So as we get into deciding what we would actually like to charge for our product
and services,
first we need to look at a little bit of consumer psychology and some marketing
strategy to get us started. So price does have a psychological impact on people.
It's a communication of value.
It's not necessarily going to be the only influencing factor,
but it does push them one way or the other when they first see that price point,
right? If I have two identical programs,
or just programs in general that seem very similar, one's $20,
and the other one is, you know, $120, there's a little bit of an assumption,
an assumption there that there is an additional value to this program because
it's being charged so much more. That may not necessarily be true,
but that is part of the kind of inherent assumption, uh,
that people tend to make when they are comparing prices on similar items.
Now, keep in mind this may actually work in your favor.
To sometimes maybe charge a premium price for a product or
service, you know, obviously has to be, you know, within reason. Um,
but that can influence people to biasing towards having or ascribing
a higher value to that product.
Raising those prices doesn't always mean a linear correlation in
the decrease in sales, right? If you, you know,
increase the price by five times, it doesn't necessarily, you'll get, you know,
a fifth of the sales.
If we charge a hundred dollars for a product and sell 10 and we raise the
product to, you know, price to 500, maybe we only sell half as many.
Or even if we sell, you know, a third as many,
we're still making more total revenue than we did selling 10 of them at a
hundred. We don't necessarily lose a commensurate, uh,
number of sales as we raise price. However, we also do need to be,
you know, competitive. That's where that reasonab reasonability comes into play.
So we're trying to be competitive against, uh, you know,
the other products in the market, but not so much that it, again,
works negatively against us with that psychological impact.
We don't want the lowering of our price to start to, uh,
decrease the perceived value of our product, right?
So you can't just charge like a 10th necessarily of what everyone else charges
and think that, oh, because it's so much cheaper,
everyone's gonna buy mine because of that psychological barrier of it. Well,
if it's so cheap, it's really maybe not worth my time doing.
I would rather do this, you know, more valuable program over here.
And that's where that premium pricing can work in your favor.
Like I just mentioned, in many cases,
you will want to split test a lot of your prices to try and find that
sweet spot. Um, especially if it's kind of more of a,
a niche type of service or a specialty service. Um, there's a lot more, um,
playing and testing you might need to do to find your best price point. Um,
in general, uh, especially with service type products,
it's tends to be easier to raise prices later
Rather than lowering them. Uh, and some of that, uh,
is because you don't want to seem like, oh,
I way overpriced this for the people who already bought it and now I'm bringing
the price back down because no one's buying it, right? That doesn't look good.
But in the case of something like coaching and you, you know, raise your price,
uh, whatever, a hundred dollars, you know,
after a couple months or after a year, if you provided, you know,
a reason for that,
it may actually work in your favor and look even better for you, right?
It's like, oh, I raised my prices because, well, my schedule filled up.
My clients are staying with me. I don't have many spots available. Or, you know,
I got this new certification. Um, I've gotten better at, you know,
producing X results for my clients. I took this new course. I have more skills.
I'm providing a better service for my clients.
And that's why the price is going up.
And that can look good not only from the fact that, um,
you are bettering yourself, but that you have such a,
a qual a high demand for your time that you have to raise the price
to make it worth your time to continue to work.