Many entrepreneurs are afraid to price their product or service too high for fear that they’ll scare customers away. However, it’s not necessarily easier to sell cheap things. For example, many artists believe that cheaper is “easier” to sell but the truth is that luxury buyers expect higher price tags, and pricing too low can hurt sales.
In fact, there are many times when people want to spend more money, such as fine wines and designer bags, because they equate the higher price tag with more value or prestige. Offering a luxury or high-end service at a premium price signals to your customer that they’re making the right choice. You want to price your product to be reassuringly expensive.
Price isn’t always a determining factor.
There are plenty of times in life when price isn’t a determining factor and you’ll distrust the lower-priced services. For example, if you’re looking for a babysitter, you might find one that charges $10 an hour and another that commands $25 an hour. Do you know based on price, which babysitter you’re going to pick? What if I told you that the lower-priced sitter is 12-years-old and the other is Mary Poppins?
Instead of pricing low, take a hard look at the service you’re offering and who your ideal customer is. What do they value? Communicate how your offer stands out from the competition based on what your customer values.
Cheap prices aren’t sustainable.
Let’s say you want to make $60,000. If you have a product like a $5 e-book, you’ll need to sell 12,000 to reach your goal which means you’ll have to find 12,000 customers who have it. If you offer the same information as a $100 e-course, you only have to sell 600 to achieve the same ends.
Many entrepreneurs believe they need a bigger audience. However, it’s much easier to fix what you’re producing. Use your time and resources to create a more valuable product for high-end customers rather than trying to appeal to the masses.
Low-profit thoughts lead to low profits.
Have you ever thought of one of the following statements?
- No one around here will pay that much.
- I’m just starting out.
- No one is buying right now. There’s a [fill in the blank]. (ex., recession, pandemic, etc.)
Most people are so married to their sabotaging stories that they can’t recognize these thought patterns as low-profit thinking. Our brains have evolved for survival rather than goal achievement and will continue to offer us these unhelpful low-profit thoughts that hold us back from our greatest dreams.
First, recognize you’re thinking of unhelpful stories that aren’t serving you. Next, charge a premium for your product or service. When you do so, you’ll attract better customers who appreciate the value of what you’re offering and you won’t have to sell as much!
Image: Courtesy of Miriam Schulman
About the author: Miriam Schulman is an artist, author, and founder of The Inspiration Place and The Artists Incubator Coaching Program where she helps artists (from amateurs to professionals) develop their skills, tap into their creativity, and grow thriving art businesses. Her book, “Artpreneur,” is scheduled to be released through HarperCollins Leadership in February 2023. Her podcast, “The Inspiration Place,” is in the top 1% of all podcasts globally and is listened to in over 40 countries. Connect with her on Instagram @schulmanart.
Featured image: Create & Cultivate