WHEN WE TALK TO OURSELVES AND OTHERS ABOUT RAISING OUR PRICES…IT DOESN’T HAVE TO FEEL LIKE A LEAP OF FAITH.
Here’s the deal…
We all know we should raise our prices.
It’s simple math right? We double our price; we make more money.
Except, there is that burning feeling inside us that makes us question how good our stuff really is.
And then the self talk starts…
“Is my program really worth that?”
“Will everyone stop buying if I raise the price?”
In this post, I will explain the psychology of why you should be raising your prices (it’s not just about the money) and how to go about doing it.
First, you need to understand…
The Big “Pricing Catastrophe” Too Many Coaches Make
Most people get this wrong. They think the reason they should charge more is just for money.
Here’s the truth:
You CAN make more money by charging more…but not always.
Many try to and fail miserably.
It’s not uncommon for a business to raise prices and sales plummet to a halt…
Why does this happen?
Because they changed nothing EXCEPT for the price.
That’s why you first need to understand…
What it REALLY Means to Up Your Fee
You’re a coach and you sell a course for $997
People are getting GREAT results from your course.
You every week you’re getting a new testimonial to slap on your sales page with a feeling of pride.
Clients even tell you that your program is worth “10X the amount they paid for it.”
So, you raise the price of the program to $3000
You make a few changes and add a few bonuses to increase the “thud factor” (amount of material people will receive when they purchase).
Then comes Monday morning, you dial your ad budget up to 11…
You’re excited because you’re already counting that even if the conversion rate drops by 10%, you’re going to make 75% more money.
Your spouse is excited because you promised them a new car.
And then…you look at your ad account to see what happened.
Conversions dropped dramatically…
So, why did this happen?
Because you need to understand that your price is like a bat signal to the world of who you are a good fit for.
After working with a great number of clients over the year, it’s clear that the person selling a $1000 program is selling to a different audience than the person selling a $10,000 program.
That look-a-like audience of people that bought your $997 program are NOT the same people that will buy your $3000 program…
Even if you made it 5 or even 10X better.
Sure, some of those same people with a strong enough pain would still convert (and thank you for making a better program).
But now, you’re now speaking to a different group of buyers that have (most likely) a greater market sophistication and want something better.
Now, there is a strategic way to raise your prices without having this happen to you.
I’ll talk about that a little later on.
But first, I want to go over the three reasons you should raise your prices excluding the fact that you will make more money…
Here they are:
Firstly, You Will Work With Better Clients
“You get what you pay for” is a built in human bias that causes higher priced items to have higher perceived value.
(Ignore this rule with most digital marketing service providers…I have heard too many horror stories)
You can compare this to any category of product or service but let’s stick with online courses on this one.
For a $1000 program, the consensus is usually that it’s good information and you can be successful with the program if you follow the steps and take action.
For most $10,000 programs, you feel like this will radically change your life and you will (with almost complete certainty) accomplish everything the person promises because they have the hundreds of success stories to back it up.
Great example that I heard from Jason Swank who owned a web development agency and he was pitching a big investment firm on a website (I’m paraphrasing here so just roll with it):
“The pitch was going great until I told them that the website would be $10,000. I could see that a few of them almost burst out laughing and I was trying to understand what the hell was going on. Little did I know that they are a billion dollar company and were expecting to pay 6 figures for a website.”
In Jason’s case, he got laughed out of the building because he pitched too low talking to higher level clients.
If he added another 0 to his price, he would have probably been working with them.
To wrap this up, realize that if you double or 10X your prices, you will be speaking to better clientele which will mean less headaches for you.
Secondly – Less Maintenance
Working with fewer people just makes life easier.
It’s much easier to scale and help 10 people paying you $10,000 per month that it is to help 100 people paying you $1000 per month.
It allows you as a coach/consultant to focus your time and energy on a few to help them get maximum results as quickly as possible.
Third – You Can Outplay Your Competition
Ads are getting expensive…
If you’re having to be a naughty parent and dip into your child’s education fund to fuel your dream business (sorry not sorry), you need to have great margins.
With a higher-priced program, you can easily outspend your competition to gain more customers.
its simple math.
If you can spend more than your competition to acquire a new customer, you’re set.
Better margins allows you to hire people, bring on new team members, pay generous affiliate commissions and give your clients a way better product.
Here’s the trick though.
Look at almost any successful business out there selling a high ticket program.
Many use the traditional webinar model where you go:
Facebook Ad –> Opt-In –> Video Page –> Schedule a call.
But, there is a new method that’s working like gangbusters right now to quickly grow your business and sell more of your higher ticket program.
It’s based on an age-old concept that a famous guy named Russel wrote about almost 5+ years ago…
I’ll Take “What’s a Value Ladder” for $100,000.
You don’t have to flash your high ticket program like an Internet Marketing prude on the first date.
Remember that age-old concept called a value ladder?
That’s the secret way to command high fees.
Except rather than a free lead magnet…get someone to buy something right away.
A list of buyers is worth way more than a list of freebee seekers.
Also, you may not know that 85% of people will not buy your higher priced thing within 90 days.
By building an email list of buyers that you can stay in-front of over and over again, you will be able to convert those people over time into your higher ticket programs.
To make this process very simple, here’s 3 businesses crushing it with this model:
Traffic & Funnels.
One of the fastest growing coaching company’s I have witnessed in the past 2 years.
They continue to grow month over month even when a lot of businesses teaching coaches and consultants are crashing.
Their funnel is simple.
They have 2 front end products:
- A paid ads workshop ($49)
- Their monthly memos (insider access)
If you buy one of these, they hit you with a few up sells to increase your average order value.
So right off the bat, they are already profitable from the upsells, but this is where the real sale begins.
As soon as you purchase, one of their appointment setters will call you up to schedule an appointment with one of their closers to close you on their signature $10,000 program.
It’s a genius strategy because what starts from buying something at $50 has the potential to become a $10,000 sale.
Free book –> Upsell of Free Strategy Session for signature program –> Downsell to Paid Program about Book Theme
The goals it to move people to the strategy session right out of the gate.
If they don’t go for the strategy call, there is a down sell to a $150 program.
I’m not sure exactly how much Todd’s E5 Program is but I know it’s around 5-6K.
Love him or hate him, Dan knows how to make people buy.
He’s got a few funnels right now but this is his funnel for HTC
First, free opt-in to a 4 part video series.
Salescalls.com ($299) –> HTC $2500 –> Inner Circle $2000 Entrance + $200 per month –> Closers in Black Event $500 –> HTM $2,000 per month.
About 20% of people upgrade to Inner Circle which means that for every person that purchases HTC, he will make somewhere between $5000 –> $7000 (not sure his exact internal numbers).
Here’s How to Raise Your Prices Today If You Have an Online Program
I believe that the traditional online course model is dead. I can go online and pirate every damn course out there with a few mice clicks which yes…may be extremely unethical (which is why I don’t do it anymore), but shows that information alone is no longer what people are looking for.
You see it in marketing messages all the time that “this is not just another online course”.
What people are looking for is access to coaches to get help growing their business.
Because most likely, they have already gone through many online programs in the past and have failed.
They want direct access to someone who can move them off their butt and support them.
That’s why programs that offer coaching are worth so much more than a do it on your own online program.
That’s why the easiest way to raise your prices, is to simply add a group coaching element to your program.
Having an 8 week program where they will have a coach that will take them step by step through each part of the processes to make sure they are doing it right works so much better than the old model.
After this, you need to then shift your marketing messages.
If you haven’t been getting people on sales calls before, now is the time to start.
As much as I would love to say copy can fix everything, it’s much easier to close anything higher than $3,000 over the phone.
The best MVP funnel for any coach or consultant would be:
Easy Opt-In –> 20 Minute Video Sales Letter –> Schedule a Call –> Thank you page with homework assignments
If you’re running cold traffic and have a few assets you could sell, it would be better to have:
Front End Offer ($5-$99) –> Upsell 1 Free Strategy Call –> Downsell Video Training –> (Optional insert other upsells or downsells) –> Thank You Page
Then, have a follow up email sequence to guide them through the front end offer content while encouraging them to hop on a strategy call.
You want to raise your prices to work with better clients and have better profit margins.
Remember that raising your prices means your working with a better client and you need to market to those people differently than the low-cost price shoppers.
The easiest way to do this is to use the simple MVP funnel:
Easy Opt-In –> 20 Minute Video Sales Letter –> Schedule a Call –> Thank you page with homework assignments
If you need help building this out and want someone to push you to raise your prices and write compelling copy…book a call with me here:
If you’re not ready to go to second base with me yet (totally cool), was this helpful?
Would love to hear your thoughts and questions in the comments below 👇