In this episode, James and Phoebe share 6 insights on what raising your prices really means, as well as providing an exercise to help overcome resistance you might have with around this topic! The six insights are:
1) The effort to sell is not proportional to your price tag In most cases, it takes the same amount of effort, or even less, to sell a higher ticket item. James feels strongly that raising the price of his latest product would have resulted in higher revenue numbers of his launch, even if the total number of customers were lower.
“Your product still needs to over deliver, and be at a premium level”
2) The transformation is in the transaction James offers a lot of free content through his YouTube channel and blog. However, he says that almost all of the testimonials, results, feedback an life changing stories have come from paying customers, not people that accessed the free content.
“It came from the people that put the skin in the game”
A lot of entrepreneurs want to help people, and think that the only way to do this is to not charge for their products and services. However, commitment is created when money is exchanged, and there is a direct correlation between the size of the transformation and the size of the transaction (higher fee, more results).
“No one values free; they just don’t.”
3) Making the assumption that they can’t afford it
This is usually the #1 reason entrepreneurs hesitate at raising their prices. By making assumptions like this, you’re forcing people to play small and not letting the prospects decide for themselves.
James recommends business owners not be afraid of people saying “No.” It’s all about the meaning you give to the word.
4) Pricing is marketing and branding
Entrepreneurs usually look at what competitors are charging and charge a little less, or a little more.
Do you want to be known as being the cheapest? James and Phoebe discuss why being the “Walmart type business” might not be the best thing for you.
5) The “No” from a cheap sale is worse than the “No’” from a “I don’t have the money” sale
Having a higher price gives the perception that you’re worth it, and other customers are paying that much for your services.
6) Higher prices attract higher quality people
These are the people that are actually showing up and putting the work in to get the good results. This lets you, as a coach, teacher or facilitator, be more effective.
A higher quality customer already has a busy life, and the person already takes responsibility, which is why things are working for him or her.
Exercise to work on raising your prices:
1) Identify your offer and price point
2) Assess how you feel about your current price and promise that you offer clients right now.
3) Determine how it would feel to change the price, to both a lower and higher level. Once you find the “sweet spot”, push the limits and go higher than this number.
4) Once your new price is set, be very present to the reaction of the prospect. If it’s a quick “Yes”, you prices aren’t high enough and have been set to low.