The Brainy Business | Understanding the Psychology of Why People Buy | Behavioral Economics

354. Discover the Secrets to Successfully Increase Prices for Your Business (Refreshed Episode)

Jan 2, 2024

Ask episode

Chapters

Transcript

Episode notes

In this episode of The Brainy Business podcast, host Melina Palmer dives deep into the topic of raising prices for businesses. Melina shares insights on the psychology behind pricing decisions and emphasizes the importance of understanding the value and context for customers. She provides practical strategies for overcoming mindset blocks and gaining confidence in quoting prices to potential clients. By drawing on examples from various industries, including retail and service-based businesses,

Melina offers valuable advice on how to navigate the process of raising prices effectively. Her approachable and practical guidance, combined with real-world examples, makes this episode a must-listen for entrepreneurs and business owners looking to increase profitability and overcome the fear of raising prices. Whether you're a seasoned entrepreneur or just starting out, Melina's expertise and relatable storytelling style provide actionable insights that can help you take the next step in growing your business. So, grab your headphones and tune in to this episode to gain the confidence and strategies you need to successfully raise prices and drive your business forward.

In this episode:

Optimize your pricing strategy for profitability.
Understand the key factors driving pricing decisions.
Overcome mindset blocks to confidently raise prices.
Target the right demographic for your pricing structure.
Enhance the perception of value in your pricing.

Show Notes:

00:00:00 - Introduction

In this episode, Melina Palmer introduces the topic of raising prices and discusses the relevance of the fresh start effect. She also mentions her upcoming book, The Truth About Pricing, and the importance of understanding the psychology behind pricing. 00:03:05 - The Possibility of Raising Prices Melina emphasizes that raising prices is possible for any business, regardless of industry or competition. She highlights the importance of considering your own brand, costs, and goals before making any pricing changes. 00:07:09 - Overcoming Mindset Blocks Melina discusses the fears and mindset blocks that often hold business owners back from raising prices. She provides examples, such as being overbooked or not making enough profit, and suggests strategies for overcoming these blocks. 00:09:17 - Targeting a New Demographic When targeting a new demographic, Melina advises that a business may need to raise prices to appeal to the right customers. She encourages businesses to embrace the idea that not everyone will be a fit and to focus on providing value to the customers who do align with their offerings. 00:11:03 - The Value of Higher Prices Melina explains that higher prices can create a perception of higher value. Customers often derive more satisfaction and perceive greater effectiveness from products or services they pay more for. She uses examples like expensive jeans to illustrate this concept. 00:15:28 - The Variable Pricing of Soda The price of soda varies depending on the location and context of the purchase, such as in grocery stores, movie theaters, and fast-food chains. Understanding why customers are willing to pay different amounts for the same product in different locations can help businesses determine their pricing strategies. 00:16:18 - Questionstorming for Pricing Strategy Asking thought-provoking questions, such as "What would happen if I charged ten times more?" and "What would make people happy to pay ten times more for this?" can help businesses reassess their value and find ways to add more value to justify higher prices. 00:18:48 - Phased Approach to Price Increase for Service-based Businesses Service-based businesses can raise prices for new clients immediately and gradually phase in the price increase for existing clients. This allows for a smooth transition and can be done based on existing contracts or by offering pre-commitment discounts. 00:21:45 - Responding to Customer Reactions When communicating a price increase to clients, it's important to be understanding and helpful. Having a plan in place for handling discount requests or threats to leave can help maintain price integrity and ensure that the new pricing aligns with the overall brand and strategy. 00:23:46 - Context and Competition for Product-based Businesses Product-based businesses need to consider the context in which their products are priced, such as the competition and the overall shopping experience. Understanding the value and differentiation of your product can help justify the increase. 00:30:42 - The Importance of Understanding Customer Difficulty It's crucial to recognize that what may come easily to you, such as marketing or technology, can be challenging for others. To effectively sell your product or service, focus on the value you provide to customers and develop a solid pricing strategy. 00:31:10 - Role-Playing to Build Confidence Overcome the fear of stating your new price by practicing it repeatedly. Say the price out loud until it becomes second nature and visualize customers happily paying that amount. Confidence is key in pricing discussions and can influence customers' perception. 00:31:59 - The Impact of Confidence on Pricing Displaying confidence when stating your price signals to customers that others are willing to pay that amount. Conversely, hesitancy may trigger doubt in the customer's mind. Role-playing and triggering mirror neurons can help build confidence in price discussions. 00:33:24 - Pricing Communication and Confidence Always communicate pricing with confidence, even if you feel scared. The first sale at a new price point may be challenging, but once achieved, it becomes easier. Overcome mindset blocks, take a breath, and dive into raising your prices. 00:35:21 - Conclusion Melina's top insights from the conversation. What stuck with you while listening to the episode? What are you going to try? Come share it with Melina on social media -- you'll find her as @thebrainybiz everywhere and as Melina Palmer on LinkedIn.

Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.

I hope you love everything recommended via The Brainy Business! Everything was independently reviewed and selected by me, Melina Palmer. So you know, as an Amazon Associate I earn from qualifying purchases. That means if you decide to shop from the links on this page (via Amazon or others), The Brainy Business may collect a share of sales or other compensation.

Let’s connect:

Learn and Support The Brainy Business:

Check out and get your copies of Melina’s Books.

Get the Books Mentioned on (or related to) this Episode:

Top Recommended Next Episode: Jo Evershed and Gareth Harvey Interview (ep 353)

Already Heard That One? Try These: