Increasing prices as funnel builders is something a lot of us struggle with. But what if I told you that you had a moral obligation to increase your prices?
In this blog post I’m going to explain the moral justification for increasing your prices, for your marketing funnel services.
What do we mean by moral?
First, we need to understand my frame of reference in regards to morals. “Morally good” or “morally justified” could mean very different things to different people.
Rather than try to write out a definition of morality on a marketing blog, in the space of a paragraph. I’ll instead pose a mission or objective.
Could you agree that if you had more money, that you would be able to do more good in the world?
If you had more income you would be able to pay more tax. That means you’re giving more back to the government and those that can’t turn. As well as paying for our vital services in our economy and society and communities.
If you had more income you would be able to share more of that income with staff, freelancers and partners.
If you had more, you’d share more
If you’re able to share more money with other people, they are able to contribute more into society via tax, purchasing of goods and services and perhaps their own staff and team.
There is often the tenuous link between rich people and a lack of morals. We often see wealthy and rich people as money hoarding, nasty and selfish individuals.
Why I don’t doubt that many wealthy people are wankers, I also know many poor people who are also wankers.
Money doesn’t change people. It simply accelerates who they already are.
If you are good with money, sensible with your spending and intelligent with your investing. Having more money will only make you more of those things. If you are reckless with money, a nasty person, selfish and a hoarder. More money will only make you more of those things.
So first, let’s understand that our framework of morality is based around who we already are as people, what we already consider to be moral and good and that earning more will only make us MORE of who we already are.
Why price is a question of morals?
One of the biggest objections I’m given when it comes to raising prices, is the little internal voice in our heads that says “but I don’t want to be too expensive. I don’t want to scam people”.
My answer to this is “are you planning on scamming people?”
How much you charge has absolutely nothing to do with whether you are seen as trustworthy or not. I’ve bought cheap $20 watches from dingy shops in Chinatown, only to have them break minutes later.
I’ve also been done out of $15,000 from a social media agency that told me they could do the job. If someone is going to scam you the price is irrelevant. I’m assuming that you aren’t planning on scamming people and that you want to do a good job.
Not many marketing funnel businesses have a strategy when it comes to their price. They don’t want to be the most expensive because they don’t think they can justify that. But also they don’t want to be the cheapest because they feel they have to make at least some money.
So many of them try to settle in the middle around the $2500 to $8000 range.Anyone who reads my content or knows me, knows that I believe the “middle range”, doesn’t really exist and is not a pricing strategy.
Instead, I’m going to approach our pricing strategy from a completely new perspective. We’re going to approach our pricing strategy from the perspective of moral strategy.
Think about the change that you want to see in the world. This doesn’t have to be enormous, humanity changing inventions. You don’t have to cure malaria, you don’t have to do eliminate Third World debt. But what about your education, your children’s education, your diet or your working situation.
What about hiring staff and knowing that you can help them with their families? What if you knew that you could hire three members of staff and help them pay for their kids education, family holidays and hobbies?
What does that cost you in order to give to somebody else? At $30,000 per year, three full-time members of staff will cost you anywhere up to $120,000 per year (if we include insurance, tax, new equipment, staff training, staff nights out and bonuses).
Your staff costs are built into your margin, which means you also have to account for your business overheads and project costs. For example if you have an office, you’ll need to hire office space for you in your for employees. That office has an office manager, office staff, an owner, landlord, probably a small canteen or sandwich delivery service like ours. You are now beginning to affect a wider game, by sharing your income with people that don’t even work for you.
The more money you earn, the more money you are putting directly back into the economy. As you can see, the scale at which you can impact the world grows massively, and compounds, the sooner you start to increase your prices.
This blog post isn’t about finding a $100,000 client, it’s about helping you change your mindset into one that says you deserve a $100,000 client. In fact, it goes deeper than that and suggests that you are morally obliged to find a $100,000 client.
Let’s look at this from another perspective. The perspective of the customer.
How to justify a price increase to customers.
With your marketing funnel business, do you think that it is reasonable that you are expected to solve a customer’s problem? Answer this out loud yes or no.
I’ll assume you said yes (otherwise what are you doing in the business?) so I want to ask you another question. If you solve a customer’s problem, is it reasonable to assume that they will benefit in some way from solving that problem? In other words are you making their life better? Again answer out loud, yes or no.
Do you also think it’s reasonable therefore, that if you solve someone’s problem, and improve their life somehow that you deserve to make a profit? Of course you do, you’re in business to make a profit.
Is it reasonable to ask if you solve two problems and get two benefits, that you deserve to profits?
What if you solve a problem and provide a benefit every single month? Do you deserve to make a profit every single month?
Finally, if you help someone solve a problem, and they benefit from it for the rest of their life? Do you deserve to make a profit from it for the rest of your life? I believe you do. And most customers that you ask these questions too, would agree.
Does this mean that the customer is going to have to pay you every single day, for a project that you’ve delivered 12 weeks or 12 years ago? Obviously not. But to generate enough of the profit margin, for you to be able to invest in your business to continually grow, from the initial benefit you delivered from the customer. I believe that is entirely justified and frankly, the only way to run a business.
Invest in your business to continually grow
One of the hardest things to do is to increase prices, to customers that have already paid a low price. However one of the biggest misconceptions, is that your customers will be angry that you increasing your prices.
I’ll probably do a post on the psychology of price soon. But very often our opinion of our self and our own self esteem, is tied to the prices that we charge. The prices that we charge often also dictate the prices were happy to pay other people for. Therefore, if your customers do become upset with you increasing prices, it’s more likely to be a reflection of their own self esteem.
In fact, we’ve had customers delighted that we are increasing our prices, because they know that we are increasing the value we give to them. If I was to just suddenly start charging $570 per month instead of $57 per month for an email data cleaning service. Yes, I don’t doubt that my customers would be pretty pissed off.
However when we five 5X’d our prices from $2000-$10,000 for a basic website. Most of our customers understood the increase and were excited to see what new benefits we can offer them.
Justifying your price increase to customers is as much about justifying price increased yourself. If you have a true conviction that your prices are worthwhile, fair and deliver outstanding value. Then you’ll never have a problem charging those prices to customers.
How to justify a price increase to yourself.
Stop thinking about price in terms of what YOU are and YOU deserve. Start thinking of price as a measure of how much you’re willing to give back into the economy, your community, your family and your own business.
I don’t believe that price is a question of talent, time in the market, skill or even quality of the product in some regards (although I wouldn’t recommend that as a product marketing strategy). The price you dictate is a direct reflection of what you’re planning to put back into the market.
It’s a question of your values and the morals you hold closest to you. Your services can help people grow their business. The more people you help, the more people they help.
It’s critical that you understand how important profit is to your business. Only with your profit, can you continue to grow your business and the businesses of others. Price isn’t a question of what you get, it’s a question of morals. Price is about what you’re going to give BACK to the world.