A pricing model for expertise: The Four-I Framework
In 2020, I did a podcast called Free Speed with my mentor and colleague, Scott Johnston. We talked about ways to improve performance in mountain sports without training. This most often requires strategic changes rather than physical ones.
We did, however, give one particular tip on how to improve running economy. And after the podcast aired, the only feedback we received was, "Thanks for that sprinting idea!"
I threw up a little.
The most long-term value was in the abstract concepts rather than the specifics of their application. However, specifics save people time. In the short-term, that has more value to most people. And the shorter the timeline, the more expensive the information should be.
My goal is to turn my expertise into a business that generates $10,000 per month. (I have a long way to go.) To serve that purpose, I've come up with a framework for pricing a scaled delivery of expertise. It could apply to any expert or consultant, but I'll describe it in the context of coaching mountain sports.
I call it The Four I Framework:
- Ideas are free;
- Information is cheap;
- Implementation is expensive; and
- Immediacy is exorbitant.
Several shifts happen with each step up:
- The application moves from a general audience to specific clients;
- Access moves from rare and restricted to frequent and immediate;
- The offering shifts from product to service;
- The scalability of the offering drops, often quickly; so
- The price should increase, often sharply.
Here's a breakdown of the hierarchy in terms of a coaching business.
Ideas are free.
"What about the Northwest Face of the Devil's Thumb?"
Saying something and doing it are two very different things. Nobody likes The Idea Guy, especially if he thinks armchair fantasies add value. Shouting from the stands is easy to ignore in sport but sadly tolerated in business.
Price & Product
The price of opinions, ideas, and hypotheses should equal their real value: $0.
In a training context, this could be free content that includes: "The first step in increasing aerobic capacity is to narrow the gap between your aerobic and anaerobic threshold heart rates." The idea is key to the process, but it's not specific enough to describe how to get it done.
This level of expertise should be freely available as open content.
Information is cheap.
Next, expand the general concept from theory into practice. Detailed actions accompany the explanations.
Price & Product
But the execution of advice, explanations, and specific instructions is still on the part of the reader. The value-to-content ratio is up to them, so the price should be low. It could be not much money (like buying a book) or not much commitment (like signing up for a subscription.)
In a training context, this is along the lines of: "To narrow the gap between your aerobic and anaerobic threshold heart rates, first test your thresholds, and then keep 95% of your training intensity below your aerobic threshold heart rate."
This level of expertise could be published as a manual, a book, an off-the-shelf training plan, or as subscriber-only content.
Implementation is expensive.
Now the concept and its application are clear. Next, who is going to make it happen? Implementation crosses the line from product to service. As such, it becomes more bespoke, but it can't scale like the first two levels. Price it accordingly.
Price & Product
Implementation includes in-person service, direct correspondence, and custom design. It puts the value creation in the hands of the consultant, the focus is much more personal, and the scalability of the products low. It should be priced accordingly (i.e., high).
Many self-motivated athletes handle their implementation, but with a higher risk of error. A custom training plan offers more reassurance, addressing their unique needs or constraints.
At this point, the information from a manual or a book breaks down into simple, actionable advice that accounts for specific client needs and constraints.
Immediacy is exorbitant.
At this point, the concept, application, and accountability are as specific as possible. The remaining element is flexibility. How dynamic will the service be? The higher the access and adaptability of the expertise, the higher the price.
Price & Product
Immediacy is implementation-on-demand. It's personal, dynamic, and very expensive.
This could be a custom short-term training plan with a daily review of each workout, less than 24-hour response times to questions, and constant adjustment. The tweaking either serves maximum performance or escalated accountability.
Immediacy is the domain of bespoke strategies, often real-time communication, and on-the-fly adjustment. It's also the area that is most often under-priced.
Confident consultants will go above and beyond with ideas and information as feeder products for implementation and immediacy. They know that the ultimate challenge—and the real value—is getting the job done, not thinking about it.