Christopher Murphy · 25 June, 2020
Summary: In this pricing walkthrough, I'll explore how I prototype pricing by ‘sketching with numbers' when I'm thinking through my pricing strategy. I'll think through the different price points for Mr Murphy Ltd. (Services × Products) and The School of Design (Products × Services), allocating indicative prices to them.
As I've noted in First Principles: We need to move away from selling our time as designers to selling our value, captured in products × services. This is why I'm de-emphasising time spent delivering services (time-consuming), instead emphasising time spent developing products (time-efficient).
Imagine you’ve set yourself a goal of earning £50,000 by selling products. That number may be too low, or it may be too high; replace it with a number that works for you; adjust the figures accordingly.
- 1 × £50,000
- 50,000 × £1 FOOTNOTE
Unless you're Steve Jobs, or similar, £50,000 for a single item is unlikely. And selling 50,000 items for £1 is time-consuming (there are too many people to take care of). [[Cf. 1,000 True Fans]]
The reality is you're probably going to be hitting numbers somewhere in the middle, selling a variety of products × services at different price points: some at the high-end, some at the middle-end and some at the low-end.
Sketching with Numbers
The following is a first pass at prototyping the numbers for Mr Murphy Ltd. and The School of Design. There are three product × service offerings, targeted at different audiences:
Mr Murphy Ltd.
My work through Mr Murphy Ltd. is focused on design consultancy and designing and delivering learning experience for businesses like: PwC, EY and Deloitte.
This work is very much focused around digital product design: Design Thinking; Strategy; Ideation × Execution; Design and Build; UX +/ UI. I focus on:
- Working with businesses to develop a design thinking culture; and
- Enabling MBAs to learn about the power of design, in particular its bottom line impact on businesses (ROI), and teaching them design thinking methodologies.
MBA × Design Thinking ~£5,000
The School of Design
The School of Design is focused on designers who are high-performing individuals. They don't have executive budgets, but they do see huge long-term value in educating themselves so they can level up their ambitions.
- Accelerated Learners ~£1,800–2,400
- designtrack Membership ~£300
MBAs × Design Thinking
£5,000 for a three day executive design thinking course. In a room, in the real world. MBAs learning about the power of design, in particular the ROI of design and its bottom line impact on businesses; and design thinking methodologies.
Audience: MBAs at PwC, Deloitte, EY….
Cohort Size: 12 × 2 (24)
Turnover: 12 × 2 × £5,000 = £120,000
Social Proof: MBAs need proof that design thinking is worth investing in. This GDS overview is very good: “Last year we saved £210M [thanks to design].” —Ben Terret, GDS
Sending 3–12 executives on a design thinking course, so they can understand principles that might save them £120M+, is an incredibly good deal. (In fact, £5,000 per person is probably too low.)
Marketing: 1. Networking: I've discussed these courses with leaders at PwC, Deloitte, EY… and there's considerable interest. 2. Advertising Spend: ~£20,000 on hyper-targeted LinkedIn advertising and Google AdWords.
The six weeks figure, below, is wrong. This is more like 6 months of support
at the £1,800 price. These accelerated learners want to change their lives and you can't change your life in six weeks.
£1,800 for a
six week design thinking accelerator with: group workshops and discussions; triad mentoring and accountability; and tapering (weekly-fortnightly-monthly…) one-to-ones. The pitch is as follows:
The School of Design is a community for aspiring entrepreneurs learning the power of design × business to build the startups of tomorrow.
- Audience: Mid-Level Designers, Aspirational and Highly Motivated Learners.
Cohort: 12 × 4 (48)*
- Sketching With Numbers
Turnover: 12 × 4 × £1,800 = £86,400 (48)
- Turnover: 8 × 3 × £2,400 = £57,600 (24)
- Turnover: 9 × 2 × £2,400 = £43,200 (18)
I discussed the above figures with Tori and Dani – after they had experienced a couple of office hours each – and they agreed £1,800 is too low. I’m going to stick with £1,800 for them and any others who join for Cohort 2.
Then the price goes up.
At the current fee, it’s a 25% discount. In addition to the materials in The Library, I am writing bespoke content for both Tori and Dani, almost like a textbook written just for them. I'm also building them a bespoke curriculum, i.e. this isn't a traditional art school.
My current beta-learners (Anda, Sean, Stephen, Etc.…) will give me testimonials, as will my Masters graduates, who are now working all over the world.
This is from Anda:
The School of Design is incredible. It was unlike any other art school education I've experienced. I would have paid double this for the lessons I’ve learned so far and I’m still learning!
* There's no way I can run this for 48 students. I spend too long with Tori and Dani to make that possible. I think two cohorts per year of nine students each is more appropriate. I want to enjoy the teaching and I want to really nurture each learner.
Also, bear in mind that Vix – who might teach on the programme – is being mentored on a programme that costs £2,500 for a similar offering.
Marketing: 1. Advertising Spend: Hyper-targeted LinkedIn advertising (mid-level designers, creative directors, startup designers…) and Google AdWords.
£295/Year (£30/Month) for membership of the designtrack community – a gym for your mind, which includes:
- Community: Discussion; Peer Support; Accountability (Slack)
- Content: The Library; The Journal (Notion)
- Curriculum: Workshops, Me × Guests; Founder Firesides (Zoom)
Audience: As above, entrepreneurs who are eager to learn, but who might not be able to immediately afford the Accelerated learning programme.
Turnover: 250 × £295 = £73,750
Marketing: 1. Advertising Spend: Instagram advertising, linked to @joindesigntrack.
Total Estimated Turnover: £280,150
Tease out the Synchronous vs. Asynchronous aspects of the Community × Content × Curriculum.
Screenshot (below) from the Financial Times: A four-week executive – MBA-level – programme: $52,450. The market is there for this kind of content and the price points can be supported. There is also the added value of access to The Library, and ongoing support (from me) post workshop.