When times are hard, charge more! You’ll never win a race to the bottom.
This week I saw a movie at my favorite movie theater in Los Angeles.
It was refurbished just before lockdown and I got to see only 3 movies before it was closed for almost two years.
With new three-way, reclining leather seats, it’s like sitting in a Lexus. And you can have chef-prepared food and cocktails delivered to your seat.
I was chatting to the manager before the movie began. I told her that I was curious why they’d changed their prices from $27 a ticket, 3 years ago, to $12 today.
She replied that they had done a survey of their customers and the most common complaint was that the price was too high. So they’d reduced it.
“How did that work for increasing the number of customers?” I asked.
“Well, there are 4 people watching your movie and 5 people in the screening after you, so what do you think?” She replied, sounding a little sad.
Here’s how this applies to us, as coaches and consultants:
- Be boutique, word-of-mouth, expensive, not for everyone. And when times are hard, charge more. You’ll never win a race to the bottom.
- The more you charge, the more extraordinary your clients will be. Build your ability to charge more by regularly investing in coaches who charge more than you do.
- High net worth individuals are extremely cautious how they spend their money. So build your ability to coach extraordinary clients by creating opportunities for some clients to invest smaller amounts to work with you.
- Cash flow beats cash. The future lifetime value of a client can be worth far more than attempting to raise the prices on a great client. So don’t surprise your best clients by raising their fees in order to build your confidence. You can destroy a great relationship in minutes by doing this. There are many more ways to be paid than just cash. You’re paid in referrals, testimonials and by growing your confidence and your competence.
- If you want to raise your fees, start by increasing your value. Worry less about marketing, sales, differentiation or pricing and put your attention on how to massively increase the value you deliver to each client.
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