You want to know the fastest single way to increase your margins? Increase your pricing.
Sorry there hasn’t been a podcast in a while. It’s been 75 degrees and sunny for a while. So the top was off on the car, not exactly the best recording conditions for a podcast. I don’t think you guys would’ve heard anything I said.
I think we’re supposed to get a little bit of rain this week, and we just got back from a little road trip down to the beach so we had the top on for that. Anyway, here we are…
Why Every Stalling Brand Should Increase Their Prices
Pricing is something Scott and I have been discussing a lot. And it’s not just our own pricing, but pricing strategies for customers that we help out. Just in general, lot of time talking about pricing lately.
We launched our Facebook group for SamCart customers. If you haven’t joined it, you should. Just go to Facebook and search for the SamCart Customer Mastermind, I think is what it’s called. But it’s been turning into a phenomenal Facebook group. A ton of people in there helping each other out. We’ve got a chance to really engage with the people that are using SamCart every single day, which has been awesome.
Because of that Facebook Group, I’ve been able to dive in and look at a bunch of people that use SamCart to sell their stuff online. The people that are definitely newer at this online marketing game, people who are just getting started, their prices are always so low.
How To “Price Spot” A Rookie
And I remember that’s kind of what I did when I first got started. It’s scary to go into the top tier of pricing in your market or niche right off the bat. There’s a lot of doubt whispering in your ear…
- You don’t really believe in your product…
- You don’t really know if anyone’s going to believe in you enough to spend a lot of money on it…
- You’re not sure if it’s really going to get the results…
- You’re scared people are going to refund…
I mean, there’s tons of fears right when you start out selling something and it usually manifests into you underpricing your products severely.
There was this one person using SamCart, that I think makes a great little example here. Their site was absolutely gorgeous. Their products looked fantastic. They even sounded awesome, to the point where I was thinking about buying their stuff.
I looked at it and they had a bunch of different products inside their SamCart account and the prices were all $17.99, $11.99, or $24.99. Nothing a single product was over 30 bucks.
I remember thinking, “This is crazy. This person has no idea how valuable this stuff is.” I know people selling similar courses or eBooks with prices around $1,000 or $2,000.
And sure, their courses might be a little bit better. But not 100x better! And it’s almost the same content. Yeah, there might be more of it. And I’m sure there’s some differences, but for the most part they’re solving the same problem.
And one person’s pricing is 100 times more expensive!
But I get it. When I first got started out, my first baseball offer was an eBook that cost a whopping $27.00.
The second offer we came out was a video training called Instant Hitting Drills. We sold it as a 1 click upsell after buyers purchased the $27 ebook. I priced it at $99, and I distinctly remember having a heart attack thinking, “Who is going to pay me 100 bucks for this thing?”
Well it turns out, Instant Hitting Drills was TrainBaseball’s most profitable product of all time. And it wasn’t even close.
A little while down the road, while we were growing Get 10,000 Fans, our first product was two payments of $47. It was called The Timeline Blueprint. We had two 1 click upsells after customers placed their order.
The first upsell was priced at $197, and the second was my most expensive product to date…at $397.
My mentor had to
I think we did just over a million bucks that first year and it took me almost two years to come out with a course that was $1000, and it was just because I was scared. I was literally terrified to have a $1000 price on a product.
That first product, we launched it and then we did a big partner launch, and it was our first million dollar launch. It’s the one we wrote the blog post about a couple weeks ago. But it’s just crazy. Literally because we raised our prices, we made more money, period. That was it. We didn’t lose a ton of customers. Obviously, when you raise your price, not as many people are going to buy, but it’s never a trade off to the point where you’re going to make less money because you raised your price, typically. Obviously, everything has its tipping point. But for the most part, almost everybody listening to this call right now could probably double or triple your price and maybe not even lose a single customer or a single potential customer. But almost guaranteed, you will make more money.
One way to kind of test this out if you don’t want to just kind of go in and just raise your prices blindly and then assume it’s going to work, is kind of have pricing tiers. Have a small, medium, and large packet. Something I’ve been watching. Brian Harris, actually called him this morning to get some feedback on our pricing structure for our big SamCart launch coming up in September. But I saw him do this pricing tier a while back and then thought it was pretty smart, so we decided to test it out. And ever since we did it, it’s just been awesome. Let’s say you’re like I was and your products 27 bucks and you’re terrified of have a $100, or $500, or $1000 price point. Well, just take your $27 eBook and start selling it with a pricing tier, so have $27 be your low end. You can even have it be in the middle end if you want. Have a $19 version, a $27 version, and a $47 version. And then look at the percentage of people that are buying each price.
If you have a bunch of people, if you have more than 10% of your buyers are buying your highest level, or the most expensive price, then your price isn’t high enough. You want to raise your price and keep raising it until 10% or less of your buyers are willing to spend the top tier price. Hope that makes sense. It’s a little bit confusing, but hopefully that makes sense. So if you’re selling something for 27 bucks, I would suggest making that the lowest price and do a little promotion where you can get the eBook for $27. Maybe you have the eBook and some little bonus for $47, and then maybe it’s the eBook and a little bonus and a personal call with you for 97 bucks, or a 100 bucks, whatever. It doesn’t have to end in a seven.
And then do a little promotion. Do like a weekend long thing. Say, “Hey. We’re doing this special offer. It’s just for a couple days.” Put a countdown timer on the page to add some scarcity in there. Email your list or post on social media a couple times and run some ads to it. And then just watch. Sit back and watch the numbers. And if when you’re done, if more than 10% of the people that bought the $97 course, or the $97 package, whatever it is, you need to raise your price. And then you need to just move up the scale. Now your newest cheap price, instead of $27, move it up to that $50 range. Your middle tier should be that $100 range, and then now come up with a $200 range, and do it again. A month later, run the same promotion and don’t change anything in your products. Don’t feel like you have to deliver more unless your customers are complaining. But if they’re all happy with what they got, you’re just undervaluing yourself. It’s not about under delivering for your customers. If they think you’re delivering, you’re good.
Anyway, yeah, moral of the story is, if you’re listening to this, you most likely need to raise your price. As scary as it is, it will probably be one of the better decisions you’ve made in your business in a long time. But anyway, I think that’s all I’ve got for today. Anyway, yeah, go raise your price. Do that little pricing tier test. It’s super easy and you’ll learn a lot about your people and hopefully get a lot more confident in what you’re making and how it’s helping people. So that’s all I’ve got. Hope you guys have a good rest of the day and we’ll talk to you soon.