Hey Rainmaker, today I’m going to tell you how to make a lot more money!
Before I dive in, remember my special 20% savings offer on a half-day, one-on-one consultation with me expires in about 24 hours.
You don’t have to do the consultation right away — in fact, once you pay your fee to lock in this rate, I’ll send you some prep work plus a link to schedule your date before the end of the year. We will do it on a schedule that makes sense for both of us, and gives you adequate time to prepare.
But to get this special deal, you have to put down your investment before tomorrow at midnight.
After tomorrow at Midnight, the price goes back to “retail” rate and may never be this low again.
Okay, let’s talk about making you a lot more cash…
One of my absolute favorite things to do is raise prices!
When I started working with the IT training company out in Oregon, we had an archive server of all our training, that functioned as a total corporate training solution.
When I got there, the price was $9,999.
Over the years, we definitely added value to the server. Since it contained our entire catalog, the more training we added, the more it contained. But because this was tech training, there was a definite fall-off in value for the old training.
By the time I was gone a little over 4 years later, there was maybe 25% to 50% more CURRENT training on the server. There was a lot more total training, but I’m talking current.
Going by the value of the current training alone, you’d think that by the time I left, that server solution would have sold for roughly $15,000.
No way, bub!
I’d been one of the biggest proponents in my time there of raising the price. My theory was that we’d continue putting upward pressure on the price, until demand dropped significantly.
The value — even at 5-10X the price — would have been there. I had no qualms about that. It was, by far, a better value for training than just about any other solution out there.
The question was simply how much our buyers would be willing to pay.
If anything, I thought we didn’t raise the price fast enough.
By the time I was gone, the price was $29,999 — basically 3X what it was when I started!
And although we’d upgraded the hardware… A little bit…
This price increase was totally disproportionate to any rational justification we could have made.
We simply recognized that we were charging a price that was lower than the market was willing to pay for what it was we offered, and raised our price to be more in line with what the market would pay.
And the reality is, every time we raised our price, we sold more and were in higher demand!
The company has since moved on from that particular product. But if they were still selling it today (and I were allowed to set prices), it would probably go for $50,000 or more.
I’ve applied this in my own business…
When I got started as a copywriter, I took whatever work I could get, at roughly what the market offered.
I needed to make a “full time” income. And although I never stooped to Elance-level rates, I went pretty cheap. I made up the low project fees on volume of work — I was cranking out sales letters as fast as I could get the projects.
This served me well, and got me through that transition of “making the leap” to a full-time freelance career.
Within a year of getting going though, I wanted to take on bigger projects, with bigger marketers, that represented bigger opportunities.
And I realized that in order to be taken seriously for this next level of opportunities, I had to charge more. (That’s a little secret about raising prices — generally, higher prices for your fees command more respect from better clients, as long as you’ve got the chops to back it up!)
So when I had the opportunity to work with a new client who I thought the higher rate would be a fit for, I quote DOUBLE the fee I’d been paid for my last project.
I was sweating bullets as I did so… But then they said “yes!”
Suddenly, I had a new and higher fee. Not just for that client, but for ALL clients.
It took me a while to raise my fee again, because I ended up working with that client almost exclusively for over a year. They paid me a nice monthly retainer, too, that was even a little bigger than the project fee I’d been earning.
But then something really interesting happened, as I was wrapping up with that client. I realized that all the projects I’d done best on had actually taken me a couple months to complete. Which was actually DOUBLE the fee I’d charged before working with this client.
But because I had even more successful promotions under my belt, I felt a bit more comfortable with that higher rate…
So the next time a project came along, I quoted this newly doubled fee… And, a few heart palpitations later, got it!
At this point, between the two doublings of my fee and the slight increase with the monthly retainer, I’d raised my fee roughly 5X from my initial fee I was charging as I started my full-time freelance career.
Was I getting better? Absolutely!
Was the investment in my services probably smarter at 5X the original fee? I think so.
But neither of those had driven the price increases. In all reality, it was simply because I offered a unique service (ME) that nobody else could match, that had enough demand from folks willing to pay the fee I was asking that it was easy for me to justify charging the higher fees.
Recently, I realized something. I’d been charging that 5X fee for a long time, and clients have been very happy paying it. It’s a good deal, if you’re the right kind of client for me.
But I have a lot of demands on my time, including client work and my own personal projects. And so the value I’ve placed on my time has continued to rise, even as the standard fee I was asking from clients has remained the same.
And so, I did what I’ve done a few times before — I doubled my fees.
(Now if you’re a client and you’re reading this and you’re thinking, “what the heck?!,” remember that you were happy to have me at my current fees! And I wouldn’t be charging these fees if I didn’t believe they represented a smart investment for the right clients — meaning, you!)
You’ll notice here I’m not too subtle about these price increases.
I try to always make sure that the client is getting more than I’m asking — and for the most part if we end up with a control together my current fee is an absolute pittance relative to what the campaign I create is worth.
But now to get me to sit down and put together a promotion or campaign, it’s a full 10X what it was when I went full-time in my copywriting business in 2010.
And this doesn’t even account for royalties, which also went up through time.
If you want to boost your profits, it’s always smart to look at ways you can raise prices!
One last case study before I say toodle-oo for the weekend. And I’ve written about this before, so I’ll keep this mention short.
In the context of a consultation with a client, I looked at their most expensive product, the biggest profit center in their business.
I asked the question that you know I love to ask…
“Would people be willing to buy this at a higher price?”
And we came up with a plan to test it.
The answer to my question, it turned out, was a resounding “YES!”
We bumped the price up by 29%, which increased the margin by 60%.
Even at this higher price, sales were constant. Meaning, when we raised the price, just as many people bought!
The net impact to the business was $500,000 per year at the volumes he was doing.
Since this initial price increase, we’ve also increased sales volumes. So the impact has grown.
Not only that, he’s embraced higher prices and is launching an even more expensive, higher-margin version of this product soon.
The 5-minute conversation that led to raising his prices will be worth a good $2.5 to $5 million — if not more — over a 5-year period. And that’s margin — NOT gross revenue.
It’s no more expensive to sell the products at a 60% higher margin, he just gets 60% more when he does so!
When you’re talking tiny hinges that swing big doors, this is one of the fastest, easiest ways to have a huge impact on the take-home profits you’re making from your business.
And when you’re talking a $2.5 million impact for a few thousand bucks investment today, it becomes a no-brainer to invest in me showing you how you can do this in your business.
Want me to show you where in your business you can raise prices to boost profits immediately?
It’s part of my process during our half-day consult to ask, “Why are you charging this much, and would you increase profits by testing different price points?”
The fee for this service goes up tomorrow at midnight — this is your last chance to get it at this price.
Have a safe and happy Halloween!
Yours for bigger breakthroughs,
Editor, Breakthrough Marketing Secrets