Raising Your Rates Can Increase Your Business
by Diane Hughes
How many times have I heard literal horror stories from Internet
business startups? Too many times to count! I get emails from
those who just simply can’t seem to make a living online.
They’ve tried everything (according to them) and are still
struggling to make ends meet.
At some point, the "conversation" always turns to price.
That’s where I find a lot of online business people making their
mistakes. The common mindset among Internet business startups is
that you have to keep your prices rock-bottom low in order to
Nothing could be further from the truth! Raising your rates
(in some cases) can actually increase your business. How so?
Here are several reasons....
1. People Equate Price With Quality
I’m sure you’ve heard the expression, "You get what you pay for."
That statement comes from a long line of lessons learned by people
across the globe who have bought something at a discounted price
and regretted it later.
Maybe the product was used. Maybe it was made with inferior
materials. Perhaps a "discount" service they tried fell through
and left them in a fix. It could be any number of reasons, but
those who have tried the "bargain" or "discount" route and have
been burned are quick to look for higher priced products and
services. It makes them feel safe.
I know of several online business owners who raised their rates
on the services they provide. What happened? For about one week
it seemed they had made the wrong decision. Business all but
stopped! However, after that "adjustment" period, floods of
leads came rolling in. They never regretted it.
2. Customers View Higher Prices As A Status Symbol
It’s true! I’m sure you’ve met some people who love to brag about
how much they paid for everything they own. Their car was custom
ordered from the dealer and cost much more than any old car
chosen from the showroom floor. Their clothes reflect this
season’s latest trends and were purchased at full price from
the expensive department store... NOT at an end-of-the-season
clearance sale. I could go on and on.
The point is, many customers simply will not buy a product or
service at a discount price regardless of how good the quality is.
They have the "ability" to afford higher prices and are proud of
3. Many Believe Expensive Products Are Image Boosters
I actually heard this conversation in a department store once.
Woman One: "Look at this blouse! Isn’t it wonderful?"
Woman Two: "It’s OK, I guess."
Woman One: "But it’s an Adrian Bloom blouse!
I’m going to buy it and make all my friends jealous."
Woman Two: "Who is Adrian Bloom?"
Woman One: "I have no idea, but this blouse costs twice as much
as that Liz Claiborne one so it must be the next big thing!"
Can you believe it? The woman had no idea who the designer was,
but based on price, she decided it would enhance her image so
she bought it.
The same is true of Internet shoppers looking for products or
services. Those who believe being associated in some way with
higher-priced businesses are more willing to spend money because
they feel it will enhance their images.
The psychology of pricing is a complicated subject, and I’ll
be the first to admit that raising rates will not work for
everybody. Before you raise your rates, consider the following:
1. Can you offer something better or different than your
2. Will the rest of your business support the "branding" of a
higher price? (i.e., Do you have a very professional-looking
site, excellent service, and other elements that those who
pay higher prices expect?)
3. Will the new pricing structure allow you to make as much,
or more, money by selling fewer items at a higher price
rather than many items at a lower price?
It just might be that the reason your business is struggling
is that you’re charging too little. Give some serious thought
to raising your rates. It just might be the best thing you
Banging your head against a wall just trying to make some
money with your internet business? Tired of books, manuals,
and lectures that give you ideas, but don't help you actually
turn ideas into profits? ===>> http://madmarketer.com/diane
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