In this empowering episode of Black Entrepreneur Blueprint, host Jay Jones unveils the elusive yet essential formula for raising your prices and amplifying your profits without encountering resistance from your customer base. Jay uncovers the common dilemma of undervaluing your products or services and, consequently, leaving substantial revenue on the table. Through expert insights, Jay equips listeners with the tools to break free from this profit-limiting cycle.
Tune in to episode #505 as Jay shares actionable strategies designed to empower entrepreneurs to take control of their pricing structures and unlock untapped revenue streams. With a keen focus on maximizing profitability while maintaining customer satisfaction, Jay offers a blueprint for success that transcends traditional pricing paradigms. Whether you’re a seasoned business owner or just starting out on your entrepreneurial journey, this episode is a must-listen for anyone seeking to elevate their pricing strategy and propel their business to new heights of success.
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BLACK ENTREPRENEUR BLUEPRINT SHOW NOTES – EPISODE # 505
Are you charging enough for your products and services or leaving too much money on the table? That’s the question many entrepreneurs struggle with. On today’s show, I’m going to divulge and decode the simple formula that will allow you to raise your prices, make more money, and be more profitable without your customers complaining.
First, you must understand the definitions and relationship between price and perceived value.
Price – is what you pay
Perceived Value – is what you get, or what you perceive to get
If your price exceeds the perceived value you will not make sales, but if your perceived value is greater than the price you make sales.
The Formula is: Higher Pricing + Aligned Perceived Value = More money and more profit
Many entrepreneurs don’t feel comfortable with charging a higher price for their products or services in fear that they will not make sales. But what if you are leaving thousands of dollars of revenue on the table each month?
The two key words you need to know are: aligned and supported.
Your pricing and perceived value must be aligned and supported. What do I mean by aligned and supported? Your pricing and perceived value must match both the alignment/presentation of your products or services and the support material around your product or service like testimonials or free trials.
Example: Two mortgage brokers cater to million-dollar home buyers and have a referral program to generate more leads. Mortgage guy # 1 has flyers that he drops off at real estate offices. Mortgage guy # 2 has a partner portal on his website that allows realtors to refer clients by completing a short form. This portal has realtor testimonials videos and gives an immediate email response thanking the realtor for the referral and automatically and the software keeps them updated on the loan process. What mortgage broker is aligned with his market and supports his product or service better?
Example: If you are a high-end watch company like Rolex, how do they align their pricing and perceived value? They are only sold in high-end locations and their website and advertising are catered to wealthy individuals that can afford their product. The product is perceived to be made with the highest quality and precision which justifies the price. The pricing and perceived value are aligned.
What happens to most businesses when you increase prices that are not related to economic or industry fluctuations?
They lose money and customers. The reason why is that the price increase is aligned with the product and not supported by the perceived value of the product (ie, testimonials, upgraded product or service presentation, etc)
How do you do this?
- Your price vs perceived value must be aligned
- Your messaging must be aligned
- Your brand or product image must be aligned and professional (website, other materials)
- You understand your audience/customers’ wants and needs
- You understand what motivates people: Three things motivate people:
move away from pain or move towards pleasure or status (like buying a Rolex- tells the same time as a timer but people buy for the status) so if you’re business is solving a problem, or you start a business around something you’re passionate about, or you can sell to peoples egos by selling something that speaks to a status as the luxury brands do
