Money, money, money, money…mooooneeey!
Gotta love The O’Jays!
On a comical level, the funk-twang baseline always rolls into my head whenever I think about money. A lot of people say that money’s an unnecessary evil, the root of all evil, something else most likely to do with evil.
And that’s a bad way to look at it.
Money’s a catalyst. And we all need it to progress.
Granted, if you’re doing something only for the money, then you’re in business for the wrong reasons. But in order to grow and deliver a service our audience and clients deserve, to live a lifestyle that means we can dedicate time to our professional relationships and personal relationships fully, then money helps.
And your pricing is the quickest way to that goal.
The big brands do this well. Apple, Disney, Coca Cola – name any of them. But you don’t need to be a big brand to do it! You just need to make sure your brand follows a few simple things that the big guys get right.
So in this article, I’m gonna show you how your brand and your pricing relate to each other. And some great tips you can start acting on right away that will allow you to increase your prices (without your potential clients having a moan!)
A lot of startup business owners, freelancers and fledgling entrepreneurs start off with a price for their products and services. Usually way below what they should be charging for them.
There are a couple of reasons for this – first, they don’t have the confidence just yet in what they do to charge more. Second, they don’t get their base costs right. And third, they don’t project forward to an income goal.
And what happens when we set our prices too low?
We end up having to take on more work or sell more products just to get by.
We run the risk of cash flow issues.
We scrape along breaking even (or worse)
And we also devalue what we offer, and people won’t trust your ability to help them.
At some point, you’ll realise that you’re not charging enough. That you should be earning more per product/service sold.
So you raise your prices.
And one of two things will probably happen. You’ll see a drop off in sales. You’ll start being subjected to the lamentable moans and groans of people that aren’t happy about it.
If you’re going to raise your prices, you also need to make sure the perceived value of your products and services matches the price you’ve set.
You need to convince your potential clients that the price is fair. That they should be more than happy to pay it.
And you know what? It doesn’t matter if you’re going from $1 to $2 or $10,000 to $20,000, the principal’s the same.
You need to justify your price.
So here’s a few tips on how you can do just that!
I know you want to help you customers at the best price possible. To give them the best deal and make them happy.
But your pricing needs to make sense for your business and your goals. If you can’t make your business profitable for your first and foremost, then you won’t be helping your customers for much longer at all. Your business won’t be sustainable.
To begin with, you need to have an idea of your running costs. What do you need to make to break even per month, quarter, year?
Now you know what you can’t go below.
From here, most people will start the fine balancing act of certain price levels with potential customer numbers – “if I charge $200 for each product and get 10 customers each month…” and so on and so forth.
Don’t bother with that. It’ll drive you insane, and you’ll spend most of your time worrying about if’s and maybe’s.
Ironically, focusing on price is looking at it backwards!
Instead, I want you to set a goal of how much you’d like to make per customer. Then turn your efforts into building a product/service that delivers at that price point.
The price you set is actually irrelevant. There will be people out there that are willing to pay anything. You just need to be able to provide enough value to match what you charge.
Price doesn’t matter. Value does.
If you want to make $2000 per customer, then create something that delivers $2000 (or more!) of value to them.
As long as your pricing is sustainable for your business, then whatever you charge on top of that is entirely down to you and your ability to provide that level of value.
Everything in branding (and business) comes down to this.
Knowing what your clients want, why they want it and how they want it is the true key to success.
You can only sell something that people want. Notice I didn’t say ‘need’ here. Wants and needs are two totally different things. We all need things in our lives, but if we don’t want them, then we won’t try and get them.
The amount someone is willing to pay for something is based on their level of desire for it. So you need to make sure giving them what they want, in the way that they want it and when they want it.
Not an easy feat!
Know exactly what your audience wants. Not what you think they want. What result are they really after? Remember that people don’t buy products or services – they buy a result. An image. A lifestyle.
Use all of that knowledge to build your products, services and messaging. Create and deliver value.
So, it’s one thing delivering actual value in your products and services to justify the price you charge, but it’s a wholly different kettle of fish delivering perceived value.
It’s that whole chicken and egg scenario. How do people know that your offerings deliver great value if they haven’t used them yet?
This is where your brand identity, design and messaging comes into play!
All of this must also justify the price you charge. I would argue even more so! Without it, you won’t make the sale in the first place!
So therefore pricing is all about perception. And it’s your job to influence that perception.
You need to convince people that your product or service is the right choice for them, that it’s going to deliver, that it’s going to be fully worth the entry fee.
We usually think that if we price something low, then we’ll sell more. But that’s not the case. In fact a low price point can set off alarm bells in your the minds of your potential clients. It can signal that what you offer is of low quality and it won’t be able to help them achieve their goals.
The lower the price, the less value is placed on it.
So aim to charge high and use your brand design first of all to alter their perception.
People will make a split second decision on your quality, value, trustworthiness and fit with their goals and lives. The way you present something visually has a huge impact in getting people past the first hurdle.
Your design needs to match the personality of your business and that of your audience. It needs to resonate with their wants, passions, beliefs and values. Use your colour scheme, typography, logo, imagery, graphics, music etc. to relate to them.
The more they relate to it, trust it and desire it, the more time they’ll have to understand more.
You need to be able to clearly demonstrate that you know what they want. Show them that you understand.
Visuals will entice them in. Your messaging will affect behaviour.
Use the language they use. Make it personal to them. Take them on a journey from where they are now to where they want to get to. Past their problems, past their barriers and onto their ideal goals.
It’s all in the little touches. If you can tailor something specifically to someone’s situation, they’ll place a much higher value on it.
Sales are made on relationships, not product features.
And we form relationships with those who have similar values and beliefs as our own. If someone doesn’t share your vision, they won’t buy from you.
Everything therefore stems from your story, beliefs, values and ideas. These are what build trust.
When someone trusts you, they’ll be more willing to pay what you ask.
You need to invest time and money into helping your audience trust you first. To justify your prices. Whoever spends the most time and energy acquiring a customer, wins.
Have actual conversations with people, on the phone, over email, in Facebook groups and forums etc. Understand everything about them, from them.
If you haven’t made a sale yet, it doesn’t mean your pricing’s wrong. It just means that people don’t trust you enough yet.
Have you had enough conversations with them? Have you taken them on that journey from problem to result? Have you delivered valuable help up front?
The more you build that relationship and trust before the sale, the higher you can set your prices.
Finally, think about how you’re making your audience feel. When they visit your website. When they go through your content. When they receive your emails. When they think about your business.
The happier you make someone, the more inclined they’ll be to spend.
Dopamine is a powerful force. Use it to full effect.
Find out what makes your audience happy and base your entire business model on it.
Do they want be seen as prestigious and exclusive? Do they want to travel the world and drink in everything it has to offer? Do they want help people, to keep giving? Do they just love becoming an expert in a certain topic?
People will always pay more to feel good!
Big brands do this stuff so well.
They make sure they’re profitable first so they can survive. They understand everything about their audience. They create powerful brand design and messaging that appeals to their audience and entices them in with promises of quality, experience and change.
They speak to their audiences through stories, conversations. They build that trust through developing lasting, profitable relationships. And finally they make their customers feel good, so they keep coming back for more.
And in turn, they charge more because of it. Because they’ve spent time and effort building that perceived value. Because their audience won’t hesitate to pay what they ask, because they’ve been conditioned (for lack of a better term) to believe the cost is truly justified.
Like I said before, charging more isn’t a privilege of the mega corporations. Anyone can do it following these 5 principles.
Are you thinking about upping your prices? What’s been stopping you so far? How have these tips helped? Come drop by our Facebook group. I’d love to know your thoughts!