Saturday, October 22, 2011

How To Raise Prices and Have Customers Thank You For It


By William U Pena, Manta’s Tip of the Day September 30, 2011

Raising prices is one of the best ways to double your profits - because all the extra money goes straight into your pocket. Yet, isn't our greatest fear that if we raise prices we will lose customers - or that our new customers will go somewhere else that's cheaper? Well, here’s a simple way to raise prices that customers will thank you for.

The Bonus
Price is determined by the amount of value that your customers see in your product or service. Simply, if they see lots of value they will be willing to pay a higher price. What if you could quickly boost the value in your customers eyes, enough so that they will be willing to pay more for it? That's where the bonus comes in. A bonus is something that you add to your product or service - that is highly valuable in the customer's eyes, but is very inexpensive for you to provide
.
Here are some ideas of bonuses that you can provide that are inexpensive for you - yet valuable for your customer:

1. Special free gift.
Try to get a vendor to give you product for free or sell it to you at cost (one man's trash is another man's treasure) - and then give it to your customer with their purchase.

2. Add a service to a product.
Provide consultation services that only costs you time, but that the customer values greatly.

3. Add a product to a service.
Find a product that your customer needs with your service. Partner with a vendor to provide it and share the profits.

4. Free advice/free report.
A report or video on a subject your customer likes can boost value. Meanwhile it will cost you a few hours 
to put it together.

5. Bundle items together.
Put products or services together, that your customer values - but that cost you close to nothing to provide.

6. Convenience.
Provide more convenience for your customers (open earlier, free shipping, turnkey system, etc.) without utilizing a lot of time or money.

7. Special packaging.
Provide the product or service in a package that your customers value greatly (add all of the bells and whistles).

8. Special arrangement.
Provide the product or service in a more beneficial format for the customer (packaged deal versus individual purchases).

9. Payment options.
Provide payment options that make it easier for your customers to pay (monthly payment versus lump sum).

10. Value pricing.
Add more bonuses for customers that will pay more, less for those who will not (my favorite).
Once you find the bonus that works and provide it as an incentive for raising prices - you will be able to raise prices and your customers will thank you for it.

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