Your peers in business simply tell you to “charge more” if you feel you deserve more money to pay the bills. There’s just one problem. You can’t just charge more and expect all of your customers to go with it – especially if you have a fair number of competitors.
Nonetheless, you should charge more and more, especially as inflation continues to get worse. How can you “get away” with charging more and continue to keep your customers paying and satisfied?
Build a Brand
Even if you run a one-man shop serving a tiny niche market, it works the same way in every sector and for any business. A great brand will always allow you to charge more.
You go to the grocery store and select a bottle of wine/liquor for your big party. How do you choose what you want? Do you really go off of what will taste the best for what you spend?
Don’t lie to yourself. You choose entirely based on the brand and how good/bad of experiences you have had with it. The subtle differences in the product itself may carry a little weight, but usually don’t serve as the determining factor if you’re being completely honest.
However, people will make their selection on what product/service to buy based on pricing if they don’t perceive a particular brand as better.
Let me share one tip to make your brand exciting and valuable – tell stories.
Does your website or marketing collateral share a story that relates your ideal customer to your company? Or does it simply list out your products/services and where to get them?
A compelling story surrounding your products will allow you to charge more automatically. People value great stories and experiences just as much as they value what you actually sell.
What do I mean by this one? Well, if you have an abundance of a certain product/service, it automatically becomes less valuable. However, if only a select handful of people can buy what you have, it drives the price up.
Become a “more exclusive” seller by following this framework:
Decrease your target audience size: Go for the potential customers who perfectly “fit the bill” for your product. You’ll save on marketing and exclude people who wouldn’t have bought anyway.
Produce a limited quantity: How many people need to buy your product for you to turn a solid profit? Target and charge accordingly, then don’t be afraid to sell out of what you offer. If someone really wants what you have, they will wait until the next release.
Limit your product lines: A “jack of all trades” may sell a diverse range of products, but do they make more money as a result? Probably not. Do they save time and money doing so? Definitely not. Master a few core products/services and make them amazing.
The last point flows perfectly into this one.
If you listen to your consumers and genuinely understand their requirements, you can add significant value to your core products simply by repackaging them with value-adds.
When you sell something for a high price, you have to go above and above in terms of customer service and the bells/whistles.
Do you have some of the below things in place?
- 100% money-back guarantee
- Free shipping
- Free onboarding
- 1 year of free support
Freebies like these will calm your customers’ nerves and encourage them to spend the extra money.
If you have physical retail locations, ensure that your employees are adequately educated to communicate these ideas to customers. If you sell online, make sure you slap your guarantees onto everything.
It will take some work and the implementation of some systems to take action on these three things. However, the price increases you can charge as a result will more than make up for it. You’ll also feel good knowing you didn’t just raise your prices for no reason.