Face Your Pricing Fears
But first, I want to give you guys a minute to face your pricing fears because I know that you've got him and I want to hear him, so I want everybody take a minute, so those of you who are watching online, even go into our chat room, you could also go on to social media and use our hashtag create to make and I want you to share what's holding you back from raising your prices and while you guys are sharing online, I'm gonna pick on our in studio audience what's holding you back from raising your prices. I was gonna start right with tiffany, we're just going there. I feel a little stuck, okay category where I'm at, so I am kind of in between I'm building my online presence and building my host cell presidents, but I had been in that sort of at sea category for a long time and so now I'm looking to expand into a much bigger, broader market and I can't put myself out of business right now. So that's that's where I get scared like ok, so I jump the prices and I have raised my prices and re...
ally great things happened for me, and then I got really brave and I jumped him up again and then saw crickets and not really scared went back down. Uh oh so yeah, I mean that little in between where you have a couple of things happening one right? You have a category which is actually one of our triggers of perceived value that we're going to talk about and you have that I raised my sales I mean, high prices and nothing happened so we're going to address both of those christian I've actually feel like my prices are on the high end all right good to me and however I am I'm taking this inn and I'm thinking of one category that I could probably bump up a little bit and I just really didn't occur to me that actually maybe one houston even realize it you have a hard time because some of my pieces I sell are probably not profitable on the wholesale level and I know I need to raise and I'm afraid I'll lose sales because that's he's kind of a blow you know, prices I think are much lower their overall than they should be for most people were going toe I look to your site and that that I am concerned that some of your prices aren't profitable at the retail level I feel like my prices are competitive on etc but if I moved to my own platform it's making me consider what the prices should be interesting so you're thinking it might be time for a change but you're not sure yeah I think this question kind of confuses me it away and then I use a design program then helps me calculate what also would be etcetera it's just it's heart is subjective cause I want people get a fair price but I also want to make a living s so yes, you want that feeling of like you want your customers to not feel like they're getting ripped off so here's something interesting? What I just want to point out is that while that software can all be really good as a starting point, you're leaving money on the table if that's the only thing you're using to price your products because you want to actually price some based on the perceived value to the customer and that's typically much higher than any formula will give you so something to keep in mind we'll talk about that more probably um I have sort of two problems one of them is that I've never really had much success on nc and use it more is a catalogue okay, so I don't have any clear sort of data to like mine and find out whether it's profitable and all this kind of stuff but also I have the last thing you were talking about I want to make sure what I'm selling is of sufficient quality to price it at a particular level and some of the materials I use have a limited life span so unlike using traditional jewelry materials, you know, innertube rubber, which makes all the hearts, is, you know, it reacts with the oils in your skin and it can break down, so I'm like, should I price it high and include like a replacement heart in the price? So, like, how would I know? I want to, even though we're just area here, I want to talk about this one for just a second because it's going to do you a little preview of where we're going? And so one of the things that I see people start to express these fears is needing to shift the language tio away that communicates the value. So, yes, your product does not last forever, but that's not the reason that people are buying it, they're buying it because they are delaying the material from ending up in the landfill you're using right, and that that is a huge value add so one of the things that we want to d'oh and this is where acknowledging your pricing fears, how important is we want to get rid of that self defeating language so we can talk in a way that communicates the value to the customer instead of what we see as the flaws? Uh, I have repeat customers, and I feel like if I raise my prices, they would feel like it would be offensive to them and or I wouldn't sell. The flipside of that bill is I constantly have people who say to me that's to love the number one indicator that your prices air teo you yeah, yeah, yeah, you know what? I'm gonna be honest with you guys. I'm just gonna put this right on the table when you raise your prices, especially if you've to raise them a lot, you are going to lose some customers, but the then you have to think about is that you cannot serve your customers if you're out of business, and you can't stay in business if you're not profitable. So at the end of the day, it's not about cheating your customers, it's about building a business that last long enough to stay viable for your customers in the long term, I think I'm at a good price point. I've done a lot of work to be at the price point that I'm at my fear in the problem that I have is that I use very high end products to create my items and that's difficult to sell online, because it's more of a touchy feeling sort of thing, so you are needing to kind of really communicate that value so that yes, and under weirdness show customers the price is worth it. I did raise my prices after you know, watching one of your other courses which I love instantly you said just it okay, welcome to go on it no one back to denial it I'd been like procrastinating can I can't possibly you know, raise it by, you know, twenty percent I think and yeah on dh e I probably need to go up again, but I think I know somewhere it works or doesn't e I love it and you're right there's probably room to go up again yeah there in fact, they're usually always is what we're getting from our online audience. We have a lot of response I e o like wow there's a lot which ones yeah together would be so let's see here constant elusive says I fear that I will end up with too much inventory inventory so many paintings, nicole says I'm scared to raise prices of my paintings because at least half my customers are friends or friends of friends I find it easier when I hang in the gallery and try a new price they want to stand in my studio and say the price uh that is actually one of our triggers the value so we're going to deal with that a little bit more later friends I mean that being in the gallery versus telling your price yeah, maggie says I'm afraid to raise my prices on etc as I priced the same as others in my category, I've yet to see someone charging a lot more and making sales on, etc I mean, website, though I would be very happy to raise my prices. Um, are secret tree houses not really knowing what we fit? So I'm not sure what price ourselves, okay, so I know that there are a lot of pricing fears, and so I just want to address a couple very specifically that if you weren't asked directly, I know that they come up, and of course, the first one is that I'm worried I won't sell as much, and this is the number one thing that I hear from people is, if I raise my prices, I won't sell as much gets what you don't have to sell as much. So there's that, and I did hear some people say, you know what? I'm worried about excess inventory, so if you're particularly prolific and you make a lot of work, there's a concern that, you know, you're gonna have it sitting around. And so one of the things to think about is that just because you've made it doesn't mean it all has to be released online at the same time, you can actually be strategic in a way that sort of shows people. That there's a desire for your product and then you sell over time so there's actually a lot of ways to kind of deal with that excess inventory I run sample sales there's a lot of things you can do with that so there's ways to kind of address that but at the end of the day if you raise your prices you don't have to fell of much so that's less work for the same amount of money and that's really how you're going to build your business over the long term the other one and I hear I heard a lot of versions of this is I'm worried that I'll have to constantly explain or justify or defend my prices to people people don't get them right and so this is really the crux of what we're doing in this class is if we can use these triggers of perceived value you won't have to you don't have to explain and justify your prices to you're right people because they see it they see the value triggers, they get it, they buy it, buy it right away that's something also keep in mind is that sometimes there's a little bit of a head dating process to your customer buys but you're not going to have to explain and justify the other one that I hear a lot so I love to give this example where I go on to neiman marcus is website and I showed statement necklaces and the very first one that pops up when I did this search and took the screen grab a while ago was this plastic necklace for nineteen hundred dollars now it was a lot of on so very high and french luxury company and when I show that example on my show lots of other examples I hear but I'm not I'm not live on I'm not whatever big name designer big name person whatever I hear this from people all the time I'm not I don't have that brand power right so first of all you don't have to pretend to be a big brand I'm not telling you to pretend to be long gone but you have to assume that your products are equally is valuable there's nothing about what you make that makes it any less special than the nineteen hundred dollars plastic necklace right so first of all just start by assuming that your products are worth it but here's the other piece yeah that makes the company a luxury brand do you think makes a company a luxury brand they decided to be one exactly they said I'm a luxury brand and then they priced accordingly and they use the triggers of value it's not that complicated they decided to be and here's the thing I got to say now there's obviously a huge difference between like I'm gonna be warmer and I'm gonna be a luxury brand but you know how much work it takes to be wal mart, the economies of scale, the effort that is a lot of hard work, it's way easier to be long bond it's way easier to be the luxury brand because then you get to take the time to make the products good quality it's a self, this is self defeating. This is self, whatever winning yeah, help feeling there we go exactly right. The other thing is that it has never been easier or less expensive to communicate value through your brand. The things that I'm going to show you and we're going to talk about today do not have to be expensive. In fact, a lot of them are things that you can do for free it's just a matter of changing things to better communicate that value to your customer. All right? And then the last one and I heard it from a few people raise my prices, I paid attention, megan, I did it, and for whatever reason, my work isn't selling, tiffany said that happened to her, and the reality is that that could happen, but it happens because either a you're not in the right market or b, you're not communicating the new value. Or sometimes, in the case, we're hearing online. It's, your friends and family. And I think you should have a deal which actually just comes back to. You're not in the right market because your friends and family or not your market, you have to fight a different market.