Having worked with thousands of business owners over the years it’s my experience that almost every SME business sells themselves and their products way to cheaply.
Raising your prices and selling more expensive products and services to the higher end of the market is one of the fastest, easiest and cheapest ways to increase your profits.
The fact is this … less than 20% of the population make their buying decisions based on price alone, so to most of your customers price is not the main issue in a transaction (even if they say it is.)
Sometimes a low price is even scary … I mean, would you pay £20 for laser eye surgery? How about eating at a Chinese restaurant for £1? Would you buy a car for £200 and expect it to be any good? Would you risk it?
As with most things the 80/20 rule applies. If you sell most of your goods or services for £100, then there is likely be 20% of your customers who would be willing to spend, say £400 or £500, if you gave them the option to.
What’s more, of that 20% who would happily pay more if you gave them the option, some will even be prepared to pay substantially more if you gave them the opportunity to, and believe it or not it’s much easier to sell one item at £10,000 than it is to sell a hundred items at £100 if you are targeting the right people.
The trouble is, if you don’t ask your prospects if they want to spend more, then the chances of them offering you this huge bounty is close to zero, so why not create a deluxe offering? This will cost you little to offer but you can command a much higher price for it.
You never know … some people may actually go for it. Ker-ching!
