically just took the ideas like where else can this be used. And I only scratched the surface, and I got really far with it. But if I wanted to, I could have zoomed in on specific industries, I could have zoomed into yoga, or health and ways that you could use it in that space, like how yoga studios can use pay what you want, once a month or once a week to increase registrations, I could have gone down all those different rabbit holes. If I wanted to aggressively I kind of barely scratched the surface on those I found I had no I was in no need for additional coverage just from targeting pricing business marketers It was like after that I was like a tons tons of people inquiring and asking about it and wanting to work with me. And then obviously one thing led to another from there.
Jason Resnick 21:19
Before we dive into the two surprising things that Tom got from this strategy, as well as him bringing down his actual results from this, I would like to pause and highlight something Tom said here, what Tom is sharing with us today illustrates how hard pricing is he says how nervous he was about how to put a price on his work. Tom also mentions that he has, he really had no idea that anyone would pay anything for his work. And this was a genuine fear he had pricing is connected to so many things in and around your business, that most developers and designers selling services, just the same to look at the hourly rate of someone else and pick a number either higher or lower based around their comfort level and skill level compared to that other provider. It may not come as a surprise to you that it really doesn’t matter what you are, I think about our own pricing. It’s the clients thought it’s the clients value. It’s the clients perspective on our price that ultimately matters. Inside feast. There are several lessons and worksheets focused on how to build your service for your clients, and how to figure out what it’s worth to them so that you can put a price on it. This allows you to make your price a no brainer to the client. It also reframes the mind of your client away from comparing you to other providers. feast is the community and resource hub for developers and designers ready to get off the project searching hamster wheel and actually run the business they set out to build feast helps position you in the market with what you do, who you help, and helps you build the processes and systems for client management, sales, marketing and delivery. Your business isn’t the same as everyone else, I get that what you get when you are a member of feast is personalized guidance from myself. It is essential for me to meet you where you are, and make sure that you’re getting the exact tools so that you don’t get lost in the shuffle. The moment you sign up, you’ll get a link to chat with me. So I can create a custom syllabus to meet you where you are with over 70 videos, lessons, resources, monthly community calls and a slack community. I can get you what you want right away. If you’re serious about not competing on price, and having clients that respect you and your expertise. And I love to see you on the inside a feast, head over to feast course.com today. And if you use the code page, what you want at checkout, you’ll receive the first month of feast for just $20. Now let’s dive back into what surprised Tom the most about this strategy. And then I asked him the hard hitting question of his actual results.
So what surprised you the most about when you when you did it and got results from it? What was what was the biggest surprise
Tom Morkes 24:29
two big surprises for me personally, one was that people will pay money even though they don’t have to. So the stuff I rolled out initially at I think as zero dollars. So zero plus. And so when the opportunity when you can, when you could pay nothing for something, will you pay money for it, and there was a light bulb, so Wow, look at that. A good percentage of people will pay more, or will pay for something that is free or that that could they could get for free. They could take for free. It’s not technically free. It’s a different thing. And they get it the people who pay get that they like okay, this is a gesture of goodwill, there’s a there’s a reciprocation element here. So the people who contribute are like, good job, Tom. Basically like the pat on the back. It’s like Patreon is huge platform now, people are just getting supported to Patreon. So thanks. And even if they’re not even getting anything from it, it’s like, Hey, here’s a tip. Thank you. That’s how I did it was like a tip jar. There’s no incentives or anything like that with the with the original book, I did it. But obviously to incentivize and get more get people to spend more money. It’s great to have incentives reason to contribute more things like that, we can break that down. But for me, the big thing was just that one people would actually pay money for something they did not have to. And the second thing is for me personally was people will pay for my writing. Like I said, I was really nervous about that. But when I published, it was notes from Seth Godin revolution conference. So I went to this conference, I took a bunch of notes. I asked him if I could publish it, share it, and he said, Yeah, go for it. Pretty cool him. And so I put it out there as like, Hey, I’m gonna make this pay what you want. You guys could tip it’s free, zero dollars. But if you want to tip my creative work, you can but I made about $500 in that month, first month, that was while I was in the army never made passive income before I never made money online from anything, never really sold anything. It was a mind blown. Miss amazing. I still remember that Sunday went out. It was Sunday, Sunday, one day with my with my girlfriend who’s now my wife at the time. We went out in Nashville, we were you know, going Honky Tonk. It was like a Sunday afternoon or something like that. Listen to music and some food. And I remember seeing these messages come in people, five bucks, 10 bucks, you know, 50 bucks, hundred bucks. And it was just the coolest thing. So it was like that was a realization. For me, these two things are really fascinating. People pay money, even if they don’t have to. And my work is good enough. And you can create money, you can make money online. You know, it’s one of those weird things until you’re done it. Now I don’t even think anything of it. But every now and then when I put myself back in that position, I remember how fascinating that was and how invigorating It was like it was an adrenaline rush. And so now I do a launch. I’m like, I have no adrenaline I’m just exhausted. Usually I’m like, whatever. Who cares if people buy or not whatever. It’s all good. Like, oh, we did a good job, I put it out there. And there’s nothing else like, but but at the time I was like, I’d be like paying attention every single sale I came in. So those are my two big realizations. For people who want to explore this, the real benefit is it lowers the barrier to entry. That’s the number one big thing. So like, if you’re like lower lowering the barrier to entry, if you have a price point, even a $1 price point is a barrier to entry. And that’s why people think oh, I’ll just put my book on Amazon. If we’re talking books, and I’ll price it at $1. It’s like oh, should get tons of sales. So I know the same friction to buy something one click buy on Amazon for $1 product is the same friction for $1,000. tv or $2,000. TV on that on that platform, the actual amount has nothing to do with it. But zero actually does lower the barrier to entry. So $1, even one cent does not really lower the barrier to entry, there’s actually a difference between zero or zero plus, and at center $1. I know that sounds while but lowering the barrier to entry is a is a game changer. And then the other things that it does, I think there’s there’s an element of reciprocity and generosity, I think it promotes sharing, it makes it way easier to share things, when you have something that you’re giving away for free, or people can pay whatever they want. Man, we get so much sharing from those kind of things. So it’s like, it’s like the viral component of it. These benefits that people don’t realize, but these are the I think the underlying things that really make a big difference if you’re going to use this pricing strategy.
Jason Resnick 27:53
Yeah, I mean, it’s making me think a little bit about some of the lead magnets that I have for my services side of the business. And, you know, I often use the idea of a down sell. So more of like I’ve had the conversation, whether it’s not a good fit, for whatever reason, budgetary timeline, maybe it’s just not what I do whatever it could be, then I say, hey, look, I have this 50 or hundred dollar product, that’s all electronic product, obviously. And you could buy it if this is helpful for you. That would almost I’m almost thinking now, I should flip that. Put that in the front. And this might be one of those things where I play with like around my birthday, like you suggested it, put that in front name, your own price, and that I can use alongside what I use for my road mapping sessions, which are more of like a dating period kind of thing, where it’s like, Hey, we’re going to work together on this thing. It’s the set price to set deliverable set timeline. And if you like what comes at the end of it, we can continue on and this is how we continue on. And I like that name your own price. Because you tell me when you through the book out there or anything you throw out there with the naming on price, you have a price in mind. Right? Like Yeah, so you know, like, individually, it should be this X dollars. How many times did people pay that or more?
Tom Morkes 29:13
Yeah, so the way the numbers typically break down over time, and obviously, there’s probably a lot of variables, but for my books, and a lot of things that I’ve for books and digital products like e courses and things like that, what I found was that something like usually about 70% will pay the minimum or nothing, or the lowest amount about 30% will pay something and what you’ll find is of the people who pay something, or they wouldn’t always have the total, so hundred people buy, buy your pay what you want to think 70, just take it for free or pay the minimum amount 30% spent $1, or more will say, Well, about 5%, I’ve noticed two to 5%. Or like maybe what you might call whales or something like that people who are going to contribute way more than the average. And that makes up for a lot of people who take it for free. That’s been my my experience time and time again, you’ll always get maybe one, maybe five out of 100. Maybe it’s one out of 20 or one out of 30. But somebody who gets what you’re doing, they see it and they contribute way more than they do, we’ll just take a very generous offer. So with the books that some I’ll get Kim’s contributions are 5200 bucks every now and then, again, maybe one out of like 30 or 50 contributions will be something like that over 50 bucks, which is way more than I would have expected for an E book, obviously, right? With a 30%, I usually find that their give or take around what I would have priced it at if I had a retail price, like if I was selling that book on Amazon. And people would spend maybe four or five bucks on or something like that. And that’s usually what we see with those those other people put were to averages out, if you look at the averages, my average, if you’re just looking at the people who actually spend money, pay $1 or more on these things, what I find is that the average is actually higher than I would have gotten if I was on Amazon. And that’s the truth. People actually don’t buy ebooks, they’re like, we’re very rarely at like the 910 987, dollar price range six, six, so usually $5 or like for 99 and below. And so honestly, like the fact is, I think that some of these books, the last time I did the average, it’s been a while, but something like Oh, I think I make like seven or eight bucks per book, all the people who contribute. Okay, so that’s only 30% of them. If I averaged out the old people who’ve opted it, who have gotten as a subscriber because they took it for free initially, that would lower the overall average, obviously, probably to something maybe in the one or $2 range or something like that. For me, I look at them, like okay, but that’s okay, they’re on my email list. Now, guess what I think the one thing I haven’t done is really gone through critically. And it’s just too hard to do, I think but how many people took something of mine for free through pay what you want ended up paying me for something. But it’s happened more than enough where I know what happens. I don’t have the hard statistics on it. But that’s it. So it’s like, I can’t think of a better lead gen. And then also, by the way, I can make some money on the front end. Fantastic. Oh, by the way, I’m positioning myself as somebody who’s actually giving more way than just taking, or I’m not like, oh, here’s my lead, man, please sign up. It’s like it’s kind of I don’t know, it’s like the master good goodly master good. But it’s like, at the end of the day, it’s like a free, it’s like everybody gets it. Like everybody gets the joke. And it’s like, nobody wants to put their email address into something. But these days, when it’s like, oh, this is a seven dollar $10 ebook. You can get it for zero dollars or more. So you can start nothing get it you spend $1 50 cents, you spend 20 1500 bucks cover steak dinner for me, that’d be nice. Whatever you decide. So the point is that’s up from a positioning standpoint, position play. It’s way better than the free lead magnet. Yeah, it’s way better than Oh, here’s a book and I’m making it free. It’s like no, no pay, what you want is actually different than free. And I know sometimes I use will sometimes use that that interchangeably when I’m talking. Just I hope that’s clear. If I use that, it is a different thing. It’s not free, it’s it has a price point, you’re just reducing the barrier to entry to zero or whatever that minimum amount is. so more people can get access to it. The positioning, the framing of that is way different. And it’s actually I think it’s a it’s a it’s an authority builder, credibility builder if you do it, right.
Jason Resnick 32:44
Yeah. Because it almost shows like, I mean, you like I’ve heard people say, you want a lead magnet that you would charge $100 for Yeah, right. And then if you’re saying, Okay, I’m throwing this out there, pay what you want. It’s showing confidence that, hey, look, I know, this is good. So I’m expecting you to pay me something, but you don’t have to. And I think that in and of itself is just, I don’t know, I like that positioning and that thinking there because I feel like I’ve done that kind of pay what you want maybe a handful of times my entire time. But it’s always been in like that sidebar, hey, you want to buy me a beer kind of thing, right? Because the content that I was reading was good, right? So I give 25 or 50 bucks, or whatever it is. But I like that idea of just putting it out there as hey, here’s this thing, there’s value here, pay what you got out of it. Right? What was the value?
Tom Morkes 33:42
So this is an interesting thought to kind of just dovetailing off off of that idea. So like, yeah, the other thought to I don’t know if you want to go down this rabbit hole, but I thought a lot about this in the past to and are you familiar with, influenced by Dr. Schiele, Dini, or any books that are about influence or, you know, negotiation, persuasion. So in that book and influence, and he talks about reciprocation, this idea, it’s like, when somebody gives something to you even a flower or water, it’s like you feel indebted. There’s a natural indebtedness, we feel when somebody does something for us, it’s kind of human nature, the truly pathological people are there, they’re good to go. They don’t feel that at all. But the rest of us feel something that’s like 95% of the population will say, or 90% of population. And so the point is, a lot of people will just when you give them something of value, even the smallest thing, they will feel indebted. And what’s fascinating about the research that I think Dr. Schiele, Dini did with the influence of some of these other books that have come out and studies around this topic of reciprocation, you doesn’t have to be a one for one, like kind of change or something like that. It’s not like I give you a water bottle, you’re gonna give me a water bottle the future, it’s like, No, I’ll give you a bottle of water, and then you’ll go purchase this house for me. So I’m your realtor, you know, it’s these kind of things like power, Fred, I bring that up. Because when you do this, the position play here is if you think you can take advantage of this, but you have to think about how you do it, people need to be educated on page on pricing. That’s another critical piece here, it’s not a ton of education. But like when somebody is taken to a pages, like what you offer this, that’s a lot of confusion, you have to kind of set the stage for it. So you want it to be integrated. That’s why I love the idea of if you’re just going to test this out, just want to see what it does. Try it on a birthday or try it on somebody that make it a pay what you want to and just see what happens and you can make it exclusive just to a few items, or whatever you want to be really crazy. Try it with consultant you might be blown away. You know, there’s there’s going to be all sorts of things you can test out with, but you can test it small with digital products or something like that, where your margins there. And it’s like if somebody takes it for free, whatever, no harm, no foul, but if somebody contributes great an experiment, it works. The other thing that though they think about though, is that that allows you to if you do an email blast through some social media, it’s like, hey, it’s my birthday, and I’m making everything I do everything I create, pay what you want for today as a way to say thank you, people kind of get it and then they’ll be Okay, I get it now. And then if they go to a sales page where they can use this stuff, maybe you explain a little bit in more depth wise pay what you want. What’s the point of it? Why are you doing this? Just a little bit? And then this ties into your like, well, what is the average price point you get? Well, one of the things I do to ensure that people actually contribute is I make sure it’s, you have to streamline this and make it as frictionless as possible, because it’s so confusing. And it’s so it’s confusing, because it’s rare. So the normal average person who’s online is like, I’m going to be given a price, I’m going to click Buy, maybe there’ll be some additional tax, and then that’s that, that’s the transaction. So the idea of saying, hey, you can pay with whatever you want for this, you pay zero, or you pay 1000, you know, you could treat me to a nice steak dinner, you can give me a bottle water, nothing, just take it and it’s cold, good. That requires some level of clarification explanation, and for people to really get it. And so you do want to have, you want to have a reason you’re using it. Sometimes the reason is good enough, I’m just doing this an experiment, I want to see what people would pay. And maybe that’s enough, I think I like to do it around a principle of generosity. So if I’m doing it on my birthday, great, great hook, great tie in. If I do it, maybe some other event or day, I might tie it into a charitable cause as well, percentage of all these contributions will also go to charity. That’s a good hack to for this. Anytime you tie in charity, or something charitable, it can’t be relevant. So there’s nuance to this, you can’t just oh, I’m just gonna pick a charity, and then it’ll, it’ll make money. And that’s what Tom said, it has to be integrated and alive. Right, right, just some of these obvious things. But if you integrate chat charity into what our nonprofit, charitable type contribution into it, like a percentage of 25% of everything you contribute is going to Pencils of Promise are going to what is it water,
Jason Resnick 37:13
or the Charity Water? I think it’s called the
Tom Morkes 37:16
charity water. Yeah, you know, the usual, usual. And then there’s thousands and thousands of charities, I mean, the point is, if you tied into something where especially if it’s relevant, I think in the past, I’ve done it, where I’ve tied it into I forget the charity was, but it was where we did it was was like a nonprofit, we do micro loans, where you don’t get a percentage back, she’s basically give money away to, to entrepreneurs around around the world. And it was like, and they just have to pay back the loan like they would anything, but there’s no interest on it. So it’s great, gotcha, great deal. So I’d like to bat and I’m kind of entrepreneurial focus. So like, Hey, 25% of this will go to these, these funds in here that are investing in entrepreneurs around the planet, so they don’t have to pay interest on loans to get started. Great. That’s a tie in that makes sense. She’s one, I think, what’s consistent what’s aligned with what you’re doing. And then use that but and then come back, the last piece I was gonna say, kind of going off on this tangent was, the positioning is really important to think about and be able to explain it. But if you can do that, and you can find alignment in the charitable cause or the reason you’re doing it, you will find that people are really, it can be really invigorated by this, like, it’s something that people can really latch on to makes it easy for them to share and promote. And you’re gonna be less less likely that you’re gonna have people that just trying to take advantage of you, especially if you’re just doing it, testing it out, when you can explain what you’re doing and why when people get the joke, they contribute. And and this the last thing I was going to say on it, last piece, page one price. And if people get to, like they know that they can contribute anything, why would they? Yes, you do want articulate what? What is the value? why you’re doing it, you want to give them a guiding principle? What do people like them pay or what are the range, so you might have a suggested amount, this is where we reduce the friction. So with an E book, I might say this would retail on Amazon for $5. So but you can you can take it for free, you can treat me do a dinner, you can give me a cup of coffee, whatever it might be. But I give them an incentive or Humble Bundle does a great job of this. But they have a lot of data. And they’ll show what the average contributions are that are coming in. So they have there’s some technical stuff on the back end, that’s pretty cool, too. But that you want to have some guidance, and make sure people know where to go with this. It does that sorry, this is the last last thing. This is this is really good, though I was gonna forget it otherwise. But if you do this, this is what’s really cool. So this idea of reciprocation, right, once people start thinking about being generous to I found this is like a subconscious thing. So probably requires like a lot more due diligence. But I found there’s something to this, like, once I get started people or I get people starting to think about generosity and being generous, and what they’re doing with the sharing of their content doing this, then they get it better than they’re more generous to like, so it kind of is a self feeding system. So that’s one of the reasons why I was talking about make sure you explain why you’re doing it. If you can tie it into your story, if you’re gonna do it for a long period of time, though, it kind of has to become a bit of somewhat of the part of the story. And it helps to just kind of come back to these lessons of generosity, because guess what, then when they see your offer being generous, they’re gonna be more generous. So final hack there. I know, we covered a lot of territory, but hopefully that was useful.
Jason Resnick 39:52
Yeah, no, definitely. I mean, it’s sparks of ideas, in my own mind, you know, just on how I could probably position my services. And as I said, I’m transitioning from more of the implementation stuff to consultancy. And I could see where that would definitely play into it. Like the story, they the idea of, you know, like you said, maybe link it into a charity, that kind of thing. So I have a whole lot of ideas, gonna have to jot these things down, for sure. But yeah, I mean, I want to be mindful of your time. The thing, I think, the whole idea of pay what you want, I mean, I think this goes, I went to your about page, and these and you said, like, you know, the fastest way to get where you want to go is really a straight line. And I that I’ve said variations of this, a good friend of mine, the best man at my wedding, he said, Look, you know, you’re going to get to where you want to get to, it just may not be the path that you think right. And he always kind of said this for me. But like, you elaborate a little bit more on that saying like, in fact, it usually means taking a very indirect, unconventional approach. And I’d like this because I, you’re essentially telling people, hey, here’s a lead magnet, but it’s not a lead magnet, this is a product, you pay what you want. And that allows you to stand out, it’s like you said, you kind of have to have that little bit of explanation, because it is unconventional, it is different people aren’t used to that sort of thing. I love that. And for me that I go against the grain a lot. And that’s why this pay what you want has always been in the back of my mind a little bit. And I’ve tried different things, especially, you know, on the product side of things like just, Hey, I’m going to do this, you know, I like I did a 41% off of everything that I sell on my last birthday because I was 41 years old. And so just like those kind of things and people like why are you doing that? And said, I don’t know, we’ll see what happens. I don’t know, you know, I run my business. And this is what I do.
Tom Morkes 41:48
Yeah, you get to do fun experiments like that. It’s like Why not? You were about to say I think you were about to say a word that I was like, yeah, that’s how you didn’t say it. But I think the word conditioning, I don’t know, if you were about to say it almost felt you were but I was like, that’s actually a good word for this, because there’s some amount of conditioning that needs to that maybe is one way to think about it. I know, they could probably have a negative connotation. But the conditioning you need for like, if you’re an athlete, you need to be in you know, you need to get conditioning, you need to be trained, and but in the intellectual space, we need to kind of condition people to think, say, intellectually, or about this idea, pay which you are present. So there is some sort of, say conditioning or indoctrination that kind of has to take place can happen pretty quickly and in a very lean way. But if you’re also trying to do this over an extended period of time, then I think yeah, it’s it’s worth, you want to kind of tie it into the story and think about how are you going to continue to explain this in the future? So it really should I think, for somebody to use it in perpetuity, it has to be part of the core mission. I think with Humble Bundle, they’ve done it for like a decade now or half a decade at least. And they’ve always tied it to charity. And so always made sense. And I mean, I know they got a lot of stuff going on behind the scenes. And so I’m not just saying well, they did it. So anybody can do it. I don’t mean it that way. I’m just saying that there are great examples of people who have just tied it in. And that’s just part of the proposition. That’s part of how that works. Anyway, if you’re not ready to go that far into it, try it with an experiment. And then when you decide, oh, I’m going to make some things maybe, in perpetuity, pay what you want. Think about just how you can condition or get somebody kind of mentally prepped for what’s to come, which is contribution of their choice. That’s surprisingly, there’s a lot of people I’ve gotten this one, one major negative feedback from it. And I don’t even know how negative it is. But it’s feedback. And it’s I just didn’t know what to pay. And that’s that’s in there. So sometimes people won’t pay because they don’t know what to pay. It’s like I didn’t want to not be generous. It’s like Well, okay, give a couple bucks or take it for free if you don’t have them, or But anyway, but it’s like it’s weird. It’s sometimes that’ll happen. That’s rare. I don’t see that as a large quantity people. But I’ve gotten that enough, where I feel like that’s a percentage will find the biggest struggle and figure out what should I pay? What does a person like me? Who is generous pay? Or what what does a person like me pay in a situation like this? So come at it from the the endpoint of the user. But yeah, I think you have a ton of ways you can test this out, Jason, if you want, you could share what you’re planning to do. Let me know, I’ll take take a look at and give you some notes and kind of pointers on rolling it out.
Jason Resnick 43:59
Yeah, I’ll be awesome. Awesome. Yeah. Appreciate that. So before I let you go, what’s up next for the next 612 months?
Tom Morkes 44:06
Same old, same old, which means is always different, right? You know, the drill? Yeah. Right. It’s like, gosh, I have no, I have no idea. It’s like, so I’m like Vin Diesel man, I live my life a quarter mile at a time.
And it’s like,
that’s it, man. So we had a lot of things. But they’re like, I’m just trying to get we’re in the middle of the launch right now, for one of my businesses. I’ve got a couple authors we’re publishing later this year, we have a lot of things going. And I said we but it’s like kind of me now. So I’m kind of using that in the Royal we sense now because there’s no more real team. But it’s like all contractors and stuff like that. But yeah, we’re publishing books, I’m still doing some coaching. And that’s kind of how it by the way, you were like, I’m kind of moving away from the implementation more to the consulting, that’s been my transition over the last year and a half. And it’s slow, but it’s worked out relatively well, where I’ve been able to kind of replicate all the implementation and come with coaching, advisory type stuff. And so now that’s freed up a ton more my time too, because that is way less intensive, you know, so a lot of freedom, that’s for sure. Listen to this. It’s like yeah, I know how exhausting that can be. Be if you’re not knocking, if you don’t know, if you don’t think you want to be doing that forever, it’s like, start right now think about how you could start selling things outside of implementation. That’s it’s a tough road. It was a transition as a lot of people are coming to me for what they thought was the solution that I offered and that’s required just a lot of conversations and repositioning things in my sight and stuff like that. So it’s been a gradual process, but I’m looking at kind of doing the same thing. As I mentioned earlier, very good life I’m trying to maintain everything grow it trying to help a lot of other people succeed through the coaching to the publishing through everything else that we do through the campaigns we run. But yeah, just a lot of craziness. You know, the drill. It’s it’s never the same. It’s always something new.
Jason Resnick 45:36
Yeah, and young kids to play young kids.
Tom Morkes 45:38
That’s great. It’s great. It’s a forcing function. It’s like you gotta be efficient.
Jason Resnick 45:42
Oh, absolutely. I don’t know I don’t know before my my first son was born I don’t even know what I was doing. Like when he was born It was like he probably
Tom Morkes 45:50
editing like the same sentence like 100 times and then you’re like, I don’t care that it has time to just put it out
Jason Resnick 45:55
there. Let’s just get it on this the wall thank thank you Tom. This has been a awesome for any of you listening out there. If you are thinking about doing this thinking about pay what you want? Let me know send me a tweet St. Thomas. We will put coms Twitter profile in low in the show notes. Tom where can people reach out and say thanks
Tom Morkes 46:15
show notes. Jason’s show notes number one just go to the show notes. But if you’re listening you’re like okay, well I don’t know how to get the show notes right now. Tom work is calm TOMMRKES calm or just google it or ducked up go it or whatever but Tom works com that will introduce you to the to the underworld that is that is my brain and and and to whatever depths you guys want to go pay with you on pricing publishing. I’ve written and published on a lot of different topics so if you guys are curious about those but yeah, like you said, if somebody has questions about it, just tag me on twitter I’m just at tmorkes with tag me in something if you have questions about patron pricing or anything like this, I’m happy to jump in not always on the social media platforms but every now and then I’ll jump in and I’m happy to answer questions like that but Tom work is calm. Go to your show notes. Jason. I’d say that’s the main place to go cuz I’m sure you’ll have a just linked up. So
Jason Resnick 47:01
absolutely. Yep. Awesome. Great, Tom, thanks for your time today. Appreciate it, of course and might have to have you back
Tom Morkes 47:07
anytime, man. If you want to spiral we can spiral you just let me know. Go.
Jason Resnick 47:12
All right. Awesome. Awesome. Well, thanks again for your time, and everyone listening Till next time, it’s your time to live in the feast.
If you’re inspired to give pay what you want pricing a try. I know that Tom and I would love to hear about it. Ping us on Twitter and let us know. Next week we’ll be back with Chris Do talking about how you can position yourself with your clients to show value in your work. Till then your time to live in the feast.
Season 6: Pricing
More episodes in this season:
S06 E01 – Value-based Pricing, Impactful SEO Techniques, and Creating Great Client Relationships with Brendan Hufford
S06 E02 – Generosity, Pay What You Want Pricing, and Lowering the Barrier to Entry with Tom Morkes
S06 E03 – Developing Client Relationships, Leveling Up Your Pricing, and Getting Better at Business with Chris Do
S06 E04 - LinkedIn, Pricing Strategies, and Why Video is the Medium of the Future with David Kilkelly
S06 E05 - Mindset and How Goals Inform Your Pricing with Vito Peleg
S06 E06 - Consulting, Pricing, and Understanding your Clients with Hillary Weiss
S06 E07 - Case Studies, Client Research, and How To Create Killer Conversion Copywriting with Joel Klettke
S06 E08 - Story Lines, Positioning, and How To Differentiate Your Business with April Dunford
S06 E09 - Pricing Your Productized Services and Working with Intention with Brian Casel
S06 E10 - Knowing Your Audience, Making Mistakes, and Pricing Products vs Services with Jack McDade
S06 E11 - Creating Results and Building Relationships Through Your Pricing with Mor Cohen
S06 E12 - Undercharging, Targeting the Wrong Audience, and What You Should Do About It with Alex McClafferty