INCREASING YOUR PRICES

System Of Success

WANT TO KNOW THE SECRETS OF

INCREASING YOUR PRICES

WITHOUT LOSING YOUR CUSTOMERS?

Learn How to Sell More Products to More People at Higher Prices.

(This special report has been brought to you by Marketing Madness)

Use these simply strategies and you’ll immediately see the changes in your business.

These are simple bite-size strategies that you can put into action immediately to help you on your way to improve your marketing and increase YOUR PROFITS!

Introduction

Not surprisingly raising your prices is the fastest and cheapest way to increase profits.

But, it can also be the hardest thing to do. The perception of customers will only buy the cheapest is, in fact, a myth, most people don’t only buy on price alone, there are many other factors to be included, the most important one of all is EMOTION.

Though that does get influence on buying on price alone, you don’t want or need them anyway, they will always just cost you money in the long run. The rest of us only buy on price if you haven’t given us a good reason to. You haven’t tapped into our emotion to buy from you.

Recent surveys have shown that as low as 14% of people considers ‘price’ as an important determining factor in their buying process, but not the only factor.

The great news is that means as high as 86% of people does not consider ‘price’ as the only factor in their buying process,

It is good to keep in mind the 14% and try to accommodate them in some way so you don’t lose them completely, but your focus should be towards the 86%, these are the ones you want to spend time with and give your best offers to.

Just look at your neighbours and people around you, not everyone is walking around in the cheapest clothes, or driving the cheapest car, they don’t buy just on the price alone.

Yes, it’s great to get a bargain, or a discount, of Corse we all love a bargain and get things cheaper but that’s for another chapter.

The price is only an issue when you haven’t given your prospects a reason to pay what you are asking for. Once you grasp this you are well on your way to increasing your income.

INCREASE NOT DECREASE

The quickest and simplest way to see what response you get is to test the market by increasing your prices by as little as 10% and see what happens.

You can always drop them back down again if needed. Most people won’t even notice but you might get a few who complains or pause for a minute or two but this should not make a huge change to your business apart from an increase to your profits.

What you don’t want to do is to UNDERVALUE your own business.

Two examples of this are...

(First) Two music teachers one charging £6 per lesson and the other charging £12 per lesson, there is a big difference in price but what about the service.

At first, you might waver towards the £6 teacher as after all if you were to have a lesson once a week, you would be saving £6 per week.

However maybe the lessons are for your child, ultimately you only want the best for your child, so is it really the price that you take on their services.

What if the higher price teacher has more qualifications and experience or can offer a wider range of musical instruments and at different levels, what about they have more experience working with children, they are full time whereas the other one is part-time, doesn’t it now seem better to pay a bit more, knowing you will get a better-quality lesson for your child.

(Second) Two driving schools, one charging £20 per hour, the other £30 per hour.

Again, you may consider saving £10 per week by choosing the £20 per hour driving school.

But have you considered why the other one charges £30?

Maybe it’s because the more expensive one has a 100% successful pass test rate, it might be that they are available around most hours to be more flexible and convenient for people who work different hours, it may be that they are easier to learn from, or they drive a Merc, not a Corsa. There could be many reasons, so, now can you see that when there is a real reason to pay more for, we quite often do.

Now here’s one for the accountants out there, the average mark up for most businesses in most industries is about 35%, if you increase your prices by 10% and let’s say you lose 22% sales because of it, you will, in fact, be making the same if not more profit. So, you have about 22% margin for losses that will not affect your bottom line.

So, if you sold £1000 worth of products, making £350 profit (That’s every £1 gross income, it costs 65p to buy or to produce and sell it, leaving 35p profit on it.)

Just by adding an extra 10% mark up, that well give you an extra £100 pure profit, giving you an increase of 28.57% for no extra work. So, in the worst-case scenario, you can now afford to lose 22% of sales.

But you will find that you most likely will not lose any sales at all, as long as you offer them a reason. Less work the same profit sounds good to me.

What have you got to lose? Just try a 10% increase NOW!

THE BENEFITS NOT JUST THE FEATURES

STOP just selling stuff, people don’t just buy stuff, they only buy stuff to solve their problems, ease their pain or discomfort, something to make their lives better and more satisfying.

An example is when someone wants to buy a drill, it’s not the drill really, they want, it’s the, it’s the warm Fuzzy Feeling that you get when looking at your children’s faces in the photo on the wall, which is hanging on the hook in the hole on the wall that the drill made. We buy emotions, not features. So, remember; features only help with the sell, it doesn’t make the sale.

How much could you sell a pint of milk or a packet of aspirins for?

Well, that depends on the buyer, if they have a really bad headache, don’t you think they would pay just about anything to take that pain go away, or your screaming kids at the breakfast table without any milk. It’s all about perspective and the benefits. Paying a little more for your milk say with a milkman assures that you get it when you need it fresh every morning, the benefit of that is happy kids. Running around the corner to an all-night chemist may cost a little more but the benefits of it going straight away out-weights the features or the price every time.

The price will only become a problem when you haven’t given them a good reason for it not to be a problem. It’s the VALUE they really want. Increase the perceived value of your product or service. Be generous and give them something of greater value to them but keep in mind it should cost you very little. Your long-term customer value is where your profits are, so don’t think cheap is best, your customer doesn’t.

In Australia, there is a dentist who gives out free bikes to his child patients.

Once they have filled up a card with stamps every time they have an appointment they then receive a free bike. To the dentist, the cost of the bike is a small percentage to what all them appointments are worth to him, and how happy are the kid's parents after paying for all the appointments and the kids must love going to the dentist. See how the BENEFITS outweighs the cost.

RISK MANAGEMENT

When you ask someone to part with their money to purchase anything, it involves some kind of risk to your customer, so it would be much more beneficial to you, if you took that risk way by giving a guarantee, the perfect solution to overcome any price resistance.

Offering a guarantee will not only gain you respect but will increase your sales. But you might be thinking, if I give a money-back guarantee, everybody who is not honest will cheat me.

In fact, this will all most never happen, you might have to repay a few unsatisfied customers who are just generally not happy, you will ALWAYS GET THEM, but the increased business will heavily out weight the amount you may have to repay about 100/1.

Human psychology predicts that the longer the guarantee lasts the less people use them, so let’s say you get 10 returns on a one month guarantee you’ll get only get 1 or 2 on a year’s guarantee, that’s sometime because people forget but usually after a number of months, if they have not already returned they are very happy, the good news is that we are not really a nation of complainers.

Why do you think eBay or Amazon are so successful? it’s not just because they are the cheapest, in fact they not, not most of the time anyway.

It’s because of the GUARANTEE and services that they both offer, whether or not they use 1000’s of companies, eBay and Amazon Guarantees every penny so you feel safe shopping with them.

In any purchase both the buyer and the seller are at risk, the buyer risks being sold poor-quality and the seller is at risk not getting paid. The buyer has more choice of sellers to choose from, the seller on the other hand is the one asking for the buyer’s money.

So for this reason you need to revers all the risk of the sales to the seller, giving the buyer more confidence when buying from you.

Try it on something small and build it up and make it more generous, you will find the majority of people really are genuinely honest and you will see a huge increase to you sales as this is guaranteed to work.

OVERCOMING OBJECTIONS

If people are buying just on price alone, it just means you are not giving them a really good reason to buy from you at the price you are charging. It’s possible that you haven’t given them enough information they need to make that all-important decision to buy from you.

You haven’t proved that you or your service is worth the price you are asking for, you haven’t shown them the value of your product or service yet.

Some people will tell you that you can get it cheaper down the road, good luck to them.

But you should not avoid the issue, hit it head-on, in fact, bring it up first, don’t let the customer bring it up with you looking embarrassed, you should not be ashamed, you should be proud that you offer a better, more personal and professional service than your competitors. Have a BIG sign telling your customers, have it hanging both behind the counter and in the window.

Word is something like...

“Yes, our fees are more than our competitors and we are proud of it, and these are 10 reasons why you are better off doing business with us and paying our prices....”

Just think for a minute why would someone tell you that you can get it cheaper down the road, If you think of it for a bit, if they can, why are they in your shop? Why aren’t they already buying it somewhere else? It’s most likely that they can’t or don’t want to as you offer a better service and quality. What they are really saying is that they want to pay for the cheaper price but get your superior service and quality.

HAVE A PREMIUM PRICED OPTION

There’s a segment of the population mostly the wealthier customers who are relucted to spend money on products or services that appear too cheap. Not everyone shops at Lidl and Aldi, not that there’s anything wrong with them, far from it, you get great value from them both, but why do you think M&S and Waitrose are so successful, they are twice the price.

That’s because we are all different and some people are relucted to buy from places that appear cheap, they believe paying the higher price gives them better quality. This is not always true, but it is perceived to be.

Having a premium-priced product/service is a simple but effective way to really tap into your 20/80 markets. As a rule of thumb, 80% of your business comes from just 20% of your customers. So, it makes sense to enhance your product range with a higher premium price product to offer to your 20% best customers.

Only if you give them an option to spend more with you, they just might. Some companies found that just by adding one or two higher-priced products their income doubled, just by offering it.

It is so easy to do and no more time or effort implementing it, just a little imagination.

If Jake owned a bike shop, offering a range of cost-effective low budget bikes at affordable prices to cater for the lower-income population of his community, he could also offer one or two high end spec products or service to encourage the more adventurous of his customers to pay a little more than usual for a better quality product.

Or Mandy who runs a dog grooming service, if she has enough room, she could offer a dog sitting service just for her top paying customers who needs to shoot off and leave they dog in safe hand for a few hours, and she could charge a premium for this service.

Make sure you have a premium priced product/service of what you sell to other customers. Just remember, if you don’t have it they can’t buy it.

ARE YOU WORTH IT?

As children we are brought up not to be too vain or egotistical, and we should never elevate ourselves by trampling over others, we should praise others and ourselves equally.

As business owners we should have respect and praise our competitors too. We should never belittle and put down your competitors like children, give them the respect they deserve. It puts people off and mistrust them when one criticises negatively about their competitors.

However, as business owners we must have pride and become self-confidence and learn to sell yourself in full glory, as no one else will. We must have confidence not only in ourselves but our business too.

Openly acknowledge that you charge more and yes, they can get it cheaper somewhere else, but you also need to BOAST that you offer higher quality and superior service than your competitors too. You need to tell them all the great things you will do to take care of them. Your competitor may also offer a similar service, but you need to make your message louder so everyone thinks about you first.

FACE DOWN YOUR COMPETITORS AND BUILD UP YOUR CUSTOMERS?

“Don’t Compete... Create” Earl Nightingale. You don’t need to go head to head with your competitors over price. You need to make ourselves different and better from your competitors. In a price war, businesses show lack of leadership by following the crowd and slashing their prices to compete with others. In reality, but increasing your prices one way or another shows leadership and strength, it promotes confidence in your business and people like confidence and strength, it means they can trust you and see you as the leader in your industry.

FREE TRIALS

This is part of risk management same as guarantees, offering a free trial will not only gain you respect but will always increase your sales by eliminating the risk. You don’t have to give them the whole thing forever, just give them part of it or for a limited time so they can experience it and try it out. You need to get their emotions to buy it for them.

Think of how you can give your customers the experience of your business, service or product without them paying for it.

For example; If you opened a restaurant or food outlet, don’t think for a moment when you open the doors people will flock in droves, it’s not the movies.

You need to work hard marketing your outlet and getting people to try you out and the best way is to offer a free meal or samples. Nothing works best than something free and it will save you a small fortune in your marketing budget too.

Let’s say you spend £1000 on marketing and you still don’t get many people in the doors, that’s £1000 wasted. But if you gave out 100 free meals to try out your samples or meals. If only 50% of them love your food that’s an instant 50 customers plus all their recommendations to their friends and family, which could double or triple. But when that 50 all come back they are prepared to pay full price. Let’s say £35, that’s £1750, and if you add all their friend and family!??!

You could even try a 70% off or buy one get one free trial, that then will at least cover most of your costs.

It could even be a free lesson, or offer a free hour consulting, free training session, a free sample, a 20 minuet taster session, or even a free booklet on traders top secrets giving them really useful information. Use your imagination.

PAYMENT PLANS

If you can allow customers to pay instalments, you could increase sales by up to 40%. For the more expensive items, just by letting your customers pay a few easy payments, it changes the perception of the price, as they only focus on it the monthly instalments, this is a very effective strategy.

NICHE MARKETS

Taping into A niche market is a very lucrative marketing strategy.

Customers are more inclined to buy from a company who focus on their specific needs.

They feel that you are more specialist in your field and that they will get a more personal service. When looking for insurance, some of the most successful companies use niche markets, by narrowing their focus and defining their targets, they target specific types of customers and have matched their offer to that customer.

One of their brands targets younger drivers, living in cities and driving performance cars; Another brand is aimed at drivers with a no-claims bonus; Yet another brand targets women drivers; Another focuses on drivers of commercial vehicles. Most people rather speak to a company that understands their specific needs.

Being a niche company might not appeal to you, but you may want to introduce elements of your business to cater to a specific niche market and tap into this lucrative market.

An example of this would be a financial advisor offering a number of services; Mortgages, Insurance, Pensions & Retirement Incomes, Saving, and Wills.

It would make much more business scenes to separate them into specific niches, rather have one website offering all of the above, as a jack of all trades have them all with separate websites and maybe with different names too.

So if someone is looking for pensions, then they will think you specialize in pensions, or if they are looking for wills, then they will think you specialize in wills. This could dramatically increase your customer base as they look to you as an expert on that specific niche market.

BUNDLING

Offering packages can increase the perceived value of your items, so you could charge more by adding in more products or services to an already good value product or service.

Let’s say you are selling mattress for £65, you make £20 profit on them. You could add a sheet, quilt, and pillows and offer it for a higher price, they may only cost you a few pounds to buy in bulk at trade prices, let’s say £5 for the sheet £5 for the pillows and £15 for the quilts, that’s £25, you could sell them for an extra £50 on top of the £65, that’s £115, you make an extra £25 profit for doing nothing more than offering them a package, but to the customer they see the value of the package and buy.

Holiday companies do this all the time, they don’t just sell a hotel room, they offer the flight, car hire, insurance, activities and anything they can offer to make the package more valuable, a lot of the extra services don’t actually cost a lot, but to the customer its worth a lot more, so by offering packages the holiday companies makes much more money.

RESHAPING YOUR OFFERS

One of the simplest and easiest ways is to implement slight changes to your offer, either the quantity, quality or price of your offer could make significant changes to the outcome of your sales.

Let's say you are still the mattress seller selling mattresses for £65, What if you sold 2 for £120 you’ve made two sales now without doing any extra work.

What about offering a delivery service within the area, you could add £5 or £10? Or even free delivery if they ordered 2 or more mattresses! Just by changing the offer slightly could make all the difference to the customer.

ADD BONUSES & DEADLINES

With 90-95% of people that enquire or shown an interest in your business never buys, they move on, so how do we increase the percentage of people who are interested in what you offer to buy from you. So how do we convert the non-buyers to buyers?

One of the effective ways of doing that is to add bonuses to incentivize people to buy. Bonuses can work very well, just look at the American infomercials on TV, ‘BUT WAIT - THERE’S MORE!’ They are very good at making the bonuses seem to be worth more than the actual product is worth.

So add bonuses to incentivize your customers to buy.

An offer without a deadline isn’t an offer.

This is a very powerful strategy, it motivates people to act, it puts pressure on them to fill they will mist out. People want to buy but not sure if they should buy from you or not, so they will go think about it, then they may forget, or they then end up buying from your competitors because they gave them a reason to do so. So you need to give them a reason to spend their money with you and not your competitors.

As people are terrible in making decisions, especially when spending money. You need to help prompt them in making it for them, so by offering them a cut off time/date or number, you are in fact forcing them to make a decision whether or not to buy from you now, and by doing so your sales will skyrocket. You need to use deadlines because it works.

Now it’s up to you! - Wishing you every success for your business.