One of the easiest ways to make more money is to charge more for your product or service. When I suggest this, I’m frequently met with a list of reasons why it’s not possible — “competition”, “economy”, “penniless prospects” and others.
So let’s consider the flipside to that negativity… what are the reasons you could give to charge more?
These reasons are levers. They are reasons that give you the leverage you need to charge more. You might not use all of them at the same time but you can mix-and-match to make more money:
LEVERS TO CHARGE MORE
- Value: This is huge and one of the more profitable opportunities. Rather than changing a single thing about your product or service, simply ramp up your marketing to make the value seem more valuable. (Of course I’m not suggesting that you lie! Rather, I’m suggesting that you currently aren’t exploring all the value your offering provides and you should make your marketing reflect the true awesomeness of whatever you’re selling… then increase the price.
- Tiers: Sell your product or service in tiers — bronze, silver, gold or whatever.
- Economy: Many prospects use the economy as a reason why you should charge less but the economy is a completely acceptable reason to charge more: Costs are rising; you need more money to deliver your higher level of service
- Exclusivity: Create a sense of exclusivity with your branding and your marketing and you can charge more just because it feels like no one else is like you.
- Community: This is somewhat connected to the above lever. When you offer customers a community they can be part of, they are willing to spend more to be included. Starbucks and Apple both do this very, very well.
- Extra bonuses: Provide extra “free” bonuses and then increase your price. (Yes, I realize that the free bonuses aren’t technically free but it’s all in how you package it.
- Scaled customers: This is controversial of not presented properly but it’s quite common. Charge your customers based on how much they buy. Charge them more if the buy less. This concept seems shocking… but we often gladly buy in bulk, which is essentially what this is. If you already do this, consider adding some new tiers or bumping up the minimum purchases for each tier.
- Paygates: Paygates are the points in your sales funnel when you collect the money. Sometimes it’s before deliver; sometimes it’s during delivery; sometimes it’s after delivery. You can increase the amount you charge by accepting payment later in the transaction. This is akin to “buy now and save”, or offering a discount if they pay before delivery. I’ve also read of another way to make more money from paygates: Rather than sell a product for one single amount, sell a trial version for a low amount and then charge more afterward. Rich Schefren talks about this in his Internet Business Manifesto.