Episode 114 – How to Raise Your Prices

Show Notes

– It’s tied up with how you feel about money.
– About how much money it’s okay for you to make.
– About feeling bad when you think you’re charging too much.
– About your pride when you ARE charging too much, but need to make a change.

The Impact of Pricing:

– I’ve told this story before. About the customer and the $8 DFX Shirts, but I’m going to tell it again because it should terrify you.
– Pricing too high is tricky as well. With price testing you may find that you make MORE money in the end by charging less for specific items.

In the rest of this podcast we’re going to explore price testing strategies the let the market tell YOU how much you should be charging. And taking all the emotions out of it. (or at least as much as you’ll let it)

#1: The “Tipping Point” Method – Raise your prices incrementally until you see your customer leave.

#2: New Product Change Tactic – As you bring in new blanks, new products or new designs you introduce them at higher prices and leave your older ones as is. A slower tipping point method.

#3: Use discounts and offers on your website to measure the impact of lower prices.

#4: Show different prices to different users and measure the relative performance.

#5: Create different versions of your products and offer them at different prices to see which performs better.

#6: Use an email or call list to sell at different prices and measure conversion rates.

Here are some ways to increase pricing strategically:

Adjust discounts on volume – If you normally provide your first discount at 12 shirts, bump it to 15. If the next tier is 30, bump to 50.

Add value extras – increase your price but add more value and low cost value-add extras. Include wash instruction cards for every shirt, put every shirt in a bag, offer a discount for a size exchange. e.g. 25% off size exchange if someone wants a different size. up to 3. etc.

Raise Fees – if you charge no ‘set up fee’ add a modest one for certain orders. If you charge a $20 fee, make it $30.

Increase cost for higher perceived value – sell glitter or digital full color and increase price much more than the basic. Then push this offering. Even though your cost might be relatively the same the product seems more valuable.

Timed price increases – You may want to increase pricing by 20% but get backlash from customers. Start with 5% and make it a goal to increase 20% over X months.

Offer faster delivery at a higher price – Some companies offer a ‘rush’ fee. Instead, you could offer a standard delivery that is long, and offer ‘priority’ for a modest fee. e.g. free for 14 days, $20 for priority 7 days, $80 rush for 3 days