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The Battle For Your Monthly Budget
How to Increase Your Profits and Retention Rates By Charging Monthly
How much is your monthly mortgage or car payment?
How much will WeWork cost each month to rent?
Whether intentionally or subconsciously, most of us think in terms of monthly spend for business and personal finances.
Through this newsletter, I’ve shared various ideas for increasing profitability, generating more customer lifetime value, and finding new sources of business.
But this concept may be the easiest for you to implement and benefit from ASAP.
Want a recap of previous resources from Meeting of the Minds? Check these out…
How To Generate More Revenue and Increase Profitability (premium subscribers only)
The Ultimate Guide to Launching A High Margin Launchpad Business (premium subscribers only)
Unlocking New Revenue, Feedback, and Referrals From Your Community of Clients (premium subscribers only)
21 Marketing “Channels” to Experiment With To Find More Ideal Clients (premium subscribers only)
My idea for you is this…
Consider offering your services via monthly rates (as opposed to upfront retainers, quarterly or annual packages, etc) if you aren’t doing so already.
There’s a battle taking place for your monthly budget whether you realize it or not.
Spotify and Apple Music are duking it out over your monthly music subscription fees.
Are you getting groceries from Whole Foods (aka “Whole Paycheck”) or has HelloFresh, Blue Apron, and perhaps even Uber Eats come in to snatch your monthly food budget from your coffers?
Sure, you may hire employees using annual salary figures, but try managing your company’s cash flow without breaking down your outflows into weekly and monthly allocations.
Your mission is to claim space in the monthly budgets of your Ideal Clients.
Once upon a time, we billed quarterly for Meeting of the Minds memberships.
This caused occasional late payments because it was less effectively planned for by our members, which led to cash flow crunches for us and more frequent cancellations.
While we’ve also taken membership dues upfront for an entire year (and have even offered discounts for some people to utilize this option), it was challenging for us to ask for an additional 5-figure investment when renewal time came up because no regular budget for our services had been established.
But then we switched to monthly membership rates and our profits have increased, retention has improved, and few clients are late on payments (most are auto-billed, and can budget for our services ahead of time, which is easier for everyone!).
Instead of saying, “it costs $12,000 to work with us,” imagine how much easier it is to sell the same package of services that costs “only $1,000/month”.
Not only is it easier to get someone to say YES to working with you, but you can increase profitability by toying with the monthly price.
If you charged $1250 per month for the same hypothetical services, most business owners wouldn’t flinch at the difference in monthly fees assuming your services are valuable. If you work with clients over the span of a year, you’ve just pocketed an additional $3000 merely through tweaks in pricing!
If you sell B2C items as opposed to B2B services, you could sign up for a service like Affirm which will allow customers to pay for your products through smaller monthly payments, removing barriers for them to buy from you. In fact, I’ve used Affirm like thousands of others to buy my Peleton, and now I pay $55/mo over 36 months instead of forking over $2000+ when I bought the bike last year.
Paying off the Peleton is now part of my monthly budget.
Maybe I should dub this the “Peleton Principle” or something cute like that, but this ain’t no joke.
You are leaving money on the table if you don’t consider ways to offer your products/services via “low, monthly payments” instead of upfront or quarterly.
Of course, this won’t work for every business, but if this does spark a lightbulb in your head and/or you think this could benefit you, let me know.
I hope you experiment with new pricing strategies and win the monthly budget battle!
Jared Kleinert is the founder of Meeting of the Minds (motm.co), as well as a TED speaker, 2x award-winning author, and USA Today's "Most Connected Millennial".
Meeting of the Minds curates "super-connectors" and subject matter experts as invite-only attendees to 3 day summits in places like Napa Valley, Bermuda, and elsewhere, as well as “deep dives” such as this Marketing and Biz Dev strategy & implementation workshop. Members of the MOTM network include CEOs of 7, 8, and 9-figure businesses, creators of globally-recognized brands and social movements, New York Times bestselling authors, founders of pre-IPO tech unicorns, c-suite execs from Fortune 500 companies, and others.
Jared's career began at 15 years old when he started his first company, and took off at 16 while working as the first intern, and then one of the first 10 employees, for an enterprise SaaS company called 15Five, which today has raised over $40M and has almost 2000 forward-thinking companies as monthly recurring clients.
Later, Jared would become a delegate to President Obama's 2013 Global Entrepreneurship Summit in Malaysia, write multiple books including the "#1 Entrepreneurship Book of 2015", and speak at TED@IBM the day before he turned 20.
As a highly-sought after keynote speaker and consultant, Jared’s clients range from organizations like Facebook, Samsung, Bacardi, Estee Lauder, IBM, Cornell, Berkeley, AdAge, and the National Speakers Association. His insights on entrepreneurship, networking, marketing, and business development have been featured in Forbes, TIME, Harvard Business Review, Fortune, NPR, Entrepreneur, Mashable, Fox Business and more.
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