A common-sense pricing formula anyone can use, but… few will.
Today I’m going to show you a formula you can use, that makes increasing your prices a no-brainer.
In fact, this makes things so easy, if you’re the daring sort, you may go out and increase your prices by 50% or more, immediately. And the good thing is, in many cases, doing this allows you to work less.
Here’s the deal. An early lesson I learned from one of the people who brought me up in this business, was that we’re all in the numbers business first, and the marketing business, second.
This is why, for example, if your numbers are bad to begin with, good marketing can’t help you.
So for instance, if you’re selling a ten-dollar item and you make 3 dollars on it, and you have nothing else to sell… well, no matter how good your marketing is, it’s going to be pretty difficult to get rich in this particular business.
But assuming this isn’t your problem, let’s take a look at a formula you should consider before you do anything else with your prices.
Most people are concerned that when they increase their prices, they’re going to lose customers.
And reality is, sometimes you will lose customers. But how many customers can you afford to lose?
Chances are, you can afford to lose a lot more than you think.
For instance, if you increased your prices by 50%, you could lose up to one-third of your customers, and you still wouldn’t take a haircut on compensation.
So say you’re making $400 dollars per customer and you had 42 customers. That’s $16,800 in total business, right? Well, if you increased your prices by 50%, to $600, that means you can lose 14 customers and you’d still be making that same $16,800. ($600 x 28 customers = $16,800)
Increasing your prices by 50% means you can lose up to 33% of your customer base, and you still wouldn’t be losing money. In fact, you’d be working one-third less and earning the exact same amount of money. Which is a good thing, right?
Say you increased your prices by 100% – bumping your prices up to $800 means you can lose up to HALF your customers and still be making the same thing. ($800 x 21 customers = $16,800)
Now that’s REALLY cool, isn’t it?
See, increasing prices using this formula makes your decision to do this (or not) much easier, doesn’t it?
Simply back into how many customers you’d need to make the current amount of money you’re making, with your new, higher price, and then make your decisions accordingly.
Now remember, a lot of your decision-making about increasing your prices, has a lot to do with what we talked about yesterday — whether or not you make the lion’s share of your profit on the front-end or on the back-end.
So think things through, and make sure you’re not raising prices up-front, only to lose customers on the back-end.
But no matter what you do, just… do something.
Now go sell something, Craig Garber
P.S. Raise prices all you want — when you can use emotionally compelling sales copy to get your prospects to say “Yes!,” you are in total control. See it at http://www.kingofcopy.com/seductive
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