Should You Raise Your Prices?
Today’s post is by an awesome woman I met through my collaborative project with Kaira Boston, The Small Business Whisperer. Kaira and I worked on a webinar together and then I invited her to be a guest on my podcast show. You can listen to the show here. The right collaborative effort can continue to payoff even after the project is done! Shana Lynn Yao, Your Marketing Mastermind, listened to the podcast because of Kaira’s Facebook post. Shana dropped me an email and I promise we’ve probably sent 50 emails since then! Shana is this smart and very in-tune marketer whose ability to see value and purpose is mind boggling. She’s part of the reason for me tearing down my site and rebuilding it in the last 48 hours. So please enjoy Shana’s post…”Should You Raise Your Prices.” Enjoy!
Whether you have a product or service based business, your prices and how well you communicate them, affect the clients you attract, the image of your brand, and your overall income. In other words, your prices are everything.
While most people know that what determines your price is the market – this includes your competitors, economic conditions, and geography (for brick and mortar stores), few people know that what really affects your prices is your personal value.
“Value?” you might be asking?
Yes value. Your perspective on your personal value and what you know to be valuable to you, is the base level indicator of the prices you charge and the perception of the value your customer receives.
Let me explain.
YOUR PERSONAL VALUE
Value is not just about money. Value is who you are, what you offer the world, and more.
The dictionary definition is: val·ue 1. The regard that something is held to deserve; the importance, worth, or usefulness of something. 2. The material or monetary worth of something. 3. A person’s principles or standards of behavior; one’s judgment of what is important in life.
Because your personal value is tied to how you were brought up, your family and peers, your experiences in the world, and the world as it is today, there is much to be confused about when determining what real value is. Take for example in the case of money.
In ancient times, things that had value included gold and barley – actual, tangible things that were traded for value. Today, we use paper and plastic, which has no real value, to represent money. A $1 bill and a $100 bill are exactly the same – only the message on the bill is different, and this results in a wide difference in value. So when we use paper money and plastic credit cards, it’s hard for us to judge it’s real value.
Anyone that has had credit card debt knows this painful lesson all to well. But that doesn’t make it any easier to determine true value when what we see (paper and plastic representing a dollar value) is not what we get (cars, jewelry, and other material possessions).
And what about time? Time, probably tops the list of things of value, along with friends and family, and life experiences.
We all get 86,400 seconds a day. It seems like a lot, but the days just fly by. And how often have you found yourself checking your Facebook page only to emerge in a brain fog an hour later thinking, “What just happened? I was just checking my page?” Or maybe you plop down in front of the TV and three hours later wonder, “What a waste of time.”
So you can see how we, as humans, could get a distorted view of what to value. Unfortunately, that doesn’t help us define our value to better judge our prices.
HOW TO KNOW YOUR VALUE
In order to base your price on the value you offer clients, you must understand what your value is. When you know your true worth – and this includes knowing the value you provide in your product or service, knowing what your client values, understanding the value you are able to create in your client’s life – you make smarter business decisions and better pricing decisions. Your life AND your business actually become better because of it, AND you are able to impact the lives of others to a greater extent.
The most valuable thing you offer your clients are not the product or service you sell. The most valuable thing is you. So, for example, say you are a health coach and someone comes to you to help them lose weight for their big wedding day. What you do is help them lose weight with your weight loss system, but your value is providing peace of mind to your client, trust that you will make the most special day of their life truly magical, and the confidence you give your client for a lifetime – priceless.
Now lets say you have a dog food store. The product is dog food with a predetermined market price. But what if your store has a nutritionist for dogs on staff for free consults, your clients can groom their dogs there and get a free massage, and every time you go in, the manager greets you and your dog by name and gives you A+ service? Could you charge more? Absolutely!
Price, then, is not only based on the actual item or service delivered, it’s based on the relative worth to the customer. And that is based on how you judge your own value and the value you set for your customer. You see, when you know your true worth and set your expectation high, you set a standard for your customer and essentially are helping them ask themselves, “are you worth it?”
As entrepreneurs, we determine our price and our value. So unless you are the owner of a $.99 cent store franchise, you need to be aware of your personal value and how you can infuse it throughout your business, in order to make the income you deserve.
With an eye for style and simplicity, Shana Yao has a gift for transforming businesses and lives with personalized branding and by creating understandable and actionable steps focused on people’s connection to purpose and self-fulfillment.
Shana Yao is a business and marketing strategist, creative visionary, and Founder of www.YourMarketingMastermind.com, a website for entrepreneurs and small businesses that helps them create breakthroughs in their business and life to achieve greater success.