It’s the cry of entrepreneurs everywhere…
“What do I charge?”
And at SOCG, if we had a dollar for every time we’re asked that question, we’d be running the world, like Jeff Bezos.
But the answer is critical, because if you get it right, hitting your market’s sweet spot can ramp up your sales overnight, without doing an extra lick of work.
Getting it wrong is like putting up a police barricade in front of your offer, just when your prospects are getting ready to join, enroll, or buy.
Not only that, here at SOCG, most of our new members who are setting their prices, have heard about the benefits of RAISING their prices, but are afraid to raise them for fear of a price mutiny, where everyone bails, out of resentment or disgust.
So yes, you’ve gotta lay a firm foundation if you’re going to raise your prices, because if you do it wrong, you can trigger a mass exodus.
OK, then let’s take a look at the techniques, strategies, and mindset that haul in the most clients and the most cash.
How NOT to Shoot Yourself in the Foot!
Understandably, the biggest fear when working with your prices, is losing, alienating, or just plain pissing-off your prospects, clients, customers, or patients.
That’s why entrepreneurs are so reluctant to charge more.
But as Bruce Ariens, the coach of the Tampa Bay Buccaneers is famous for saying, “No Risk It, No Biscuit.”
In other words, you have to take a small risk if you want to get off the dime and go for the gusto, instead of gradually being painted into a corner by trying to win (like Walmart) the battle of the absolute lowest prices.
But that doesn’t mean you just raise your prices willy-nilly.
No, it takes careful thought, testing, calculation, and preparation.
So the first thing is getting rid of some “head trash.”
Which means jettisoning the belief that everyone is focused on price.
Sure, some folks are, but it’s a HUGE mistake to base your business on this erroneous assumption.
Besides, depending on your overall business strategy…
… You may not want those types dragging you down in the first place (those who are always nickeling and diming you and trying to get a bargain).
But if you don’t believe that price is flexible, look at the exact same product (like a set of bed linens, for example) sold at Walmart, then at Target, then at Neiman-Marcus (before they filed for bankruptcy because of COVID).
What’s the price difference… a third more? 50% more? Even double at Neiman’s?
Sometimes the prices are just slightly more, sometimes ridiculously more.
So a lot of people, as evidenced by the high-end stores’ success, are willing to pay more for the EXPERIENCE, because there’s a completely different ambiance at Target compared to Walmart, and even more so at Neiman’s.
On a personal note, I know how powerful “the experience” can be from a ridiculous example about 20 years ago when I was living in a Podunk town in southern Minnesota.
I needed yet another vehicle as my kids started driving, so I headed to our local used car dealer who sold reasonably priced cars with about 30,000 miles on them.
After writing the guy a check, he took me to the local convenience store, topped off the gas, and bought me a case of soda.
And strange as it may seem, even after plunking down 15 grand for the vehicle, that case of pop and the little bit of gas, which cost him maybe $20, felt like I’d just won a mini lottery — even though I knew why he was doing it.
That seemingly insignificant “experience” stuck with me all these years and subsequently reinforced my decision to buy more cars from him.
Now here’s another crucial question you have to be able to answer if you want to crank up your prices…
The Foundation: Are You Worth It?
How do you put a value on what you do?
If you’re a copywriter or marketing consultant or designer or a process engineering consultant, or whatever… and you orchestrate an extreme makeover on a client’s sales or production environment… how do you price it?
Do you charge the going rate? Or X dollars per hour, per word, per pound?
Does it really matter how many pages or pounds of material you produce? Or how long it takes to produce them?
Not in the slightest.
What REALLY matters are the RESULTS your work can produce for your clients. THAT is the only valid measure of what your work is worth. What does it allow them to do, to be and to have?
For example, a website makeover project might take you 50 hours to complete. Would you feel guilty charging $100,000 for that makeover if you knew it was of sufficient quality and ingenuity to result in millions of additional dollars for the right client?
Then why do you feel almost nauseous when you think about raising your prices above the norm in your field?
It’s because you haven’t convinced yourself of your true worth.
So instead, you’re looking around and comparing yourself to people with low opinions of themselves and their work… when what you should be doing is looking seriously at what your work can do for your clients.
If you ask for what you honestly believe you’re worth, and you show people it’s worth to them, they will pay it. Raise your opinion of yourself and your work, and your income will follow.
One more thing before we adjourn to Part II in a couple weeks…
Another block some people have about raising their fees is that it’s somehow WRONG, BAD, or EVIL to charge high prices. That charging high prices is unfair to the buyer. That you’re ripping people off!
Or they feel there is something wrong with getting rich… that it’s more difficult for a rich man to get into heaven than it is for a camel to pass through the eye of a needle. Or that money is the root of all evil.
If you harbor any of these surprisingly common thoughts somewhere deep in the inner recesses of your mind, it’s a problem. You’ve got a distorted view of wealth.
And frankly, it’s not money that’s the root of all evil, it’s the LOVE of money, meaning greed, covetousness, and tight-fisted selfishness.
BECAUSE WEALTH is as morally neutral as a fire that can burn people or cook them life-saving food.
On the other hand, people are sometimes immoral, as you may have noticed.
So it’s what they DO with the money, not the money itself.
OK, that’s it for this segment, but there’s more to come in Part II.
In the meantime, if you need help with pricing your programs, products, or services, apply now for our FREE business analysis.
Along with a deep dive into your fundamentals that make it easy to scale, you’ll see what it takes to raise your prices in a safe, balanced, professional manner.