This week, I’m going to show you how to get to the top of your field by employing a controversial principle – offering high prices for your services.
I understand it might seem counter-intuitive, but once you’ve accepted and implemented it properly, I guarantee you that it’s extremely effective and will give you a significant boost to your income.
However, increasing your prices will help your business in more ways than just by boosting your bottom line. In this article, I’m going to share with you some of the most important ways it’s revolutionised my businesses.
Ask yourself this question:
Why are you willing to spend thousands of dollars on a watch, bag, or car when there are so many cheaper options?
Behind your choice lies one very simple reason: you’re convinced that this price indicates quality.
Displaying a higher price is the best shortcut to increasing the value of a product. So, if this applies to a tangible product, there’s no reason it can’t apply to a service, too. As a service provider, you must send the same signal, that premium price = premium quality.
If a premium price means better quality, the opposite is also true: quality = high value! By charging higher prices, it is your expertise and the results you deliver that you position.
How much is it worth? How much are your years of experience worth? How much are your concepts and methodology worth? Do not discount your services, because it’s your expertise that you’re selling off, and by doing this, you risk losing credibility and appeal.
You can't be the best and the cheapest. If you have strong positioning and deliver great results, it’s OK to charge more than your competitors.
Let’s be honest - who has never experienced a lack of involvement and a lack of motivation due to an unprofitable mandate?
Profitability acts as a powerful engine, a fuel for professional commitment to your customers. By performing well, you exceed your initial objectives and satisfy your client’s requirements. Therefore, they see the value in the quality you’ve provided, and will not question the prices presented.
No matter how comfortable you may be with offering prices that are higher than those of your competitors, there is always a doubt that your customers will suddenly be tempted by a lower price.
This isn’t a bad thing, because it encourages you to be better. The profitability of your higher prices needs to be consistent in order to be sustainable, and in order to achieve this, you need to ensure you’re constantly offering higher-value than your more affordable competitors.
Your customers' attitude will also be very different if you choose to charge high prices. Take the counter-example: customers who turn to you because you are the cheapest in the market will demand more from you, before leaving you as soon as one of your competitors displays more attractive prices than yours.
By charging high prices, you position yourself as an expert, the best in your field (see point 2), and thus attract customers who value an exclusive service and a great customer experience. As long as you make them feel special, this type of clientele will demonstrate loyalty, understanding and gratitude.
By charging low prices, you send a signal of weakness and will more often be treated as an employee rather than a recognised expert. On the other hand, by increasing your prices, customers will treat you with respect.
The same goes for your competitors. The higher you go up the value scale, the more interesting the competition will become, as they’re detached from the toxic price war climate where everyone tries to be the cheapest on the market.
If a higher price = higher quality, the notion of exclusivity can be added to the equation. By paying more, the customer feels that they are distinguishing themselves by offering them a different service – perceived as rare and unique because of its price.
In this way, you’ll become more attractive, both for prospects who can afford your services, and for other professionals who want to align themselves with you, but don’t necessarily have the means to do so. With this new and exclusive reputation, you’ll also attract quality partners who want to connect with people of "the same rank".
To what extent can you increase your prices while remaining in demand?
Try to define the proper increase in your prices that will allow you to grow even more and allow you to impose yourself as an expert in your sector.
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