It’s normal and enticing to think that lower prices can draw more customers, give your customers better value and make your customers happier. But what if you really did not serve your clients by charging what you really are worth?
As a marketing coach, I advise my customer every day about the best way to position themselves and bundle their services, so that both themselves and their customers can be as valuable as possible. “There are no benefits to being the second lowest price,” says business trainer Dan Kennedy. You might want to consider being the highest if you’re not the lowest cost provider on your market.
My customers usually provide services from hourly coaching or consultation to sales of packages and service to customers using a one-to-one model of training. The prices vary between $2,500 and $7,000 per customer. They convert what was once a $400-1000 customer into a $4000 customer and reduce time spent per customer. This is 5-10 times more because you work less and you get better results for your customers.
The same technique can be seen in a number of industries. Here is why today, no matter what business you are in, you should consider raising your rates.
Higher rates attract better customers
You would be treated as such by clients or consumers who only want to buy from you because you are the cheapest supplier. These customers at the “bottom of the barrel” demand the world from you, blame you for all their problems, and make you a competitor in your heartbeat.
“In our experience, business is the most enjoyable (and profitable) to help great people improve.” – Sethi Ramit
You will draw customers who appreciate your exclusive offer when you turn to premium rates and position yourself as the better. These types of customers prefer to take responsibility and have fair expectations about what you or your work together can accomplish. They are more likely to remain loyal, rather than leave it as it appears for the lowest cost alternative.
In short, work for them is simpler, easier to please and they pay a great deal more. You know that the old statement, “You get what you pay for,” is valid and you are able to invest in quality and do it correctly rather than find the lowest price.
Your customers will appreciate what you have to sell.
When you start working with your customers and demonstrate your readiness to do everything to sell your products including price reductions, then you show your customers that you are a recruitment agency and that they manage the relationship. As a consequence, you are mostly regarded as an employee and not as a trusted expert.
When you charge high rates, provide precise and specified services, and show a reluctance to estimate what is worth, you will be regarded in your market as a valued authority.
By establishing exclusivity and staying out of reach of the lower-end consumers, you really change the way your customers see you. You may specify the terms of the contract and determine precisely what benefit you offer regardless of what the customer asks for. This means you are much less dispersed, much more concentrated and your customer will treat you with respect.
A violinist stood outside the Washington DC underground structure earlier this year and performed six classical pieces. He played on a violin made in 1713, which cost him $3.5 million. More than 1,000 people have gone to work. Joshua Bell, the violinist, performed for 45 minutes. Just six people stopped listening at that period. Around 20 people gave him money and kept going. He raised a total of $32.
There was no cheering when he finished playing. There was no acknowledgement. None of the passers-by knew this, but Bell is one of the world’s greatest musicians and demands over $1000 a minute to play his music. Two days prior to the subway, Bell sold out at a Boston theatre where the seats averaged $100.
Now, the average underground consumer wouldn’t necessarily be a fan of classical music, but one thing is obvious – people watch out for what they have paid.
The customers will achieve better outcomes.
Your customers are more invested in achieving results if you charge higher prices. When you sell education or training, low prices will make your customers abandon the first sign of opposition, challenge, or struggle. If your client pays $5,000 to work with you, they can stay on the process long enough to achieve results, even if it means trying and failing several times before you get right.
Have you ever wondered what if college were free? The Massive Open Online Courses are free (MOOC). Ivy League schools such as Stanford and Harvard and Columbia are offering free online courses. The overall completion rate is below 7%. The overall Harvard graduation rate for paid students is 97.5%.
If you have a low rate of performance with your customers and do not think it is your product or operation, try to increase your prices.
Better service can be offered.
If you want to make $100 thousand, you might sell a product of 100 dollars to 1000 people or you can sell a product of 10 thousand dollars to 10 people. The first approach is not to have a real partnership or to provide your customers with quality service. You cannot meet the individual needs of and customers to ensure that they get the results they have paid for.
The second choice allows you the freedom to spend time ensuring that and individual needs of your customers is met, their particular problems are solved and that the best possible result is achieved through the cooperation.
Think about one of today’s famous workout videos compared to an individual trainer. Which one do you believe would give the buyer better results? There is certainly the occasional self-motivated person who loves workout videos over all else and works out every day, but watching someone cry in your face when you don’t want to make that collection of burpees would improve the chance of success.
Also Read: Getting The Salary You Deserve