No, not price gouging, done to death.
The moral thing to do is raise prices to keep one person from cleaning you out.
If you raise too high, you wonâ€™t sell.
If you sell, itâ€™s because the market set your price.
What Iâ€™m gonna be talking about this week is raising your prices, outside of a crisis level event.
Iâ€™m gonna give a bunch of reasons why I think you’re charging too little, and some reasons why you should raise your prices today.
Start with a story.
So About a year back, I started doing one hour consults at 50 to 75 an hour.
I did this for about a year, and Kevin Geary told me that was way too much.
He said double.
I worried if I doubled, Iâ€™d lose half my work, the opposite happened.
Then, last month, he said to do it again.
so now my prices are 250 an hour, and I still havenâ€™t seen a dip in demand.
So, the lesson here, most price resistance is in the mind of the seller, not the buyer.
If thatâ€™s holding you up, put it to rest, as long as what you deliver is perceived as more valuable than what you ask for, youâ€™re good.
That brings up the first point.
If youâ€™re not able to deliver something more valuable, itâ€™s probably because youâ€™re not charging enough, to begin with.
Delayed delivery, sup par packaging, less than perfect product, usually stems from not charging enough.
Hereâ€™s how most people price, and itâ€™s all wrong.
The tally up the cost of all the materials, they estimate the time it will take, they give themselves an hourly rate for that time, then they add that together and bashfully put that as their price tag.
First of all, what about taxes?
What about chargebacks and unexpected expenses?
What about theft and clients that make you chase them down for payment?
How much is that time and frustration costing you?
and are you adding that into your price?
Next, let’s talk about perceived value when it comes to scarcity and abundance.
We place less perceived value on things which are abundant.
We place more value on things which are scarce.
Itâ€™s why collector’s items are so valuable. Itâ€™s why dollars devalue from inflation.
You see your skill as abundant, thus place less perceived value on it.
Your client sees it as rare, thus placing more perceived value on it.
You need to price off of the value they perceive, not the value you perceive.
Next is another type of perceived value.
People correlate inexpensive with cheap.
If your price is too low, theyâ€™ll assume youâ€™re low quality.
If your price is higher, theyâ€™ll assume higher quality, and have fewer doubts about the purchase.
Lastly, low price attracts the worst kind of people.
Price shopper always have the most complaints and often feel the most entitled.
Not only that, there is no loyalty with them.
As soon as someone else goes lower, youâ€™ve lost a customer.
You never want to compete on price because thereâ€™s always someone out there willing to go out of business faster than you.
So, what to do?
Raise your prices, today.
you donâ€™t have to double them, but you might wanna try it.
If you lose some buyers, they werenâ€™t the ones you should be giving your time to anyways.
It will give you more time and money to do a better job for the ones that stick around.
Maybe start with five percent, turn that extra money into extra value, and raise another 5%.
Do that until people start saying no, which might never happen.
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