Feb 10
12
Learn from an ex-FBI Agent! (Part 1)
I was talking with a friend yesterday and he was telling me a story about somebody he used to work with. This guy was retired from the FBI and afterward went into consulting and private investigation work.
After a while, he wanted to cut back on the hours he put into his business and to be more selective on who he took on as a client. Problem was, he just wasn’t sure how to do it.
Eventually, he decided to try and raise his prices. So what he did was bump up his rate to $500 per hour! And you know what happened? Nothing!
His clients wanted his services bad enough that they were willing to pay the premium price, even at $500 per hour. How cool is that?
The tenancy for small business owners is to have the lowest price of their competition, especially when they are just starting out. This is backwards thinking! Lowering your prices decreases your perceived value at the same time. Usually your pricing equals perception. I think I’ll trademark that saying if someone hasn’t already! “Pricing Equals Perception”
Think about wine, cars or clothes. The more expensive they are, the better their perceived value becomes.
I’m short on time right now but have so much more to share with you on this topic. In my next post, I’ll delve into more about how to set the right price, the effect your prices have on your profitability, and how to win in a low price war.
~Brodie