Are You High?

November 29, 2012

Are Your Prices High Enough?

Are you high? Probably not.

I’m referring to your prices, and in fact they are probably not high enough. Think about it: Do all of your clients think you are the world’s greatest? Great. Do they all but throw their adorable Scooby Doo checks at you with a smile? If so, you’re doing it wrong. Sure, you want to make your clients happy, but if no one other than Frugal Frank has muttered a complaint about your prices being too high, then there is a good chance you are under-pricing yourself and your business. Stop it.

I completely understand the anxiety associated with increasing your prices, and even the involuntary flood of questions like, “How do I know what to charge?” and, “What if they won’t pay it?” Questions are good. The only way to find the answer, though, is to just do it. The fact that you are thinking about whether or not to raise the price means you probably should, and not a single one of your clients is going to tell you that they would just love to pay double for your product/service, even if they would do it.

Some industries have it easier than others and can play around with price changes with the click of a button. These lucky ones can increase their price again and again until the conversion rate plateaus. Others may need to do a bit more research before taking the plunge. If this is you, take a look at competitors prices (as I am sure you have), and find out what unique value your product offers. Then you, too, can increase your price to all customers; you can also segment the market, go into that group with a higher price, and gauge the response.

Basically, you want your time/product/service to be seen as a high value product, not something that belongs on the “Value Menu” of your industry. People automatically assume that more expensive equals better, whether they like to admit it or not. We have been trained to think this way. In fact, I decided to write this post when I encountered this phenomenon myself: I recently settled in for a Happy Hour and asked the server which cabernet she recommended off of the menu. She replied, “Well, [insert lengthy wine name here] is more expensive normally, so I’m sure it is better.” It wasn’t. The point is, I bought into the logic, and your clients will too. You are not a “Value Menu” business and your prices shouldn’t project that. Provide good, quality products/services, price accordingly, and if your clients don’t already see the value you are presenting them, they will.

Categories: Blog