One of the easiest ways to boost your profits right now is to raise your prices and to create unique bundles and offerings that your clients and prospects cannot find elsewhere. When there is no possible way to compare apples to apples – their decision is no longer based on price.
Provide them a unique experience and offering, especially one exclusively available from you, and you can warm up the cash register because it going to start smoking!Take, for example, Coach on Madison Avenue in Manhattan. They sell high end ladies handbags. At least, they were once considered high end – after they started testing what “high end” really is… they got a welcome surprise.
[Forbes. Jan 07] In the past, their average handbag sold for $300. To me, that sounds like a higher end purchase (to my wife – that’s an quick stop for lunch and “ooooh – look at THAT purse!”… she IS a purse-aholic and is darned proud of it. I’m not.)
Lewis Frankfort, the Coach CEO thinks the way is to go upscale – and the numbers are proving him right.
Common purchases now:
– a $1,300 sweater coat
– $700 JEANS!
– $2,500 satchel
– $4,500 lime-green ostrich-skin bag
– $10,000 tobacco color
Ali Alligator shoulder flap bags (get this: they quickly sold all 8 of these… much quicker than they would have guessed)To add to this, Frankfort was also quoted saying “the market for Coach is now a lot larger than we ever contemplated”. Their average ticket price is now 48% more than it used to be – and it their new program for higher end offerings now constitutes a solid 18% of total revenues (this is in the first YEAR of roll-out, in a $2 BILLION dollar corporation!)
SO, WHAT DOES ALL THIS MEAN TO YOU?
Chances are good, you are under-pricing yourself. I know that I way undercharge for some of my products and services! Especially when you factor in the returns my clients get with a hot selling sale campaign.
One of the fastest growing segments out there is among the “mass-affluent”. This group pays for the experience – and will pay a premium if treated right.
Again… and again.
Give them the experience and selection they want and can pay for, and they will be yours for life.
So find ways to raise your prices, bundle them differently, roll out a higher end offer, limit production or reduce the number of clients you take on. It really isn’t any harder to sell a $1,000 item than a $100 one.
In many cases, it’s actually easier and with much less hassle.
Give it an honest 6 month test of higher end products and services, and compare the numbers. You may have had lesson quantity of purchases (or maybe not? Won’t know until you test it). But I am willing to bet your revenues and definitely profits will skyrocket.
What do you think? Is a simple test worth a 48% boost in your pricing? I think so.