Transcripts
Welcome to Live With The Pricing Lady.
Speaker:I'm Janene, your hostess.
Speaker:This show is all about helping you build a sustainably profitable
Speaker:business while making an unbelievable impact on your world.
Speaker:Learn from my 20 years of experience and from my guests as we discuss their pricing
Speaker:challenges, failures, and successes.
Speaker:Pricing is a way of being or behaving in your business.
Speaker:My mission is to help you confidently charge for the value you deliver.
Speaker:Pricing is either hurting or helping your business.
Speaker:Let's make sure it's helping you reach your dreams
Speaker:In this episode of Live with The Pricing Lady, I'm talking about the three myths
Speaker:that keep you from raising your prices.
Speaker:Sit back, relax, and enjoy the episode.
Speaker:I'm super excited because today we're talking about one of my favorite
Speaker:topics, which is raising prices.
Speaker:Yay.
Speaker:In fact, we're going to be talking about what stops you from raising your prices.
Speaker:One of the things that I see all the time, especially with small businesses, with
Speaker:coaches, consultants, solo entrepreneurs, freelancers, is that you guys get stuck.
Speaker:There'll be signs everywhere that you should raise your prices and
Speaker:in your head, you'll be telling yourself it's not possible.
Speaker:So we're going to take a look at the three myths that hold people back when it comes
Speaker:to raising their prices the most often.
Speaker:Let's get started.
Speaker:Myth number one -is you believe that people will think you are greedy.
Speaker:If you raise your prices?
Speaker:Now I see this, especially with you ladies.
Speaker:Yes.
Speaker:I hear this quite often from your ladies.
Speaker:You say, I don't want to be seen as being greedy or you'll say
Speaker:I don't care about the money.
Speaker:And you should care about the money.
Speaker:My friend.
Speaker:Definitely care about the money.
Speaker:Money is important when you're running a business, but just because you're raising
Speaker:prices, it does not make you greedy.
Speaker:That is a very important statement.
Speaker:I want you to take to heart.
Speaker:Just because I raised my prices does not make me greedy.
Speaker:There's a couple of things here that I want you to remember.
Speaker:First of all, Don't care so much about what everybody else is thinking.
Speaker:This is really important.
Speaker:You need to do what's right for your business for yourself
Speaker:and for your customers.
Speaker:Second over the life of your business, you will absolutely 100%.
Speaker:I can guarantee you will need to increase your prices.
Speaker:You'll probably need to do so regularly.
Speaker:It's a really important that you come to terms with that as something you are going
Speaker:to have to do it to your business and stop making up stories about how people are
Speaker:going to think I'm greedy in order to deal with the fear that you feel around it.
Speaker:I'm going to give you some tips later on about what you can do
Speaker:to help work through that fear.
Speaker:But first you need to have a real talk with yourself about not letting
Speaker:these types of statements and fears get in the way, especially
Speaker:this one around being greedy.
Speaker:Now, let me be very clear if you are raising your prices because you
Speaker:want to take advantage of people.
Speaker:We saw that quite often, during COVID days, certain businesses who are very
Speaker:unscrupulous, raise their prices in order to take advantage of people.
Speaker:Of course, this is a big, no, no.
Speaker:But in the course of a business and the cycle of your business, you
Speaker:are going to need to raise prices in order to maintain your profits.
Speaker:Because you bring more value than you did before because the market
Speaker:prices have increased and you want to at least stay along with that.
Speaker:For those three reasons alone, you are going to need to raise prices over time
Speaker:and doing so for those types of reasons.
Speaker:Absolutely.
Speaker:Positively does not make you greedy.
Speaker:It makes you a smart and savvy business owner.
Speaker:Myth number two.
Speaker:If I raised by prices, all my customers will run away.
Speaker:So when I think of this one, it always makes me laugh a little bit.
Speaker:Because I think of the film kindergarten cop with Arnold Schwartzenegger and
Speaker:during that film, they have a fire drill at the school and his classroom.
Speaker:The first time they do the fire drill goes into utter chaos and there's kids
Speaker:running around and screaming enough.
Speaker:And running for the door fire drill.
Speaker:That's what I think of, you know, the myth that you're telling yourself is
Speaker:that there's going to be this mad dash for the door, from your customers,
Speaker:just because you raised your prices.
Speaker:And I can tell you that rarely if ever happens, and especially in the
Speaker:types of businesses that most of you had the very, very low, if not, no
Speaker:risk at all of this being the case.
Speaker:Now, if you were doubling or tripling your prices.
Speaker:I can see where you might be more concerned about that, but if you're
Speaker:thinking 10, 20, 30% increases that there's very little risk.
Speaker:That of course I must caveat.
Speaker:I don't know anything about your business or where your positioning is now, and
Speaker:that is relevant, but rarely is it going to lead to a mass outflux of customers?
Speaker:More importantly, if you go about increasing your prices in the right
Speaker:way, if you believe in it, if you understand why you're doing it and have
Speaker:concrete justifications in your own mind as to why it's needed and necessary,
Speaker:or why it's the right thing to do.
Speaker:Then you're going to feel more confident and be able to
Speaker:communicate it more effectively.
Speaker:And then you're going to be able to mitigate.
Speaker:Who leaves and that's where this gets really interesting.
Speaker:So price increases can be an effective way to get rid of some of your most
Speaker:difficult and lowest paying customers, which can actually be a real advantage.
Speaker:So just because you raise your prices.
Speaker:There is a chance.
Speaker:Some customers will leave, but if you do it right, you can actually
Speaker:have some control or something or managed to some degree, which ones
Speaker:of them will leave and make sure it's the ones that you want to see go.
Speaker:And not the ones that you don't, you can't control that a hundred percent, but you
Speaker:can actually steer, you know, steer things in a direction that works better for you.
Speaker:And a lot of times we will use pricing increases in order to weed out the
Speaker:customers that are difficult or who don't really value what we offer.
Speaker:So stop thinking that all your customers are going to have for
Speaker:the door and start thinking about what's the best way I can do this.
Speaker:Get the additional money or value that I need.
Speaker:Without disrupting the business, you can take clear steps to be able to do that.
Speaker:Miss myth.
Speaker:Number three is it's really hard to do.
Speaker:So why even bother.
Speaker:Yeah.
Speaker:So this is another one and I have to confess that pricing specialists and
Speaker:experts by itself, we tell people all the time how difficult it is to raise prices.
Speaker:If you don't position yourself well, at first, it can be very
Speaker:difficult to do and this true.
Speaker:It can be more difficult (raising prices) if you're not
Speaker:positioned properly to begin with.
Speaker:Or if you wait too long to make the necessary changes.
Speaker:It can be more difficult.
Speaker:But it does not make it impossible.
Speaker:And you telling yourself it's really hard to do.
Speaker:Is just you avoiding facing doing the work that's needed in order to
Speaker:feel more confident about doing it?
Speaker:So these three myths, right?
Speaker:Being afraid that other people will perceive you as greedy being
Speaker:afraid that your customers were awfully and just burying your head
Speaker:in the sand because you think it's too difficult to do are all myths.
Speaker:And you need to stop accepting.
Speaker:Those as excuses for not doing what you know needs to be done,
Speaker:which is raise your prices.
Speaker:I'm going to talk in a moment about what are the three things that you
Speaker:can do, so you feel more confident about raising their prices before I
Speaker:do that, I want to share with you.
Speaker:I have a new guide available is called the price check guide.
Speaker:When was the last time you raised your prices?
Speaker:Do you expect you should.
Speaker:But aren't clear why you can use this price check guide to understand
Speaker:if there are signs that tell you your prices need to change.
Speaker:And really we're talking mostly about price increases, but for some businesses
Speaker:you may choose, or for some parts of your business, you may choose to lower prices.
Speaker:And this guide helps walk you through that process.
Speaker:It's just 15 Franks.
Speaker:So it's not going to break the bank for you to get it out, check it out.
Speaker:Out is a really great guy to help you get started, to feel more confident
Speaker:about the changes you want to make.
Speaker:You can grab a copy of that guide at The Pricing Lady dot com.
Speaker:Backslash price dash check bash guide.
Speaker:I'll also put that in the show notes for you.
Speaker:So I said, I was going to share with you three things that I think are
Speaker:the steps that you need in order to have a robust plan for your
Speaker:price changes to be more effective.
Speaker:The first step is you gotta do the research and that's where
Speaker:the price check guide comes in.
Speaker:If you do the research and you understand what the signs are that make
Speaker:this (price change) necessary, you're going to feel more confident about it.
Speaker:Let's pretend for a moment you have a hair salon.
Speaker:You're a hairdresser.
Speaker:And you find out, your rent is increasing for your, the salon rental.
Speaker:The energy costs are going up, power and water have increased.
Speaker:The consumables that you use, like shampoo and conditioner and hair creams
Speaker:and treatments and colors, all of that has increased in price as well.
Speaker:And over the last four years, five years, you've noticed that your competitors have
Speaker:raised prices, but you've done nothing.
Speaker:All of those are signs it's time for you to raise your prices.
Speaker:What I've seen time and time again, is people ignore those
Speaker:signs because they're afraid.
Speaker:Because of these stories or these myths that they're telling themselves,
Speaker:again, the price check guide can help you to do that research.
Speaker:In that guide, I walk you through how to look at it and analyze the market
Speaker:and your business so that you can see if there are signs that say, yes, I
Speaker:need to make a change or no, I don't.
Speaker:If it's unclear, then you know where to go look.
Speaker:At, you know, which aspects to look at, to see if there are signs.
Speaker:So do the research at step number one, understand are there signs
Speaker:that my prices need to change?
Speaker:Step number two is to do the math.
Speaker:Now, I know some of you are going to hate this one cause you don't like math.
Speaker:But here's why this is so important.
Speaker:If you're that hairdresser and you came to me and you said, you
Speaker:know, Janene, my rent is going up.
Speaker:And I said, okay, And you say, but I just want to raise my prices 10%.
Speaker:And I say to you, okay.
Speaker:Is that going to give you the same profit as before less profit or more profit?
Speaker:And you say, I don't know.
Speaker:Then you're raising your prices without understanding if you're able
Speaker:to overcome the costs of your rent increase, with your price increases.
Speaker:In order to ensure that you are going to be able to be at least as
Speaker:profitable, if not more profitable, which is usually your goal.
Speaker:Right.
Speaker:You need to do the math.
Speaker:You also need to consider, okay.
Speaker:With these prices, maybe 5% of my customers might choose to go
Speaker:somewhere else if I increase.
Speaker:That means I have less volume.
Speaker:And you got to see, okay.
Speaker:What does that mean?
Speaker:In terms of my profitability?
Speaker:If I lose 5%, even though I'm charging more.
Speaker:Will that result in me making less money, the same money or more money.
Speaker:That's why I say you have to do the math.
Speaker:Math is really important.
Speaker:And.
Speaker:You should always do kind of okay.
Speaker:If I keep my prices the same.
Speaker:If I change my prices like this, and maybe you have two different versions
Speaker:of price changes that you want to do.
Speaker:Then you can run the scenarios with the two different versions.
Speaker:Do the math... do the math, do the math.
Speaker:Do the research, do the math.
Speaker:And the last one is communicated effectively.
Speaker:Not all businesses will need to make a price communication.
Speaker:That is something that you will have to think about
Speaker:what's right for your business.
Speaker:Typically businesses where you have repeat customers.
Speaker:You may want to communicate prices formally or price changes formally
Speaker:and in businesses where you're not having a lot of repeat customers,
Speaker:but you're basically selling to new clients or new types of customers.
Speaker:Then there's often less of a necessity for making a price in communication.
Speaker:I can't tell you what's right for your business or someone else's
Speaker:without understanding more about it.
Speaker:One of the points I want to make is that.
Speaker:You can have the right price changes, but if you communicate them
Speaker:poorly, It will not be successful.
Speaker:It will fail.
Speaker:A lot of times when we see people, businesses making price changes,
Speaker:and then you hear it didn't work.
Speaker:Oftentimes it's because they didn't communicate it well, I recently
Speaker:got a notification from Canva.
Speaker:One of my favorite apps ever that my price is basically tripling.
Speaker:It was a real ouch for me, I thought, oh, wow, triple that's a lot.
Speaker:Now I love the tool.
Speaker:And I still think it's a good deal, even though the price is tripling, but I read
Speaker:through the price communication, and it was very clear what their strategy was.
Speaker:I was like, well, I may not like it, but I can't argue with that logic.
Speaker:I can't argue with that.
Speaker:So your pricing, new communication has to be aligned with the changes you're making
Speaker:and it needs to make sense and logic.
Speaker:But most people try to do is they try to tell a sad story.
Speaker:Like I have to do this and I have no choice because my costs are going up.
Speaker:I don't personally find that as the best way for most businesses
Speaker:to communicate a price change.
Speaker:There's one exception.
Speaker:If your strategy and pricing is to be the low price leader.
Speaker:Then what your customers value for, from you is getting the lowest price.
Speaker:The value is the price.
Speaker:Therefore you would be communication.
Speaker:Your communication on the price change would be focused on that value, which is
Speaker:the lowest prices, but in most businesses, and most of you who are following me.
Speaker:You are not in this category of trying to be a low price leader.
Speaker:So the value is not the price.
Speaker:The value is what people are getting for that.
Speaker:And I think is a better strategy in your communication to lean into the value,
Speaker:rather than telling a sad story about how inflation is affecting your business.
Speaker:That's how I. Perceive it and what I advise many of my clients.
Speaker:That is what I wanted to share with you today.
Speaker:So I want you to take a moment and think be honest with yourself.
Speaker:Are these, or some other myths that you are saying in your head and
Speaker:telling yourself, are they keeping you from making the price changes?
Speaker:You know, you need to make.
Speaker:Head on over to The Pricing Lady dot com, grab a copy of the price check
Speaker:guide, and also know that later this fall I'm going to be running my raising
Speaker:prices course or program actually.
Speaker:And I would love for you to join me.
Speaker:You'll get more on that to come in the future.
Speaker:I wish you a great day and as always enjoy pricing.
Speaker:Thank you for listening to this episode of Live with The Pricing Lady, the podcast.
Speaker:If you enjoyed the episode, rate, review, and subscribe to it, then share
Speaker:it with your friends and colleagues.
Speaker:I love hearing back from you listeners.
Speaker:If you've got comments, questions, or topic ideas, go on over to thepricinglady.
Speaker:com and contact me there.
Speaker:Not sure where to start when it comes to improving pricing and profits?
Speaker:At ThePricingLady.
Speaker:com you can download a copy of my Self Assessment Pricing Scorecard.
Speaker:Find out where it's going well and where you can begin improving.
Speaker:Or just simply book a discovery call with me.
Speaker:There we can discuss what's up with pricing in your business and
Speaker:how I might be able to help you.
Speaker:Thanks once again for joining.
Speaker:Remember, pricing can hurt or help your business.
Speaker:Let's make sure it's helping you reach your dreams.
Speaker:See you next time and as always, enjoy pricing.