One of the worst pieces of advice you can ever listen to is: raise your prices if you want to be more profitable. Why? Because it's grossly incomplete.
In this blog post, I want to share specific actionable things you can do to raise your prices by 300% or more (also referred to as being a premium provider). Besides the obvious benefit of being more profitable, charging premium prices also enables you to grow faster and, counter intuitively, attract better clients. From a lifestyle perspective, you can also hit six figures or higher with only a handful of clients and with very little staff and infrastructure (goodbye complex sales funnels).
I have applied this approach for myself and my clients in multiple markets including markets that are notoriously price sensitive. It works best if you're in a position to be able to set your own prices / fees.
Becoming a premium provider requires you to implement 2 key things:
- Identifying one or more affluent markets that can pay you premium dollars (as the old saying goes: “You call sell Mercedes to broke people but good luck.”)
- Focusing on communicating accelerated results. What do I mean by this? Affluent buyers are not interested in education since they tend to be fairly educated already, and they are extremely busy. This means they don’t want to hear about many DVDs or manuals are in your home study course or how many years of experience you have. Since the #1 thing they value is their time, you have to be able to communicate how you can help them quickly get the results they want with your help.
Here are some real-world examples that will show these principles in action.
Marty is a fit 50-year old who was a spokesperson for a weight loss company (he lost 75 pounds under some very challenging circumstances). He was approached constantly after each public appearance on how he did it. Finding that he wanted a more active role, he decided to launch his own business. Because he had no track record, he felt he needed to start at the bottom and coach people for free. As you can imagine, his results was abysmal because these folks never committed to what he was coaching them on. After he became my client, I recommended that he narrowed his target market to male business owners and executives between 45 and 55.
Why this target market? Marty is a male business owner so there’s affinity and people in that age range tend to be more affluent vs. people in the 20s or 30s (a much, much more crowded market and much more commoditized).
To summarize: in less than 45 days of working together, Marty has sold his 1st client at $800 and his highest sale has been $4,000 so far (my goal is to get him up to $10,000 per client). He's even landed a world-famous heart surgeon in Italy (!) as a client (Marty lives in Chicago). His big promise is he can help his clients quickly get in the best shape on their life mentally and physically, not how to get six-pack abs (that appeals more to a younger audience).
As a second example, Angela helps folks release destructive habits that lead to overstress (this refers to when you're so stressed that your physical and mental facilities start breaking down). Until now, she has referred to herself as a stress management expert, which immediately caps her financial results. Instead, I have repositioned her as a peak performance specialist.
With that in mind, she is initially targeting female business owners and executives, and she’s also raised her fees by over 1,000% (with her target market, having stress is sometimes worn as a badge of honor hence the repositioning to a peak performance specialist).
Finally, she has connections to very high net worth families. In this case, she has to raise her fees just to be credible to this target market (as I advised her, if they're paying you the same as their maids, it's unlikely they will take you seriously).
Prior to working together, she was spending months trying to figure out how to sell a $47 product and implementing a maze to upsell the buyers into a $297 product. Instead, we have set all that aside and focus on attracting premium clients that can pay her thousands of dollars per sale (with the high net worth families, the goal is to charge 5 figures or more per sale).
So here's the game plan for you to raise your prices / fees by 300% or more almost overnight:
- Identify one or more affluent markets that can afford to pay premium dollars (in most cases, this is usually a subset of your existing list – In other cases, you may have to go to an adjacent market).
- Communicate your benefits in terms of accelerated results vs. how much "stuff" is in your solution.
By applying these 2 simple principles, you can pass on marginal buyers and focus on premium buyers instead. You can also save weeks and months of your life from having to come up with a gigantic upsell maze that usually cost a fortune to implement.
