We’re against high-quality, yet low-priced products. In a BIG way.
Not only can offering them steadily kill off your business and severely limit cash flow, doing so tends to invite a lot of hassle that could be avoided simply by offering higher end products.
Here are five reasons to stop branding your products with “flea market” prices and start charging what you’re worth:
1. You attract fickle customers.
Bargain seekers are a disloyal bunch. They’re looking for the company that offers the lowest prices. If that’s you — ALL the time — you’re okay. But should a competitor enter the market with lower prices than you, you have a problem.
You’re forced to either undercut them — slicing into your profit margin once again — or deal with the fact that your customers, always hopping from the “cheapest” merchant to the next, are about to abandon you.
Or just won’t shop with you to begin with.
2. If your prices jump higher, your customers jump ship.
This is different from Point 1 in that, now, we’re talking about the consequences of what happens when you suddenly decide to start offering higher end products in a price range your existing customer base isn’t used to.
Your customers are coming to you now for, most likely, one reason: because you offer good quality products for “cheap.”
Should you start trying to offer your products for premium prices, a few of your customers might readily adapt, but the majority WILL leave you out to dry.
3. You’ll attract newbies. A drove of ’em.
People who expect to pay chump change for high-quality products tend to be “newbies,” new people to an industry or service who don’t know or understand the true value of those goods.
Newbies often either don’t have a lot of cash to spend (warning: shoestring budget ahead), or don’t think that they should spend it … because “info on the Internet is supposed to be free.”
This is a serious problem if your company isn’t looking to attract the newbie market.
You’ll find that seasoned entrepreneurs have generally conditioned themselves to ignore “cheap” products. They’ve been around long enough to know that “you get what you pay for,” and they’re tired of paying for “crap.”
When you have a cheap product, oftentimes the only higher profile clients and customers that will buy it without a lot of marketing, nudging, and “reminding” are the ones who are already your loyal customers.
The others generally tend to assume that your product can’t be worth much, else your price would reflect it.
4. You attract time leeches and bozos.
Early on in my first business, back when my products and services were cheaper, I experienced this all too often.
For instance, I sold a guidebook in a highly specialized area that helped business owners truly master search engine marketing.
Customers who will give you only $20 or $30 for a product like this often tend to think that you’re then their personal paid coach, or that they can treat you any way they please just because they parted with a dollar or two.
And THIS is a serious problem.
The same way “cheapskates” can tend to be unreasonable in the thinking that all info online should be free, they can also tend not to accept or acknowledge that you have other customers and responsibilities that don’t allow you to sit around researching THEIR individual questions all day.
5. You could offer the SAME information for a HIGHER price.
In order to increase your price, you don’t always have to first find ways to increase your product’s perceived value. It could already BE valuable enough to fully support a price increase without you doing any more work.
For example, my second product — that specialized guidebook above — was released at a lowly $22.97 back in 2000, because I made the mistake of thinking that number of pages equated even slightly to cost of information. (Ha.) It got lots of sales at that price. But every so often, I’d test an increase in price to see if I could raise it without sacrificing profit.
I tried $24.97, $29.97, $49.97, $59.97 … all without doing much if anything more to “add value.”
And each time, it still sold … at about the same rate as it did at the initial, cheapest price.
Of course, over the years, I updated the product whenever the search engine would significantly change the way they ranked their listings. But other than that, I did little if anything to add to the package.
And yet, it still sold.
And increased my bottom line.
I finally settled on a price of $87, and it continued to sell well, even without me promoting it any more. And I didn’t smother the product in “free bonuses.” It sold simply because it was a top notch product, again in a highly-specialized field. (I cringe at this today. This product was worth hundreds of dollars, being the most complete, most authoritative guide of it’s kind. We live and learn… Know your market!)
The Reveal: Are You Limiting YOUR Cash Flow By Underpricing Your Wares?
We sure hope not.
You could be making hundreds or thousands more dollars each month, just by raising your prices a mere $10… $100… $250. The ceiling depends on the product or service — and its value. Why not set up a split test right now, today, to see if you can get away with increasing your prices to MATCH your value? The rewards could mean a big jump in monthly revenue and profit.