Take the current amount you charge, and multiply that by 2. Okay, that might be an oversimplification of the idea, but it’s probably more realistic than you think. One of the easiest ways to double your income or revenue, is to charge twice as much. I understand not every single company can just double what they charge, but the same principles still apply. Even if you can’t totally double, you can still probably raise them. The best part is, you get twice the money, without any extra work. Freelancers trade their time for money, so if they want to make any more, they have to work longer and harder to get there. You can only work so many hours a week before there aren’t any hours left. There are 3 major factors that determine sales revenue:
- Number of leads
- Close rate
If you increase any one of those numbers, then revenue goes up. If you aim to double all three, even if you only end up raising each by 10%, you will be able to boost revenue significantly without working much more than you already are. Charging more is a great way to make more without trading more time. Before you start coming up with excuses as to why this won’t work in your situation, just keep reading.
Can I really double my price?
The short answer is probably. When you can properly position your value to a customer and associate a dollar amount to that value, the sky’s the limit to what you can charge. I’ve heard all the excuses like “My business is so young we need to charge less to gain traction” or “I’ll lose all my deals to competitors if I charge more”, or my personal favorite, “My customers would never pay that much”. The truth is, if you’re any good at your job, none of those are true, you just need to sell better. When you sell your product or service following a bulletproof sales model, price objections are rarely an issue. In fact, I truly believe that the price is almost never a critical buying factor, even if they tell you it is. Here are a few examples to show you how possible this is.
Ex.1 – A top notch painting company charges on average 3k to paint the inside of a small home. The price is average so they don’t have to develop much value in what they do. They get 6 jobs a week totaling 18k per week. Then they implement a solid sales process that creates desire for their prestigious service, and develops an enormous amount of value by presenting each benefit of using them, and the consequences of using someone else. They raise their prices to 6k per project on average, and are able to get 4 jobs a week. Now they make 24k a week and actually work 33% LESS than they did. See how that works?
Ex.2 – A digital marketing agency sells websites for $4,000. They look great and function well. They focus on selling the product, how great they look and well they perform. They get 2 new customers per week for a total of 8k. Then they redesign their whole sales process. Now they review the product but sell the solution. Using their new sales process, they identify that the prospects current site is only converting 1% of visitors but could be converting 3%. They identify that that problem alone is costing them 87k in revenue per year. The firms website just became valued at 87k…per year. However, they are going to give a great deal, instead of charging 87k…it’s only 8k one time. Two deals using a process like that and they hit 16k per week. It’s really reachable if you change the way you think about your price.
Aim High, Fail Successfully
I understand this concept can not be implemented verbatim in every scenario. A veteran sales person at a well established tech company most likely can’t double his close rate. If it’s already 50% he would close at 100%, and that is extremely unlikely. If it is achieved, then the price is probably way too low. In this case, he probably can’t double prices either. 1. He might not have the authority to enforce such a dramatic change, and 2. The company is already charging premium prices in a competitive market that wouldn’t allow a dramatic change. This concept is meant to be scaled for individual situations. It’s just not realistic to say every business and sales person alive can double all three right now, but you would be surprised at how many can. If that salesman with a 50% close tries his hardest to double his rate and ends up at 70%, his c.r. is better than almost every sales person in business. If he achieves that and only a 10% possible price increase, but does double his lead gen, he still more than doubles his income. Set your intentions to double lead generation, closing rate, and price, and collectively you will almost always double your income even if all of them are partially achieved.
Do not let that term “dramatic change” fool you into thinking that you can’t pull it off. That is giving yourself an excuse of why you can’t do it. “My customers would be mad and leave”, “I’d lose all my bids to my competitors”, or the frequent, “My business is so new I need to be the cheapest so I can win enough deals to get things started”. Those are all just excuses that are causing you to work harder and make less money. The reality is you probably CAN actually double your prices and succeed. Before you actually do it, you need have the sales skills to convey your value and demonstrate differentiation. and you need to actually be able to deliver your product or service that is truly superior, meets the expectation of value you sold them, and provides more real-value to them than the money they gave you provides them. If you’re already the best in your market, then you only need to learn the best way to communicate the value you can provide them (aka selling) and you’re ready to double your price.
Take action TOMORROW. If you aren’t ready to actually double your price, try raising it just by 10% and see if anything changes. You’ll get the same objections you get with now, and get past them just the same. If you are selling your value well, a 10% increase will not change anything except your revenue.
About the Author:
PointOne CEO, Michael Lee, is dedicated to providing innovative sales training to reps worldwide. He focuses on using modern approaches to increase performance while improving the experience for the customer. Michael has worked in door to door, retail, dealership, home improvements, B2B, and more. “It’s time to stop running businesses and selling like it’s the 90’s, it doesn’t work well and just stresses everyone out”. Text him directly at 302-319-4722.