Your goal today – take MASSIVE action.
What are the opportunities in front of you that you aren’t making the most of?
Usually a business has more opportunities than time to do them. Here are a few common ones!
- Increase your prices
- Sell more to your current customers
- Follow up on old prospects
Raise your prices – Raise Your Value:
Most entrepreneurs undercharge what their product or service is worth, especially if they are new in business. But they don’t have to.
And creating more revenue is quicker and easier than you think. One surefire way
to double your revenue is to double your prices. But as your prices rise, so must your value. As you increase your prices, you have to make sure you are delivering way more value, not simply more assets or deliverables.
Here are some specific tips from Jason Cohen, a millionaire who has grown multiple million-dollar businesses and now helps startups at asmartbear.com.
TIP #1: If you’re going to raise your prices (and you should), you have to raise your game.
If you’re going to raise your prices (and you should) you have to raise your game. You can’t charge $1000 a month and be crappy; you have to earn it. You want to be four times more expensive and four hundred times better.
With extra cash flow comes the time to dedicate to better service and the security to focus your full energy on creating a better product. Instead of constantly scraping by and searching for new clients/ customers, you’ll have the peace of mind needed to be truly great at what you do.
And while your profit margins will be much greater for the same amount of work/ product, the difference is in the client/ customer experience. When you charge more the experience must be amazing, support must be amazing, or the product must be amazing. It doesn’t have to be any one thing but you have to be amazing to justify that.
People purchase based on value, not on how much work it was to make it. – Jason Cohen
Tip #2: Clients pay based on the value you provide, not how much effort it takes for you.
Have you ever felt that you can only charge a certain amount because that’s all your service/product is worth? A lot of business owners don’t FEEL like they can charge more. They have perceptions of what the market is willing to pay or how much they are worth.
The truth is clients and customers pay based on what they’re getting out of it – how it’s changing their life, how it’s making them successful – not based on how much effort it was for you to acquire them, deliver the product/service, or provide continued support. For a higher quality output, they’re willing to pay top dollar.
But in reality, you set the bar. You choose your market and where you want to sit in that market.
And the downside to doubling your prices? There is none. When you TEST a price double, it takes the risk out.
Simply test your higher price on new customers, while maintaining your previous pricing structure for your current clients.
If you don’t get the new customers, it doesn’t hurt. But if you do, it’ll improve your profit margins tenfold. Win-win!
You have a few easy and quick-to-implement options for pricing structures that you can use right away.
- Creating Tiers
- Incentivizing Annual Prepays
- Prepay Strategies with Current Customers
For recurring revenue products/services, you’ll see that most successful businesses use tiers. Because there is proven pricing psychology regarding how and why tiers work.
did you know that no matter what the tiers are, people are more likely to pick the middle tier?
So by offering different tiers, the average purchase will be above the lowest tier mathematically, which gets you into a better place financially.
There is also some strategy behind naming your tiers, as well.
For example, Jason Cohen’s new company, WPEngine, offers the following tier structure:
Tier 1: Personal – $29 a month Tier 2: Professional – $99 a month Tier 3: Business – $249 a month
Call your highest paid tier “business” because people who have businesses will think ‘I need the business one’ and they purchase the most expensive tier.
If you are having cash flow issues, annual prepays can be a great tactic to get cash in the door quickly.
As a coach I require a 6-month commitment, and I give a discount to anyone who wants to pay the whole balance up front. This strategy is great because it provides an infusion of cash on the front end which can really help you breathe financially.
Millionaire Jason Cohen said, “[Annual pre-pays] are transformational. They can increase the cash flow of the business three to five times.”
Annual prepays can be used to hire help so you can expand, search, and market for customers with the freed up time.
And in the end, your customers will thank you! They are getting a deal! They are paying less overall and you’re getting the cash flow that you desperately need. So when you need cash flow more than you need the total money, this strategy buys you time.
How much does your product or service cost?
What does it cost total for the whole commitment? (if there is no end date, use an annual price)
What discount are you willing to give? What is your new prepay price?
Prepay strategies with current customers
Give either one or two months free for current customers who pre-pay for the next year. For example: If you choose the WpEngine.com professional plan, upon checkout you can pay for the year:
• $990 per year (2 months free, a $198 savings) • $99 per month
The Biggest challenge in raising your prices (And it’s not what you think)
You may think that getting customers to pay your increased rates will be the biggest hurdle to overcome, but it’s not!
The biggest challenge can often be overcoming a mental and emotional battle with yourself.
If you are your product, sometimes the value is hard to judge, and as you consider raising prices, you might bump up against self worth issues. This can be challenging, but not impossible to tackle if you have the right tools.
If you’re finding that you’re struggling with self worth and doubt in the value you provide a great resource is the book Six Pillars of Self Esteem by Nathaniel Braden.
You can also watch my interview with serial entrepreneur Dan Martell, Lessons Learned From Multiple Failures.
How do you Know When you’re charging Too much?
How do you know when it’s too much?
You never want to swindle your customers, so you need to know when to stop raising your prices. First, you have to be delivering the value. If customers don’t feel like the value is there, you will know.
How will you know? Your sign up rate will go down, you may get complaints, or people may start backing out more frequenty. The nature of the customers and the signup rate is a very direct metric.
Be careful but keep pushing!
As you go through your price change, always remember that raising prices for new customers should never mean delivering poor quality to your old customers. However, raising prices should equate to raising the quality of your new customers. This is a delicate balance you will want to watch and maintain as you go through this transition.
if you’re concerned people will complain about the new prices, you’ll be surprised to see that they won’t!
If you grandfather all your old customers and keep their fees the same, they won’t care if you increase the price. If you have a new customer ask about the previous pricing, and want to give them the lower price, you can if you feel so inclined! You are the boss.
Doubling your prices is one of the few things I’ve found that can have so many benefits with so little risk.
Sell More to Current Customers:
You can easily create more cash in your business when you already have an existing customer base and a product
or service that they still need. As current customers, they already know and trust your brand and are happy with your products, so it’s much easier to get them to purchase more (rather than go out and find new customers!).
If you have taken care of your customer and your product was highly valuable for them, they are often willing to have you solve another problem for them. And when you already have a relationship with the customer, it’s a lot less expensive to earn their revenue!
Here are a few ways to sell to existing customers:
• Create a New Product or Sell an Affiliate Product
• Upsell Them
• Remind Them of Your Other Offerings
At every stage in the process, you want to think about the lifetime value of a customer (LVC), not just the one transaction they have had with you. You can increase the lifetime value of a customer by selling multiple or recurring things to them. Click here to figure out your LVC.
Another way to increase current customer sales is by creating a new product or service that serves the needs of your current customer base. For example, I helped Joey 100x his business in 4 months. He was making $500 a month in September, and by January, he brought in over $50,000. How? He created a new program to service the needs of his current subscribers. He had about 3,000 people on his email list and he had no
core offering. He was doing affiliate deals and sponsorships, but hadn’t offered a core product that his current customers could buy.
Of course, you don’t want to create random products to solve everything your customer needs, but if you do not currently have a flagship product, like Joey, please do that now! It removes the trading time for money and allows for leverage.
If you already have an audience, it’s easier to sell a new product to them. Another example is Laura Roeder. Laura Roeder, from MeetEdgar.com, created a new software product when she realized she had a void to fill with her current customers.
“The benefits of selling to our existing audience is that we were able to test a lot of different marketing strategies. For example, ‘let’s take this segment from our existing list and try this e-mail campaign,’ or ‘let’s try this type of coupon and see how people respond.’” – Laura Roeder
Offer a complimentary product or service:
It’s good habit to periodically ask customers what else you can help with. Even if you don’t have a product or service that matches their needs at the time, you will gain invaluable of knowledge about your customer and their needs. Or sometimes, you can also refer people or products to them – it’s a win-win. They get a quality solution to their problem, and you gain a referral or affiliate fee. This will also let you know where there might be a product that you could create as a supplement to your main offering.
Follow Up with Old Prospects and Old Customers:
How long has it been since you went through your “old” list?
When time passes we forget about old prospects, people we met at a conference, or even old customers that might need our services or products again!
Make a list of old customers and prospects
-Go back through old invoices or your accounting software to write down the names.
-Go back through your CRM or prospecting system.
-If you are like a lot of small business owners, you don’t have a CRM or system – so do this:
-Go through old email looking up specific keywords depending on your business (proposal, signatures, coaching etc)
-Go through your linkedin contacts and see if anyone was a prospect that you are already connected to
-I even go through Facebook looking for people I have met at a conference
Don’t just email them cold. Look them up on social media and see what is new with them. See if there is something of value you can add to what is going on with them right now. Maybe they just launched a new product, or hired a new employee and you can use that as a reason to reconnect.
Try to raise the bar too, like a hand written card, or something that makes you stand out. Clients that worked with you before will want more, not just the same old service or product in the past. What can you do differently that will really serve their needs best?
When you follow up, show them that you actually CARE.
I check in with past clients just because I really want to know how they are doing. We work together for such a long period of time, it’s hard for me not to get updates! So I email them and ask. Occassionally it turns into a reengagement or I can help them with an product or service I’m an affiliate for too but I don’t push hard, I just try to help. It makes it a win-win for everyone – not a “I’m checking in cause I want to make more money from you!”
Follow up! Don’t forget this – it’s one of the most important pieces! People are busy and emails get lost. And stay tuned because later this week I’ll be giving you specific follow up templates you can use with people to get a better response rate and not seem spammy! (but do the initial emails/contacts now so in a few days you can follow up and use the templates!
Now get back to hustlin!!
BONUS: If you want an awesome hustle song – Check out this song by Will.i.am – You can go hard or you can go home! (I listen to it on repeat sometimes!)
- Decide if you can raise your prices. If so – RAISE THEM TODAY. (no excuses!)
- Make a list of your current customers. Send them an email to discuss the opportunity of buying more.
- Make a list of warm prospects (old customers and clients) and sell them right now.
If none of these apply, that doesn’t mean do nothing. A recent millionaire I interviewed said you should do this this week!
Make a list of 25 opportunities that will make you money this week that align in your business.
>> CHALLENGE CHECK-IN
Stay tuned tomorrow for Day 2 and be sure and catch up with us to share Big Money Wins in our Private 1K in 7 Days Facebook group!