Taking advice about pricing from a guy sitting in his kitchen wearing a Mickey Mouse hat!
<Watch the video…or scroll below to read the transcript>
Hey, I’m Rob Anspach, you know, I get the question of pricing constantly from people wondering when and why they should raise their prices. Now you might not be taking me seriously because, yeah I am sitting in my kitchen wearing a Mickey Mouse Hat. But this is how I think! Okay?
And, the whole thinking behind pricing is something you need to do every single day. Now, if you’re in the mindset, “Oh, but my competition doesn’t charge that much so I shouldn’t charge that much either.” That is the mentality that will get you broke really quickly. If you base your pricing on what others are doing then honestly you don’t have a business you have a copycat. And, there’s a lot of businesses out there that are copying each other day in and day out. “Oh, well he charged this, so I’ll charge that, or I’ll charge a penny less!”
You have no idea what his cost of doing business is! You have no idea what his cost of running ads is (his ad expenses). You have no idea what his equipment expense is, or anything. You’re just guessing! You have to honestly look at your own expenses. What does it take you to make or produce your product? Do you need a $100 an hour, $200 an hour to cover your costs, do you need more, do you need less? That is entirely the decision you to have with an accountant and then you’ll find out exactly…”oh well, you know what, yay, he’s out of his freaking mind if he’s going to charge that small amount, I can’t copy that!”
And then, when you realize that your prices need to be higher because you deliver greater value, that you have more experience, that people trust you better, then you can take your prices up 30, 40, 50% higher. Because honestly, running a business is about making money. If you don’t want to make money why don’t you run a charity? Honestly they still need to make money to pay their overhead. So, advice from the guy sitting here in his kitchen wearing a baseball cap…raise your prices. And raise them now.
Don’t look back on where your prices were, don’t say well I’m going to offend my customers if I raise them too high or that the market wont dictate that I raised my prices, just do it! Because if people trust you, if people like you, if people value what you’re doing, price is not an option. Yes, people may say, “Hey, how much do you charge?” They do that because they don’t know what else to ask. Take price off the table, deliver value, deliver trust, deliver authority and credibility. Those will outperform price day in and day out.
Hey this is Rob Anspach here in my kitchen wearing my baseball hat, I hope you found this helpful. Please leave a comment and tell me how you raised your prices and how long it took you before you finally did so.