How to Position Yourself to Charge Higher Prices

Hi! I’m Giulia. 

Thinking about raising prices, but something keeps holding you back?

Perhaps you have difficulty deciding on what to charge for your products or services. Maybe you feel you’re charging too little. Or you might just be fearing that if you raise your prices, you will drive away customers.

This is a classic problem faced by many entrepreneurs. And a lot of times, it’s based solely on assumptions.

We think that we’re going to waltz into a client meeting, show them a piece of paper with 3x or 5x the usual amount charged, and basically say “These are my new prices. Take it or leave it?”

That’s not the case!

You can charge double, triple and even 10x the amount you are now as long as you properly portray your value.

And today’s episode is all about positioning yourself to charge those premium prices without the fear or the burn of losing customers.

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To charge premium prices, you need to deliver on both tangible and intangible value. You can start by asking these questions:

  1. Who is your ideal customers?
  2. What is their REAL problem?
  3. How can your product or service solve their problem in a unique way?

Then, be sure to take these steps into consider when proposing this new price change:

  1. Identify what your customer really wants to accomplish.
  2. Frame the conversation around getting what you pay for.
  3. Explain how your product’s key points help them better achieve their goal.
  4. Create a vivid image of what happens if they use an inferior product.

Now, I want to hear from you.

What’s the single biggest insight you’re taking away from today’s mastery session? Do you have an example of a company that you don’t mind purchasing products from (without concern for price) because of the value? What are some ways you can add tangible and intangible value to your customers?

Leave a comment below and let me know.

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I look forward to connecting with you again. But until then remember, you are the writer, the director, and the actor of your visions, your story, your life. Take charge and transcend your limits today!

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FULL TRANSCRIPT:

The following is the full transcript of this episode of the Transcendence Mastery Sessions with Giulia Guerrero. Please note this episode, like all TMS episodes, is possible thanks to you and your fellow entrepreneurs, parents, and leaders. Subscribe to the free motivational podcast on iTunes or Stitcher.

Hello hello and welcome to today’s mastery session how to position yourself to charge higher prices.

If you’re here, it’s probably because at one point or another, you’ve felt it was time to raise your prices, but held back for some reason.

Perhaps it was fear.

Maybe you imagine that if you raise your prices, your clients will stop buying from you or worse, you’ll go out of business altogether.

If you’re thinking of raising your prices it’s probably because you feel super busy all the time and yet you’re not able to make ends meet, or you barely are.

And you probably don’t enjoy work as much as you used to.

continue reading transcript

The problem with pricing is that’s it’s based solely on perception. You may think that having a lower priced product may get you a higher slice of the market, but the moment your customers find that competition is selling at 30-50% higher than your price, you’re in trouble.

Instantly, your customer perceives your product as being of less value or somehow inferior. And it doesn’t matter how much you know, doesn’t matter how much you talk about your product or service, there is a clear perception that it can’t be good.

And sure, you want to have prices people can’t say no to right? But that’s where part of the problem lies. People can say no to low prices. They do it all the time when they go shopping.

You might think that expensive products drive away customers, but they don’t. You see it’s not so much a factor of expensive vs cheap and more one of value. A customer will buy an expensive product or service not because they like blowing money away, but because it brings higher value.

Even people that can’t afford a higher end product will find the way to purchase it because it’s of higher value to them.

So the question is: Would you prefer someone to tell you “no” because they don’t like your product or service even though they can afford it or “no” because they truly want it but can’t afford it at the moment?

Having a higher price gives the perception that you’re worth it, and other customers are paying that much for your services.

Plus, higher prices attract higher quality customers. These are the people that are actually showing up and putting the work in to get the good results. This lets you, as a coach, teacher, facilitator, be more effective. Even if you aren’t in that type of industry, it stills lets you change someone’s life.

Talking about changing people’s lives, that’s why you’re here isn’t it? Not here as in listening to this audio, but here on earth. Your purpose, your reason for being. You want to share your gift with the world and in the process, help someone else. And because of this, you might think you’re not helping them by having higher prices.

Here’s the thing, no one values free. They just don’t. How many of you have signed up for hundreds of free offers and they’re still sitting there? Take a look at YouTube too. Almost every solution to problems people have are sitting right on YouTube and yet there are thousands of people who are still overweight, or can’t figure out how to be more productive, or don’t know how to get rid of their anger.

The internet has thousands of videos that are wonderful solutions to this. Yet people don’t take action because they don’t value it and without the value, there is no commitment. People value things they think they have earned or are worthy of getting. If neither of these are present, then the sense of gratitude of possession is not triggered and we don’t feel happy for having it.

You’re not doing anyone a favor by charging cheap or giving away everything for free. You want people to actually live the results you can provide? Or be happy with whatever product they purchased? Then they have to invest in it, and that investment comes in money.

The commitment, the accountability, the customer service that’s what they’re paying for.

What if you have a more tangible product like a phone or a computer or diapers? Well, let’s compare two computer companies.

You have PC or MAC. You know that a PC is much less expensive than a MAC computer. A Dell XPS 15 which is comparable to a MacBook Pro 15 starts at about $1,000 while Apple’s starts around $2,000. That’s basically double the price of the Dell.

So why do consumers prefer the MacBook and most of Apple’s products to other products out there that are much cheaper?

One reason is because Apple’s approach to consumer products is fundamentally different from most other companies who work in their space. For one, they start with why. They connect with people emotionally before they even talk about their products. That’s where the value begins.

And it all truly revolutionized when Steve Jobs took back his company and introduced the Think Different campaign.

In this campaign they connected to those individuals who felt they were alone in the world that no matter what they did they just couldn’t fit in because the way they think and act doesn’t fit society’s perfect little bubble. And their message sounded like this:

“Here’s to the crazy ones, the misfits, the revels, the trouble makers, the round tanks and the square holes. The ones who see things differently. They’re not fond of rules and they have no respect for the status quo. You can quote them. Disagree with them. Glorify or vilify them. About the only thing you can’t do is ignore them because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius because the people who are crazy enough to think they can change the world are the ones who do.”

If you didn’t know anything about Apple, from just seeing the video for that campaign you would want to know who Apple is. In fact, you’d think about what they must be doing to change the world. Are they feeding the poor? Healing the sick? Do they sell products that help achieve greatness?

And then you find out that they sell computers? That totally changes the scope of things, but you don’t mind because they already engaged with you at a deeper level and whatever they’re selling, you want even if the price point is $1000 more than a comparable product.

In simpler terms, it’s all about the value perceived by your customers. And the simplest way to do this is by explaining why.

I remember a while back ago I was shopping for undershirts for my husband. I truly was looking for the simplest undershirt, something he could wear to protect his dress clothes from sweat and deodorant stains. I had set in my head that I would spend no more than $20 in these undershirts. I mean they sell those packs of white shirts for about $15 and he has a technique for wearing these shirts out quick.

While I’m roaming the store, the first thing I do is go for the pack of white shirts right. That’s what I had set in mind. But something in me just didn’t feel right. So I kept walking around the store and I ran into this shirt that seemed like cotton material but somehow felt different to the touch. I picked up the tag and it clearly described exactly what I was looking for “an undershirt that would reduce sweat from getting on the outer clothes layer”.

I was still unsure. I mean, did it really work? And was it worth the price? A representative seemed to catch on to my indecisiveness and came over. I asked him what was the difference between this undershirt I was looking at and a regular white cotton shirt, they both essentially help keep sweat off the top layers.

He said, “Well, let me tell you. Basically with clothes, you get what you pay for. You see these regular cotton shirts are not a bad choice. They are breathable and allow a little airflow for drying out the dampness. The problem is that in about 30 min to an hour, the shirt would be wet and all the sweat would go straight to the outer layer. Instead, this specific undershirt you picked up is made of 100-percent premium combed cotton and natural bamboo. The key material here is bamboo, a high-quality, absorbent, breathable, and ultra-soft material. It’s also a hygienic and hypo-allergenic option due to its resistance to odor, mold, mildew and bacteria even after multiple washings.”

He also explained that the process in which the combed cotton is made is very different than regular cotton. Combed cotton is a kind of cotton that has been combed to make the yarn stronger and softer. The combing process also rids the batch of shorter fibers and impurities, which results in a finer, stronger and more compact cotton. Combed cotton is considered higher-quality and softer than cotton that hasn’t been combed. And this type of cotton can hold up through the most intense sweating. That caught my attention. I love my husband, but he sweats way too much.

And the representative also said, “If you’re looking for a shirt that will hold up through the most intense sweat events and at least a year’s worth of washes, then Thompson Tee undershirt it is. You won’t have to replace them all the time, saving you money and allowing the wearer to feel comfortable throughout the day.”

I was sold. Why? Because I saw the value in it. I knew that I wanted to get an undershirt that would help keep sweat away from his dress clothes and in my end, I hated replacing undershirts every 3 months or so. I ended up buying three shirts to test them out, a total of approximately $100 after taxes. I could’ve easily bought 6 shirts for about $15 but I bought three for $100 and it was the best investment. My husband loves them and whenever I dance with him, he’s sweat and odor free. Total plus.

So if you’re ready to position yourself to charge premium prices, then consider these three questions:

  1. Who is your ideal customer?
  2. What is their REAL problem?
  3. How can your product or service solve their problem in a unique way?

If you’re struggling to answer these questions, then listen to the mastery session “How to define your customer avatar to boost sales”. It’s going to help you answer these questions before moving forward.

As I’ve already mentioned, positioning yourself for higher prices is about the value perceived by your customers. There are two types of spectrums this could fall into:

  1. Tangible value: how the product is made or it’s quality
  2. Intangible value: psychological benefits, social benefits and other benefits that can’t be measured in a tangible way

Going back to Apple, they cover both of these areas very well. Their marketing message falls into something like this as Simon Sinek once explained:

“With everything we do, we aim to challenge the status quo. We aim to think differently. Our products are user friendly, beautifully designed and easy to use. We just happen to make great computers. Want to buy one?”

It’s simple, straight to the point without a lot of the blah blah blah. This is what you must aim for.

To charge premium prices, you can follow these 4 steps:

  1. Identify what you customer really wants to accomplish. What’s that end result they’re looking for? Is there a problem they’re trying to solve?
    1. In my example, I wanted to purchase an undershirt that would last through washes, keep sweat and deodorant marks from outer layers of clothes, and would be comfortable for my husband. Of course, I wasn’t very direct about this with the representative, but because he knew what I was looking for, he was able to sell me the more expensive product.
  2. Frame the conversation around getting what you pay for.
    1. As dully noted, the representative also did this in the very beginning. Then he went on to explain the difference in quality and results.
  3. Explain how your product’s key points help them better achieve their goal.
    1. This was clarified through the features of the Thompson Tee undershirt and as the representative explained what I would get from it.
  4. Create a vivid image of what happens if they use an inferior product.
    1. Remember that 30 min of use = sweat and wet outer layers of clothes? Yeah, that painted the picture for me enough.
    2. Of course, be sure you remain ethical and moral when using this last technique. Don’t diss the competition or use insults, etc. in a way your customers would feel like they don’t want to work or purchase from you because of your attitude. Instead, compliment the product or brand somehow and then explain how you can surpass it.

There you have it. You now understand one of the most powerful positioning strategies you can use to differentiate yourself from the competition.

And you know, I get it. I understand how difficult it can be to price your products at a higher price. At times, it’s not just about positioning or the competition or what the market value is. Sometimes it’s the simple fact that when we price our products or our services, we are pricing something that’s truly invaluable, our time. The time we’ve spent creating and delivering those products and services.

Our time is invaluable, it’s precious, it’s the one nonrenewable source we truly have as human beings. So how do you price something to valuable to yourself? It’s difficult isn’t it?

And it might even be deeper than. It might be a level where pricing becomes a definition of what you’re worth.

You know, when you start out. You have to put a price on your wisdom, on what you believe you are worth. And that is the price point you give your products and your services beyond what the competition is doing.

And quite honestly, most of us, because I’ve been there too, don’t value ourselves enough to charge a higher price point. In the end of the day, when you’re staring at yourself in the mirror, you might not believe that what you have to offer has any value.

All those stories, those fears, restrictions, limitations start rushing through your head nonstop and you start asking yourself questions like,

“Am I truly worth it?”

“Is this product really something that people are going to benefit from and buy?”

“I mean, who am I to tell someone else to do these things?”

“What about the negative feedback”

And so on.

And you believe these things even if they may not be true. It’s a huge resistance.

Get that old, out of date story out of your mind and your subconscious because all you’re going to do is sabotage your work and your life.

You are your biggest critic. If anyone is standing in the way, it’s you. Not someone else. Sure, some customers will tell you the price is too high. Others will tell you the price is too high.

It’s your job to find out what their true objection is. “The price is too high” is the most overused phrase in saying “no” to a product or service because it’s the easiest way to get out of it. Deep down, there’s a true objection.

Maybe they don’t trust you enough to make a purchase. Or perhaps they trust you but they’re hesitant because of past burns from previous companies or influencers or sellers.

Don’t limit yourself to a low price point because of any objection. Not one from others and definitely not one from you. You deserve to price your worth at its true value not the value of someone else’s opinion nor your fears and doubts.

And as you move forward with raising your prices, if you decide to do it, remember to emotionally connect with your customers, understand their real problems better than anyone else, and deliver on value so they can perceive it.

When you do, you will transcend your limits and your customer base will attract the dream clients that will truly help your business grow.

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I’m honored to have you as a listener and I can’t wait to engage with you again.

Cheers and thanks again!

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