IS YOUR PRICE RIGHT?

People will only pay the perceived value for what something is worth. It’s as simple as that. If you want to charge a higher price, add more value.

When someone says “your price is too high”, they are telling you that the value you are offering (or your reputation) is not worth the price you are asking. Most will just drop their pricing, but the intelligent play is to add more value and be so good that people can’t stop talking about what you did for them.

Before the internet, if you wanted someone to buy from you, your work had to be so good that word of mouth drove potential customers to you. You had to be exceptional. The internet changed that, and all you needed to do was fill your sales funnel with algorithm-driven leads and you could be mediocre and still make a lot of money. Now, with shrinking attention spans and increasing ad costs, we are moving back to clearly defining our value.

When everything is equal, the perceived commodity demands the cheapest option. If you gain a customer on a lower price, you will quickly lose them when someone cheaper comes along. This set off a downward race to the bottom that you don’t want to win.

How to Raise Prices Without Losing Clients

To exit the downward spiral of lower pricing, add value.  Here are a few ways you can do it:

  • Add more convenience
  • Specialize for a specific target market (really get to know them)
  • Offer specialized knowledge (and share it freely)
  • Add a few extras and no cost
  • Tap into the “luxury” mindset and build your marketing story around a higher price
  • Reduce potential risks with warranties, after sales support and a proven track record
  • Differentiate with a unique process, system or specialization
  • Strengthen your reputation (“being the best, not the cheapest”)
  • Using social proof (5-star ratings, testimonials, before & after examples)
  • Be willing to walk away if they don’t accept your price

This is by no means an exhaustive list. There are many ways to add value. Some you can add immediately; others will take time to develop. The key is to strive to deliver excellence and always look for ways to improve. If you want help building a premium-value business, let’s talk. 

Rick Wickizer is a trained and ICF credentialed business coach and a successful entrepreneur. Rick has served the building industry for over 30 years and is dedicated to adding value to all he works with. For information about coaching services provided by Rick, go to: rickwickizer.com

 

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