When you run a business, sometimes it feels like the Wild West. You struggle to figure out right and wrong, you see others getting away with murder, and some days you’d kill for the manual on “How to Price My Business Right.”
Please someone just tell me how to do this!
~ You, me, and every other entrepreneur when starting out
The key point here — you may be stopping yourself from being worth premium rates simply by refusing to charge premium rates!
Here’s what three marketing and consulting experts have to say about realizing your value by increasing your rates:
1. “By Charging Premium Prices, You Can Offer Premium Service.”
~ Jon Morrow (boostblogtraffic.com)
It can be hard to get used to charging higher prices because you may not feel like you can justify it. There are a thousand little voices telling you “turn back,” “not yet,” “don’t you feel silly just looking at that number.” But the thing is, you can’t force a person who simply can’t afford it to pay your premium fees; unless you’ve got some mafia style shakedown stuff going on, in which case your day will come when the police come knocking. In that case you’ll know you were doing it wrong.
For the rest of us… Only those who can pay your premium fees will pay. For them, you need to give yourself the flexibility and leeway to provide premium quality service. The only way to do that is premium rates.
You can even sit down and dream up a service you’d like to provide — then work out how much it should cost (and how many customers you’ll need) to free up your time and resources for it to be a reality (more on this in #3, from Sean D’Souza of Psychotactics.com).
2. “Demand for our services actually INCREASED! I couldn’t believe it…”
~ Brent Weaver (ugurus.com)
Prefacing this quote about when he raised his agency’s rates to $100+ per hour, Mr. Weaver says:
Amazingly, we lost NO customers and people started taking us WAY more seriously. In turn, we began to take ourselves more seriously too.
Something we’re all aware of, but sometimes forget once we’re on the other side of the transaction — if everyone wanted the cheapest deal, we’d all be driving around in an ’87 Toyota Tercel (the car I stylishly rode my whole college career).
Not the case. Rather, we tend to desire the more expensive item. The iPhone ‘s’ model, the fridge with the special freezer feature that freezes meat in such a way that you can still cut it, the limited sparkling red paint for your newly-bought used ’87 Tercel.
And remember — the human brain is great at finding ways to justify purchases we’ve made! We want to believe we made the right choice. We want to appreciate what we’ve spent our money on.
When clients or customers pay your premium rates, they value and appreciate what you’ve done more. This makes both your job and your lifestyle easier.
I’ve saved the most interesting for last!
3.”Start up something that doesn’t exist.“
~ Sean D’Souza (psychotacticts.com)
In 2006, we started up the Protégé. It didn’t exist.
We put a price of $6500 on it. […] We tried to sell the heck out of it, and yet it wasn’t something we were depending on.
We surprised ourselves.
The Protégé program was oversubscribed in 2006, 2007, 2008. […] But think about it. It started off as a dream that could fail. […] And yet it succeeded.
This quote pretty much stands on its own. This is one of the most exciting things I’ve ever read. The message is beautiful. Sit down and work out a plan for how to serve people using your knowledge and skills, dream up what it could be, set a price that will allow you to make it happen, try to sell it.
If you fail, then something that never existed continues to not exist. You’ll learn a Hell of a lot in the process.
You have to check out the article on psychotactics.com, “The Science of Undervaluing Yourself (And How To Overcome It)“.
I hope this gave you some confidence and some ideas. If what you read excited you in the slightest — head to your favorite cafe and start sketching or writing down ideas!