How to raise your prices without raising your prices

In their book, Mass Affluence, Paul Nunes and Brian Johnson identifiy three strategies
their research revealed as viable for helping all marketers capitalize with the
moneyed masses.

And make no mistake, there are moneyed masses – despite what we hear in the news
everyday. All you need to do is employ marketing strategies that give customers
a chance to spend more.

Remember , your customers buy what they want to buy. Your job, as a marketer, is
to make sure you create value they want and are willing to pay for.

So here’s what the research revealed in a nutshell:

1. Give customers the chance to spend more. Offer new premium versions, adding on
product upgrades and differentiated service levels to existing offerings.

2. Honour customers with the recognition they desire. Create status levels that
reward willing-to-spend customers.

3. Offer the right price to the right customer.

For today, let’s focus on the first strategy.

If you are unwilling to raise your prices for your products and/or services, try
creating premium and deluxe versions of the same products and services offered
optionally, at a premium price.

Here’s why:

In almost every case, if a premium or deluxe version of a product or service is
available, no less than 5% to 20% of your existent or traditional customers will
opt for it.

Since the profit margin built into the premium version is usually substantially
greater than in the basic offering, the 5% picking the premium can actually create
a 50% or 100% increase in profits from the same number of units of sale.

Take the “concierge ” floor at a hotel for example. Typically, the rooms may or
may not be slightly larger or better turned out but still, they all have a bed and
a bath and require the same linens, towels, maid service, and electricity; key access
in the elevator (added cost: zero); a lounge with continental breakfast and evening
snacks (cost: a few bucks per guest); and two newspapers outside your door.

The price difference may be anywhere from 20% to 50% of the basic room for those
who want the “special” treatment. But the added cost may be 2% to 5%. That differential
item, the upgrade, carries a much higher markup than does the basic room.

Here’s another example:

Say you’re a business coach. You offer one-on-one coaching sessions for a set fee.

Your client can opt for your basic program or take advantage of your premium membership
coaching program that includes the one-on-one coaching sessions and a monthly group
coaching session via teleseminar featuring a  special “guest” coach on a specific
topic followed by a Q&A.

You offer the premium program at an additional 25% markup. The teleseminar cost
is minimal. These days, most attendees expect to pay the LD costs. Your “guest”
will be happy to trade his or services for the exposure to your clients. (cost:
zero)

Presenting to one client or twenty five has a minimal impact on your costs. You
pay for the extra lines but the impact of the 25% price differential makes that
insignificant.

Does your business lend itself to this approach of including premium offerings?

If so, you may be on the verge of discovering a strategy you can use to significantly
boost your profits.

Gerry Black is a marketing writer based in Toronto, Canada who works with clients in Canada and the US.

The Selling Power Of The Monkey’s Fist Approach

Many marketers miss out on profits because they try to take a selling shortcut that almost always fails. They proceed directly to their offer instead of taking time to develop the “know, like and trust” factor that is almost always required before a sale can be made.

The website version of this is a marketer who simply lists products and services and expects the prospect to read the list and call up to order.

Marketers who use this one-shot approach are almost always disappointed in their results.

Thanks to master copywriter Gary Bencivenga for today’s lesson. The universal law of selling identified below is your key to higher profits.

In every sale, either in person or in your marketing efforts, there are at least two sales that have to be made, not just one. This is true of anything you sell, and the sooner you realize this, the sooner you can become a master at selling anything, in person or in your sales copy.

The main sale, of course, is the product or service you ultimately want to sell. But before you can even get a chance to sell your main product, you must first sell your prospect on giving you an audience.

That is known as the sale before the sale. In short, you must sell the chance to sell.

Legendary life insurance salesman Frank Bettger used this principle to become one of the greatest salespeople who ever lived. Bettger was such a crummy salesman that he came close to quitting before he stumbled upon one of the most powerful strategies for selling anything.

On a vacation, while standing on the deck of a ship about to dock in Miami, Bettger noticed that the ropes needed to moor a great ship to the dock were tremendous. They were  very long and as thick as a man’s thigh. He wondered how any seaman, no matter how strong, could ever lift such a thick rope, let alone hurl it so that it would reach the pier.

So he decided to watch how it was done…

He discovered that the crew doesn’t even try to throw the heavy rope, known as a “hawser.” Instead, he saw a solitary crewman hurl a little iron ball, called a “monkey’s fist,” which was attached to a thin rope about the size of a clothes line. He tossed this monkey’s fist to a longshoreman standing on the pier, waiting to receive it. When the longshoreman caught the little iron ball, he started to haul in the thin rope attached to it. This thin rope, in turn, was attached to the huge hawser, which Bettger then saw moving through the water as the fellow on the dock hauled it in.

And that’s how the big, unwieldy hawser gets tied to the moorings on the pier.

Throwing the hawser was too big a first step for any sailor, just as it’s too big a first step for any marketer to approach ice-cold prospects and instantly persuade them to buy.

So this is the little-known but amazingly reliable formula for opening – and then closing – many, many more sales, in person or online. Make the first step for your prospect irresistibly easy to take.

Resist the temptation to start off trying to sell your product. Break it into smaller steps. As a first step, offer something that makes it easy, irresistibly easy, for your prospect to say yes.

There are countless ways you can achieve this gentle, seductive first step in your marketing. 

I have found that offering valuable, free information that targets your prime prospects is the most versatile, economical and usually most effective execution of this strategy. It works so well because it not only makes it much easier to open the sale with your best prospects, but also sets you up perfectly to close it.

If you sell a course on Internet marketing, you can offer a free e-book such as, “The 100 Most Successful E-mail Advertisements Ever Written.”

If you manage a real estate office in, say, Huntington Beach, you can offer a free “Trend Report – Sale Prices of Huntington Beach Homes, Condos and Co-Ops over the Last Six Months.”

If you’re a chiropactor, you can advertise a free guide, “My Seven Best Secrets for Having a Pain-Free Back in Just Six Weeks.”

If you sell a course on public speaking, you can offer a free CD, “Secrets of Getting a Standing Ovation Almost Every Time You Speak.” 

All these examples “throw the monkey’s fist” – they make it much easier for prospects to lower their guard, give you their time and allow you into their busy lives. This is how you make the sale before the sale.

It’s the same as courtship. You would never dream of walking up to a total stranger and asking him or her to marry you. The first step might just be a flirtatious conversation, which leads to a date, which leads to more dates, which lead to an engagement, which leads to a marriage proposal, which leads to a lifelong relationship. Trying to race to the ultimate destination from an ice-cold start just won’t work.

Romance your prospects in the same way. Make the first step easy, non-threatening, enjoyable, irresistible! Then make the next small step the same way, and keep going until you’re both in love. 

Gerry Black is a marketing writer based in Toronto, Canada who works with clients in the U.S. and Canada.

Are you selling what your prospect wants?

Have you ever given some deep thought to what it is your clients are actually buying when they decide to do business with you?

Sure they buy your services and products but I mean do you have a clear understanding of what problem they are looking to solve or what need they are looking to fulfill?

As business owners, this is an important question to consider if we want to maximize the effectiveness of our marketing .

So how do you find out what they’re thinking?

Simple. Ask them. Explain in an email or on the phone that you are revising your marketing plan and wondered if they could help you understand, in a sentence or two, the value your service offered them.

Here are a couple of unedited answers I got when I did it.

The most important ‘value’ I received from working with you Gerry was time. Time allowed me to concentrate on my business (using my entrepreneurial time wisely) while you used the info I gave you and weaved it into the ideal website for my business. Time management is something I support my clients with and I truly know the importance of delegating. In essence, that is what happened between us. You were the expert in copywriting and I have learned over the years to delegate to the ‘expert’!

You helped us give voice to the value of the services we provide with a consumer-orientation that helps differentiate us from others. You also offered the potential of a follow-up system that other marketing service providers did not offer or did not have a clear vision of its value. Your availability and follow-through is particularly appreciated.

When you analyze their responses, you can see they were “buying” different benefits.

The first found marketing very time consuming and unfulfilling. Why? Simply because that’s not this particular client’s area of expertise. In her case, she’s capable. But she determined that she would spend far more time trying to get a handle on creating an effective marketing message and strategy  if she tried to do it herself.

And whatever time she could find was not of a quality that would allow for the timely creation of an effective selling story. It was crammed into and around other aspects of running her business. She determined she would be missing opportunities if she tried to do it herself.

In the second example, the client simply realized he needed to stand out from his competition. He’s in a real “me-too” industry. The economy is playing having with his industry. His competitors all say the same thing so of course, when that happens, it always comes down to defending prices. He didn’t want to play that game so he decided not to.

You’ll notice he didn’t even mention time. In his mind, as soon as he decided he needed some help, he made an instant decision to find someone to help him.

By asking our clients why they bought from us, we can take their responses and build our marketing message around them.

With some careful content creation on our websites and in our other marketing communication, we can make sure we mirror back this value in such a way that anyone considering our products and services will clearly see it and choose us over our competitors.