Why You Should Raise Your Prices!

The economy is tight, business failure is high, consumers have less to spend and my advice to you is:   Raise Your Prices! You might be thinking… Scott you are crazy! I can’t do that especially when people and business owners are tight, I will lose business!

Consider the many, many benefits!

First, competing on low price is the fastest way to go out of business. I know short term it seems like the best way to start, especially if you left a company that you worked for that provided a product and service and now you are going after the same market only with a lesser price. You do not have the overhead of the company you left so it appears to make sense short term.

The problem is that low price is NOT a sustainable marketing advantage. The airline industry knows this all too well! The key is to have a USP (unique selling proposition) now called many other terms. What is your advantage besides price? Is it your service, experience, follow- up, quality of product, you add more value (my favorite place to start)…

What do struggling businesses do? If sales are down they promote the highest price item they have to their list, usually at a discount and if they are not clear on their own, cost of good sold, labor to delivery and profit margins, usually it relates to more losses! If you have 3-4 products or services you must know the cost of good sold, gross profit and net profit margins for each! That is why the fast way to add 10% to the bottom line with everything else being equal is to raise your prices by 10%! When you do that it is always best to find ways to add high perceived value at low cost!

Here are several ways to add more perceived value to your products or services at a low cost:

1.      Add bonuses to your product or services!

a.      Do monthly teleseminars with speakers on subjects that would be important to your customer or client list. Even if you do not get a big response to those to opt in to your monthly call, the archived call can add a lot of value to customers or clients in the future.

b.      You can take groups of calls and put them into a theme and use that as a special web url…example. www.nvinc.com/specialbonus (not a working ULR just an example) and add that to your product or service offer as a $297.00 value with three teleseminars, MP3s and transcripts to download!

c.      The key when you do this is the copywriting of the email that describes the bonuses and value that you are offering to your list plus the copywriting that is on the web page.

d.      It is one thing to send something of value, it is quite different to have your customers or clients CONSUME the bonus or product. Everyone is busy so it must be a catchy, benefit-driven headline to get someone to actually go to the bonus and download it!

2.      A Webinar!

a.      This requires more work because you actually have to put the PowerPoint together on your product or service and take your customers or clients through a presentation. The value is very high because of the visual component where they sit at home and at their computer watch your presentation and listen to you on the phone. This is a great way to help explain the next steps in your program, how to consume your product or service or how to obtain the most value! A webinar may have a perceived value from $497.00 to $1,997.00! Plus you may have an offer at the end to buy your next product or service or just have it as pure education!

b.      If you do not want to do it, invite someone to do one for your list and have them record it and send you the file to put on your members only site. They get free exposure to your list!

3.      A Free Guide, Report or E-Book.

a.      This is a great way to build your list if you do not have one. Put the free guide or report on your website for opt-ins! Anyone can have a free report. Easy headline is, The 7 Costly Mistakes to Avoid When ___________________. Then add your product or service, such as…getting your car repaired, choosing a financial planner, starting a home based business, getting married (more like 30 mistake to avoid…).

b.      Send out the e-book to your list with a value of $29.00 to $79.00 with an offer at the end!

The key is that with any product or service you offer, make sure it includes bonuses and a high perceived value, that is much better than giving a big price discount. If you have to give a price discount, choose a lower one and give more bonuses to have a higher perceived value!

The number one purpose of any business is to make a profit! It is not to higher employees, have gross revenue, have sales….it is to make a profit! You may need employees, and you must know all your numbers, but at the end of the day, if no profit, no business!