Episode 489 – How to Charge Premium Prices & the COST of Going Cheap
Here’s a common issue in cleaning businesses: If you charge enough to make fair wages, you lose jobs to lowball competition. If you meet the lowball competition, you go broke. Either you grow but just do more work with no money, or you shrink and still lose money. Today we’re going to discuss how an underlying cause of these issues is sometimes the beliefs and mindset we have around these issues. Let’s dive into this!
False Belief: People want what’s cheap
People want a RESULT and don’t want to get taken advantage of. People don’t want to waste money. They’d rather pay more and get what they want than pay less and not get results!
False Belief: It’s immoral to charge “too much”
Here’s what’s actually immoral:
- It’s immoral to lie about what you charge
- It’s immoral to do a sloppy job because there isn’t enough money
- It’s immoral not to get the result of what you promise the customer
- It’s immoral not to have insurance or to break the law because you don’t have enough money
- It’s immoral to take your time from your family and NOT provide for them
There’s a lot of immoral things but charging more isn’t one!
False Belief: People see expensive as bad
The RIGHT people ONLY want expensive. They know that typically the expensive option is WORTH IT. Cheap people don’t care about results and are just worried about price. Think of it this way: premium price = premium results.
False Belief: Your people will like you better if you charge less
The RIGHT clients will RESPECT you when you charge enough. EVERYONE will take advantage of you when you charge too little.The right clients will understand that higher prices mean you are offering a premium service. They’ll understand that you’ve taken care of things like insurance, not hiring criminals, being legal, etc.
False Belief: If I charge too much, I won’t get any clients and will go out of business
NO ONE EVER went out of business for charging too much, HOWEVER people go out of business ALL OF THE TIME for not charging enough! Charging higher prices allows you pay more for marketing, insurance, investing, supplies, etc. Otherwise there’s no option to be able to pay for these extras, since you’re not charging enough in first place to have more money to invest back into your business.
False Belief: I can only raise prices a certain percentage- over that is “too much”
It’s your duty to your company to charge the RIGHT amount.
False Belief: If I raise prices, my customers will leave
As we have walked people through this, more people ask “What took you so long?” than quit! We find that when companies raise their prices, generally only 0-10% of the clients quit, 30% will complain but stay on, 30-50% will not say much and 10% will say they were waiting for you to do it and were ready to pay more.
To sum it all up, first work on your MINDSET around the false beliefs we have mentioned to get yourself ready to raise your prices. Keep in mind that when you price right, you set yourself up with enough money to build systems, attract the RIGHT clients, go above and beyond and make all of this work WORTH IT!
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