Hands down- pricing is the most puzzling of the 4 P marketing mix. (That’s product, price, place, promotion) In fact, finding that right price is like searching for the holy grail. You believe it’s out there, you search and search but it’s always elusive, just out of reach.
It’s a veritable see-saw. Charge too much and watch your sales plummet. Charge too little and you get a flood of sales that bankrupt you because you lose money on each one. You see the problem.
So, how do you find the right price for your services and products? Study.
If you want to increase your sales and profits, get better control over your cash flow and have enough money to grow beyond where you are now, it’s time to start learning about the wonderful world of pricing strategies and models.
Oh joy, you say. I understand. It’s not the sexiest part of being a small business owner, true. But mistakes are costly- in time, money and motivation. And, increasing your pricing savvy just a bit can mean thousands more dollars in your pocket each year. Let me give you an example.
Mistake #1 Taking a ‘what I don’t know won’t hurt me’ approach
Meet Sue, a coach who charges $80 per session. Her prices helped get her first clients and she hasn’t changed them in years. Sue is certain that she’ll lose her current clients if she raises her prices and not attract new ones as easily because of the recession.
What Sue doesn’t know is causing money to leak out of her business. If she was aware of pricing practices, she’d be able to raise her prices without a single complaint or worry.
The solution is Baby Step Pricing. Taking a teeny, tiny price increase that benefits you but is barely perceptible to your client.
Sue could raise your price to $85 easily. Why? It’s inside the customer’s comfort range. Five bucks isn’t that much more to pay, right? Especially when the financial benefits of working with Sue would easily be more than that. It’s an almost invisible increase to the client.
However, Sue’s income gets a nice boost. Sue earns $2400 a month when she sees thirty clients normally. After the baby step, Sue would earn $2550 per month, and extra $1800 annually. That’s found money she can use to attend a conference, buy a new computer or give herself a bonus!
You can find profits in your business, too.
Making mistake #1 doesn’t mean you’re stupid or lazy. It makes you human just like the rest of us entrepreneurs. We all fear the unknown, right? Deciding to learn more about pricing at your own pace is the first step towards having a profitable business that works for you.
5 More Mistakes
Start changing by fixing your pricing mistakes. As humans we are hardwired to pay attention to mistakes. (You can get 50 compliments on your website yet be totally obsessed with the one person who didn’t like the colors.) Start where your thoughts naturally go, I say.
I’m happy to share my special report 5 Mistakes that Keep You Poor with you. All I ask is one small favor in return.
Please take my survey I’m working on a pricing product right now and want to be sure I address everything that’s important to you. I’ll be the only one who sees your response but many fellow entrepreneurs will benefit from your thoughts.
I’ll thank you by sharing the link to the report at the end of the survey. A real win-win
Thanks again for taking the survey!