Business owners are facing one of the hardest economic times, amidst rising inflation, currency devaluation and decreasing purchasing power. The cost price of yesterday is not the same price of today and most likely not the price of tomorrow. Owing to this, many business owners are barely making profits.
They are only struggling to preserve their business capital. While this seems like a more ‘understanding’ time to increase the selling price to make a profit, there is a fear that some existing customers may go and some new ones may never come.
If you listen to your fears long enough, your prices may stay the same or keep going lower. However, evaluating the current market condition is not a sufficient reason to raise your price. Increasing the price of your product or services is a tough business decision that should be done strategically.
- Evaluate your value
After weighing the content of the books and training that many of the big names I admire versus the depth of the value I offer in my books and training, I began to know my worth. I knew it was time to raise my price. Increased value equals increased pricing.
Money is the measure of value and the conviction of the value of the service stems from you, the provider. You are the first person you have to convince of your value, not your customer. If you have all it takes to help someone from point A to Point B, don’t be afraid to charge your worth. Your price is never too high if the value you are offering is higher.
2. Evaluate your mindset
During the first closed-door training I facilitated for CEOs and startup founders in Abuja, I shivered as I mentioned the price of my books. I sold my books to them in dollars (naira equivalent). But to my amazement, all copies of my books were bought. This was the boost I needed to tell poverty that ‘the battle is over.’
Pricing is psychological. You charge what you believe you deserve. Poverty has a powerful way of affecting your mindset negatively to harass you that you don’t deserve more. It places a benchmark price in your mind and it reminds you that “nobody will ever pay you beyond this amount.”
As you begin to step out of poverty, some amount may sound too big to mention. You may be tempted to charge a customer based on your circumstance or background, rather than the economic value you offer.
Where you deserve to charge in millions, poverty will suppress your mind and mouth to charge in thousands. Poverty breeds fear and steals your confidence. Poverty is too dangerous; it makes you appear beggarly, even when you deserve to be paid honourably. Stop charging what poverty makes you feel people can afford.
3. Evaluate your positioning
I struggled to put a price on my books because I was selling like an average author. The breakthrough started happening when I began to delve deeper into solving real business problems as a Consultant. I shifted people’s perspectives from “you are buying a book written by an author” to “you are buying a book written by a Business Consultant.”
This move alone increased the price of my books and service 10 times. Position yourself as an expert and people will pay you like an expert. Charge what your expertise and impact deserve!
4. Evaluate your brand
I attended an event where a popular Investment Coach facilitated a training. Even though all he said was the usual ‘aspire to perspire,’ his books were quite expensive, yet participants rushed to get autographed copies. Although the investment book was full of motivational quotes, he still sold more copies. One thing was obvious; his branding was top-notch.
I decided to work more on my brand identity and brand perception. Building a brand is expensive and continuous. I hired a Brand Strategist. I was featured in television and newspaper publications. I attended high-level events. I acquired more reputable certifications. I shared evidence-based thoughts as an expert in the industry.
With all these, anyone who wants to hire me presumes that I am not cheap. When my profile is being read in any event, participants already have a clue that this Consultant is not cheap. Till date, I am not afraid to invest in my brand. You cannot go to Mai Atafo’s website and expect to buy a suit of ₦50,000. Never! Brand yourself as a professional if you want to be paid as a professional.
You cannot serve and sell to everyone. If you continue to charge lower to appear nice, you will soon be out of business. As you build your brand, you will understand that not everyone should be able to afford you. Some prices are insults to your brand. Branding sets boundaries.
5. Evaluate your results
When you know that you have a valuable product or service to offer but you don’t have the traction to convince potential customers yet, you may choose to offer your products for free or discount for some time to prove your excellence.
You may choose to start charging lower rates at the onset because you do not have the experience and credibility to convince your customers. When you have gathered enough traction and testimonials, you should stop.
As you gain more traction and testimonials, you can charge the same rates as other industry experts or even higher. Nobody doubts proof. Only those who have built confidence can charge any price with confidence.
6. Evaluate your audience
Those that are your target audience will not stress you. Your product is not expensive, your problem is that you are not selling to the right audience. Your product is not too expensive for people who can afford it.
Some products or services are built for the bottom of the pyramid and that is fine too. The same bottle of water that is sold for ₦200 during traffic at the Lagos-Ibadan Expressway is sold for ₦1,000 at Transcorp Hilton Hotel. There are local gyms for street goons and there are standard gyms for the middle class. The prices vary. Same product, different prices, different target audience.
© Kingsley Ndimele
Your Reliable Consultant