Why Not Wanting to Pay for Software is Holding Your Business Back
Earlier this month, Elementor announced that they are increasing their prices. Most notably, 1000 sites (called the Agency Plan) is moving from $199/year to $999/year. This is only for new customers but, as is common when software pricing changes, people are outraged. Not only is this sort of outrage getting old, but I would argue that if you’re not willing to pay what software is worth, you will never grow as a business. And not for the reason you think.
Why Elementor Should Raise Its Prices
I made this point on my live stream: if you need the Agency plan, $999/year should be nothing to you. If you sell 101 websites (the number of sites that would make you outgrow the “Studio” plan), you should be making way more than $999. Easy decision, right?
Upgrading to $499/year once you hit 26 should be a no brainer too. If you are charging $500/website, that pricing allows you to make $12,501.
I will concede that Elementor gave away too much for free at first, and people don’t like spending money. But we get off pretty easy in the WordPress space.
In a great episode of The Matt Report, Matt breaks down Elementor vs. Webflow pricing. Spoiler: Webflow is way more expensive, and you get less. You’ll find it’s the same for lots of other services. Leadpages, for example, starts at $27/mo if you pay for a year up front. And again, you don’t get as much as WordPress + Elementor.
But that not the real problem. If you’re mad about Elementor (or whoever) raising their prices, the problem is you.
Your Business Model Doesn’t Work
Like I said above, if you need a plan that allows for 100, or 1,000 websites, the pricing should work for you, because you should be making a TON of money. Let’s say Elementor conservatively saves you 5 hours per site. Now let’s say you made 26 sites last year. That’s 130 hours saved.
If you charge $50/hr, you made back $6,500. And I’m guessing the amount of time saved and the hourly rate are both low.
And if you’re still charging for that extra 5 hours per site (you should – your charging for expertise), that’s time and money you can reinvest into the business, while still paying yourself1. In other words, you should easily see the value of paying $499 to make $6,500.
But as I teased in the beginning: it’s not missing this value that’s holding your business back. It’s not even that you need to “spend money to make money.”
It’s that if you can’t see importance in paying for tools that add value to your business, it’s hard for you to see the value in what you offer.
If You Want Cheap, You Stay Cheap
Elementor knows the value of what they offer. They probably did similar back of the napkin math that I did above2. So they raised their prices accordingly. Advanced Custom Fields did the same thing. They were grossly undercharging for the value they delivered, and they adjusted.
But if you never want to pay for what products are worth, it doesn’t only affect what you pay. It affects what you charge.
“I can’t raise my rates. People will get mad and I’ll lose clients.” This statement is made by someone who doesn’t understand the value they offer clients or customers. And believe me: I was there too. I suspect many business owners are for a long time.
A Lesson in Value Pricing
The best boss I ever had was a man named Joe Rizzi. He owned the deli I worked at In high school. Saturdays, we’d close at 3pm, and my friend Amy and I would stay to clean. That’s when school started for me.
Mr. Rizzi liked that I was a budding entrepreneur and was insanely supportive of it. He let me put my business cards on the counter and he’d give me weekly lessons about running a business.
One of the most memorable lessons was about pricing:
Mr. Rizzi: “Joey, how much do you charge to make websites?”
Me: “$10/hour.”
Mr. Rizzi: “You need to start charging $25/hr.”
Me: “What if people don’t want to pay that?”
Mr. Rizzi: “Are you good at what you do? “
Me: “Yes. I’m very good.”
Mr. Rizzi: “$10/hr doesn’t tell me that. It tells me you’re cheap. If you charge too little, people will think it’s cheap, and they won’t hire you.”
At 17/18, that blew my mind, but he was right.
Here’s another example: When my wife and I were looking at houses, we saw this beautiful home. Lots of land too. For about half the price of other houses we looked at. Our first question was, “What’s wrong with it?”.
Turns out the outside looked great. The inside needed thousands of dollars of work done to get it up to code.
How You’re Being Held Back
So what’s the point of all this? If you don’t see the value in tools that deliver high value to you, you probably don’t see the value in your own work, and that’s a problem. You will never grow if you can’t convince people you’re worth paying good money for.
Unexpected price jumps are never fun3, but when it happens you need to ask yourself if the new pricing is worth it. When you switch your thinking from, “My bottom line is changing,” to “this delivers so much value that I’m not mad about the price hike,” you’ll really start to grow as a business owner.
Excellent points about value pricing! It’s the same as an attorney or a doctor who works in a shabby office — you think they must not be very good at what they do. And maybe they are, but it doesn’t *appear* that way, and when someone doesn’t know you, that first appearance is everything.
Also to your point “You will never grow if you can’t convince people you’re worth paying good money for.” I think a lot of freelancers, entrepreneurs and small business owners aren’t convinced themselves. You have to believe in yourself before others will believe in you. If you come off as confident and charge accordingly, others will believe in you too.
I too felt it was a fair pricing model.
Elementor didn’t increase the price for a long time, which made it look much.
In my case, this blog post made me realize what Joe Rizzi’s words did to you 🙂