Strategic Coach
Daily ·
When someone says you’re too expensive, what they’re really saying is:
Importantly, as long as someone else says ‘Yes’, you’re not too expensive. So stick to your pricing guns.
Daily ·
“Never discount your products.” is good advice.
If your customer is the kind of person who likes to pay full price, you’re doing both of you a disservice if you offer regular discounts and sales on your products and services.
On the other hand some people love that feeling of getting a deal and that drives a lot of their purchasing decisions. Without discounts they may never buy from you, ever. It pays (pun unintended) to know what type of customer you have so that you can serve them best.
It is worth noting that once you choose to discount and run sales, you’ll need to commit to doing them forever as people will come to expect them.
Daily ·
Choosing how much to charge for something is difficult.
If you’re used to be paid by or charging by the hour, the temptation is to caclulate how many hours your thing took to make and multiply that by your hourly rate. But that doesn’t accurately create the value of an item or service.
Value isn’t what it’s worth to you, value is what something is worth to the buyer.
Netflix includes films and shows that took thousands of hours to make, yet we get access for less than $20 per month. We’re used to having things to watch on our TV for free, so we don’t highly value something that gives us that.
When someone buys a piece of art, it may cost them thousands of dollars. But it’s something she’ll get to keep for life. It’s also a statement that she’s the kind of person who buys expensive art. And it may make her feel good to know that she’s supporting an artist she admires.
Expensive or cheap, price your thing based on the value it gives.
Daily ·
A few things to consider spring to mind when it comes to increasing your prices:
1. Who is your service for? A gym is relatively cheap because they are competing to offer the lowest price for customers that want the cheapest option. Many people are looking for more though. More results, more guidance and more accountability. And they will pay more for that service. It’s okay to be ‘too expensive’ for some people.
2. Grandfathering is a good way to honour those who’ve been with you since the beginning. Simply keep them at their current rate and raise the price for any new members.
3. Not always, but usually, better quality clients will pay more. Charging more is a way to keep your best clients.
4. Try this exercise: What would your business look like if you charged 10 times what you charge now? What would you do differently? What would you do the same?
Increasing your prices can be another way to set yourself apart and to really lock-in who your service is for. Just make sure that the value someone is getting from you is equal to what they are spending.