Introduction

Contents
In this Special Report, I want to share with you the
Introduction ........................................................................... ii
secrets of how to sell more products and services at higher
prices, even in the current downturn.
1. Test a 10% Price Increase NOW! ........................................................................ 4
Raising
Here’s Howyour
Elasticprices is Is!
Price Really the fastest and cheapest way to 4
......................................................................
increase
Why your profits,Is So
a Price Increase bar none.
Valuable ................................................................... 5

Yet
2. Sell itProducts
your can feelandlike one
Services on of the hardest
Benefits, ones
not Features to do, although
.................................. 8
for noAdd
better reason than
elements/bonuses fear.perceived
to increase Most business owners are 8
value ..........................................
convinced their prospects, customers, and clients are penny-
pinching misers
3. Offer a (very whoGuarantee
generous) will stop at virtually nothing to save a 10
..................................................................... few
pennies.
4. Overcome Price Objections ................................................................................ 13
The fact is, nothing could be further from the truth, and
almost no one ever buys on price all the time.
5. Add an Elite or High Price Option ....................................................................... 14
Some do, but you don’t want them as customers and
clients anyway.
6. Sell Yourself The vast majority of us buy on price only when
....................................................................................................... 15
we’veValue
not yourself
been and given a good reason not to.
your business properly ......................................................... 16
In a recent survey, only 14% of respondents said “price”
7. Face Down Your Competitors ............................................................................. 18
was an important determining factor in purchasing decisions.
Conclusions ............................................................................
Looking at it another way, it means of every 100 people 21
who come into contact with your business, 86 of them are
not concerned about how much money you’re asking for your
products and services.
Now, you might want to worry about the 14 who are,
but I encourage you to disregard them and instead focus your
energies on the 86 who are going to give you the best rewards
for your efforts, by far.
Now, if you doubt me on this at all, I suggest you stop
reading this for a moment and go and look up and down your
street.
I guarantee no one in your street is driving around in the
cheapest possible car they could find.
Moreover, they’re not living in the cheapest houses they
could get, either (and I bet you’re not wearing the cheapest

7©Ways toMedia
Cardell Increase Prices Without Losing Customers —i— —2—
 Introduction
In this Special Report, I want to share with you the
secrets of how to sell more products and services at higher
prices, even in the current downturn.
Raising your prices is the fastest and cheapest way to
increase your profits, bar none.
Yet it can feel like one of the hardest ones to do, although
for no better reason than fear. Most business owners are
convinced their prospects, customers, and clients are penny-
pinching misers who will stop at virtually nothing to save a few
pennies.
The fact is, nothing could be further from the truth, and
almost no one ever buys on price all the time.
Some do, but you don’t want them as customers and
clients anyway. The vast majority of us buy on price only when
we’ve not been given a good reason not to.
In a recent survey, only 14% of respondents said “price”
was an important determining factor in purchasing decisions.
Looking at it another way, it means of every 100 people
who come into contact with your business, 86 of them are
not concerned about how much money you’re asking for your
products and services.
Now, you might want to worry about the 14 who are,
but I encourage you to disregard them and instead focus your
energies on the 86 who are going to give you the best rewards
for your efforts, by far.
Now, if you doubt me on this at all, I suggest you stop
reading this for a moment and go and look up and down your
street.
I guarantee no one in your street is driving around in the
cheapest possible car they could find.
Moreover, they’re not living in the cheapest houses they
could get, either (and I bet you’re not wearing the cheapest

7 Ways to Increase Prices Without Losing Customers —2—

 Introduction

1. Test a 10% Price Increase NOW!

clothes you could get at the charity shops, and you didn’t eat

T
the cheapest slop you could find for breakfast).
his isisthe
Price simplest
only an issuething
when in you
the world to given
haven’t do. Just
yourput
your prices
prospects, up right
customers, andnow by 10%
clients and to
a reason seepay
what happens.
what you’re
asking.Common sense tells us we’re going to see a sudden drop
That’s huge.
in sales, so you might be reluctant even to try it.
If you understand this, you understand one of the key
But, it’s
principles not like jumping
of charging out of a plane with no parachute:
higher prices.
you can always drop them again if the results aren’t favourable.
I’ll explain more about what I mean as I go through this
today — right now in fact — increase your prices by
So,Report.
Special
10%.
So, here are 7 strategies you can use right NOW to start
The chances
increasing are you will lose no business, and even if
your prices.
you do, as I’ll demonstrate in a moment, most businesses
can afford to lose up to 22% of their sales on a modest price
increase like this and still make the same profits, because most
people won’t even notice.
For example, if I want cheap paper for my printed
“roughs” in my office, I’ll buy the cheapest I can get... yet even
then I won’t cross the street to save a few pennies: I’ll buy the
cheapest I have available at the instant I want it.
Furthermore, there are times when buying on price is
mandated by law (as, I believe, in the case of the tendering
laws enforced upon us by the European Parliament).
But even then, businesses routinely get round it by
drafting the tender invitations in such as way that only the
preferred supplier actually meets the requirements and so is
the lowest price by default.

Here’s How Elastic Price Really Is!

A couple of years ago a copywriter friend of mine quoted
for some work to an American client.
He sent his quote off by email, and it was for something
like $2,500.
By return he got an email back saying “Looks like it’s
$4,595.23 in USD at today’s exchange rate. That’s fair. Go

7 Ways to Increase Prices Without Losing Customers —3

4—
 1. Test a 10% Price Increase NOW!
Conclusions

T
So,
his what
is thehappens
simplestifthing
you increase yourtoprices?
in the world You
do. Just may
put
lose some
your customers.
prices up right now by 10% and see what happens.
Common first,
However, senseyou’ll
tells lose
us we’re
a lot going
fewer to seeyou
than a sudden drop
think; and
in sales, so
secondly, youyou might
don’t be to
want reluctant evenwith
be dealing to try it. customers
those
anyway.
But, it’s not like jumping out of a plane with no parachute:
you can always my
Invariably dropworst
themclients
again have
if the always
results been
aren’tquick
favourable.
to
complain about—
So, today price
rightand slowintofact
now pay.— increase your prices by
10%.Another thing is that the quality of you, your products,
and your services are
The chances as perceived by your
you will lose customers
no business, and
and even if
prospects goes up.
you do, as I’ll demonstrate in a moment, most businesses
can afford
So, theto secret
lose upoftohow22% to of their
sell sales
your on a modest
products price at
and services
increase like this
higher prices thanandyourstill make the same profits, because most
competitors?
people won’t even notice.
Just ask.
For example, if I want cheap paper for my printed
Really,
“roughs” it’s office,
in my that simple.
I’ll buyThe
thehardest thing
cheapest about
I can it yet even
get...
is getting
then thecross
I won’t confidence
the streetto ask higher
to save prices
a few than your
pennies: I’ll buy the
competitors
cheapest and available
I have then stickattothe them.
instant I want it.
To your success!
Furthermore, there are times when buying on price is
mandated
Chrisby law (as, I believe, in the case of the tendering
Cardell
laws enforced upon us by the European Parliament).
But even then, businesses routinely get round it by
drafting the tender invitations in such as way that only the
preferred supplier actually meets the requirements and so is
the lowest price by default.

Here’s How Elastic Price Really Is!

A couple of years ago a copywriter friend of mine quoted
for some work to an American client.
He sent his quote off by email, and it was for something
like $2,500.
By return he got an email back saying “Looks like it’s
$4,595.23 in USD at today’s exchange rate. That’s fair. Go

7 Ways to Increase Prices Without Losing Customers ——21

4—
 Test a 10% Price Increase NOW!

ahead”.
Let’s see how.
My friendyou
Imagine couldn’t understand
sell exactly this until
£1,000,000 he checked
of products, and your
his outgoing
profit on them emails — he’d accidentally typed “£2,497”
is £350,000.
instead of “$2,497”. Instantly his prices had increased
What this means is that for every £1 we make in gross
by 84%!
income, we’ve spent 65p to buy or make the stuff and then to
sell it,What
and itwemeans,
make areally, of course
35p profit on it.is he had undervalued his
own worth. And the important lesson here is most of us do.
Now let’s say you increase your selling price by just 10%.
Remember, 86% of people don’t care about price.
So, assuming for the moment you don’t lose any sales,
insteadAndofifselling
you’re£1,000,000
worrying that your clients,
of products, customers
you’re and
now selling
prospects are
£1,100,000 in worrying...
products. then you’re almost certainly worrying
for no reason 86% of the time!
And that extra £100,000 is pure extra profit.

Why Now your

a Price profit isIs£450,000,
Increase instead of £350,000, an
So Valuable
increase of 28.57% for no extra work (because the profit
Broadly speaking most businesses operate with something
increase of £100,000 is 28.57% of £350,000).
like a 35% markup. This is not far wide of the mark for most
businesses in most
But what’s the industries.
real upshot of all this?
If your
Well, markup
let’s is lower,
assume then
we lose what
sales I’m about
because to price
of the show you
will be even more beneficial; if your markup is higher, it will be
increase.
less so, but still worth doing because you are almost certainly
How many can we lose before we start actually losing
undercharging for your products and services!
money?
You can skip the maths if you like, but I encourage you to
Working out the maths shows you can lose 22.2% of your
follow it through at least once, because it’s really important you
sales and still make the same amount of money.
understand this and don’t just take my word for it.
However, experience clearly shows we don’t actually lose
It’ll still work for you, of course, whether you understand
any sales at all. Price really is not that important to the vast
it or not, but experience shows if you really understand it,
majority of people.
you’ll feel more comfortable about actually doing it.
So, with a 35% markup, assuming a fixed cost of
Here’s the bottom line: by increasing your prices by 10%
provision and sale, a price increase of just 10% gives you a
with a 35% markup — which is, remember, about right for
28.57% hike in profits.
most businesses in most industries — increases your profits by
a massive 28.57%
Or another wayorof
solooking
on the at
same
it is volume of sales.
to say you can afford
to lose 22% of your sales and make the same income!
Another way of putting it is that you can increase your
That’s the difference between finishing work on Thursday and
prices by 10% and have your sales fall by 22% and still
working through till Friday afternoon.
make the same amount of money.
I think that’s a good deal, don’t you?

7 Ways to Increase Prices Without Losing Customers — 65 —

 TestFace
a 10%
Down
Price
Your
Increase
Competitors
NOW!

and frequently.
Let’s see how.
Shamelessly. And it’s called negotiating.
Imagine
The mostyou
common
sell exactly
lie goes
£1,000,000
like this “Iofcan
products,
get exactly
and your
the
profit
same onthing
them
down
is £350,000.
the road for less!”.
What
OK... so
thisthat
means
leads
is you
thatto
forask
every
the £1
question
we make“Soin
why
gross
don’t
income,
you go there
we’veand
spent
get 65p
it?”.to buy or make the stuff and then to
sell it, and we make a 35p profit on it.
And you’ll find there is one of three answers to this: they
can’t,Now
theylet’s
really
saycan’t,
you increase
or they don’t
your selling
want to:price by just 10%.
So, assuming for the moment you don’t lose any sales,
1. The place down the road hasn’t got any. Or they’ve got a
instead of selling £1,000,000 of products, you’re now selling
similar item that’s not actually the same at all.
£1,100,000 in products.
2. The place down the road does have the item and it is both
And that extra £100,000 is pure extra profit.
exactly the same and is cheaper, but for whatever reason
your
Now prospect
your profit can’t
is £450,000,
get it frominstead
there. Maybe
of £350,000,
he’s a an
bad
increase
payerof or 28.57%
his boss hasfor no
told
extra
him work
not to.(because the profit
increase of £100,000 is 28.57% of £350,000).
3. The place down the road is unreliable, a cheat, has bad-
breath or any
But what’s theonerealofupshot
a number
of allofthis?
real or perceived faults
that means your prospect actually doesn’t want to buy
Well, let’s assume we lose sales because of the price
from him.
increase.
Believe me, if your prospect could get the same thing at a
How many can we lose before we start actually losing
lower price somewhere else and price was all he cared about,
money?
why the hell is he still talking to you?
Working out the maths shows you can lose 22.2% of your
sales What he’smake
and still reallythesaying
sameisamount
this: “I of
want your service, your
money.
quality, all the things about you and your business that make
However, experience clearly shows we don’t actually lose
dealing with you easy but I want your competitors’ prices”.
any sales at all. Price really is not that important to the vast
The of
majority bottom
people.line is this: even if your competitors have cut
their prices and you suddenly find for some reason your sales-
So, with a 35% markup, assuming a fixed cost of
volume has been hit, cutting your price is a really bad idea.
provision and sale, a price increase of just 10% gives you a
28.57%Without
hike ingoing into the maths, because we did enough
profits.
of that earlier, you will be better off holding your prices and
Or another way of looking at it is to say you can afford
investing more money in advertising, promotion, sales, and
to lose 22% of your sales and make the same income!
service than you will be in cutting sale price.
That’s the difference between finishing work on Thursday and
Yourthrough
working fixed- and variable-cost
till Friday of sales will increase, but
afternoon.
this has a disproportionately small effect on profits.
I think that’s a good deal, don’t you?

7 Ways to Increase Prices Without Losing Customers ——19

6—
 Test a 10% Price Increase NOW!

So, just do it, as they say.

Put your prices up and see what happens.
You will lose virtually no business and your profits will
soar.

7 Ways to Increase Prices Without Losing Customers —7—

 Sell Yourself

2. Sell your Products and Services

believe me, you need to have the self-confidence and self-
respect to stand there and ask for them.
on Benefits, not Features

P
You’ve really got to feel your services and products are
worth the prices you’re asking for them.
eople don’t want to just buy “stuff”. They buy “stuff” to
And
solvefor your
their prospects,
problems, clients
ease theirand customers
pain. to agree
The trouble to
is, most
pay them... they just
businesses need to “stuff”.
sell respect you and trust you.
It comes down “stuff”
Unfortunately, to this:isvalue yourself
available and your
anywhere so itbusiness.
has a
commoditised price.
Be proud of who you are and what you do. There’s no
business,
How no jobcan
much youyou
can’t beaproud
sell pint ofofmilk
being
or the best at.
a packet of aspirin
for? Pennies - because you can get the same thing anywhere.
Not one.
But if you can sell someone a drink to refresh their
maddening thirst, or something to soothe the pain of the
headache that’s threatening to see them locking their kids in
the cellar and throwing away the key, then you can ask more.
Price becomes a problem only when you haven’t given
your prospects, customers, and clients a good reason for it not
being a problem.
I cannot stress too much how important this is, especially
in the downturn. It’s a misconception to think people are
becoming more price conscious.
They’re not.
What they are becoming is more value conscious.
So you’re going to improve your chances of increasing
sales and profits if you forget all about this “low price” business
and instead concentrate on increasing value.
And one way to do this is...

Add elements/bonuses to increase perceived value

People don’t buy on price, but what they do want is value.
So, increase the perceived value of your products and services.
And the trick to pulling this off successfully is to make sure
whatever it is has a high perceived value to them, but costs
you very little to produce or give.

7 Ways to Increase Prices Without Losing Customers ——17

8—
 Sell your Products and Services on Benefits, not Features

3. Offer a (very generous) Guarantee

For this reason, information, even in the form of CDs and

G
DVDs is great because all it costs you is the time to compile it
once, and then the
uarantees few
are pennies it
a fabulous waycosts to reproduce
to overcome and send
price
the discresistance.
itself. You see, any transaction involves risk. And
since
But you’re thehere
be generous one —asking
don’tthem to trustthink
necessarily you with
cheaptheir
is
money, it’s going to benefit you to take this risk onto
best. Remember your long-term customer value is where the your own
shoulders.
profits are.
You ado
It’s this byto
mistake offering a fantastic
think your guarantee.
business is “different” and
there’s
Thenothing youiscan
problem add likeautomatically
everybody this. thinks they
are going to getacheated,
In Ireland small-town thatbutcher
a hordehas
of greedy and sneaky
begun giving away
free professionally-printed recipe-cards in his shop. Andsuck
customers is going to descend upon their business and in it
dry.
exchange for your name, address and email address, he’ll give
you aBut
handsome
the truthbinder tojust
is, this put doesn’t
them in.happen.
If
Justyou want toacook
consider one of the recipes, you can hand in
few things:
the card and they’ll deliver everything you need to make the
meal First,
in a boxtheforperson who will
you: meat, take the trouble
vegetables, sauces...to come into
everything.
your business, scheme to get your products and services, and
then He
cheat charges
you by a calling
premium youfor
onthis,
yourofguarantee...
course, and is he’s already
already a
the most expensive butcher
cheat, and would cheat you anyway. in the town. But it’s added service
and something no-one else, not even the 4 local cut-price
If you rundo
supermarkets a (they
business, you’ve probably come across
should).
difficult customers who just don’t want to pay and are out-and-
Then there’s
out cheats already.a dentist in Australia who gives his child
patients a little paper card that gets stamped after every visit.
After People
the card like
is this
full, don’t need
the kids thea excuse
gets of your guarantee
free bike.
to cheat you: they’ll do it anyway. We’ve all met them, I’m
sure.TheIt’s bike
part probably
of the cost costs the dentist
of doing a couple
business. It comesof hundred
back to
dollars.
bite them in the end, so let them get on with it.
Big deal. never mind what I just said about cheats...
Secondly,
because
Howitmuch
almost never
are happens
all those visitsanyway.
worth to the dentist?
They keen
How reallywill
arethe
that rare.
kids’ parents be to pay his higher fees
— andInpay
fact,them often — they’re
it’s because becausesothey
rarenow have a dentist
we remember them the
kids can’t we
(because wait to see?!
tend to notice only the unusual, not the usual).
If
Inaall
dentist and I’ve
the years a butcher can do this,
been working so can you.
in marketing, what
with my own guarantees and those of my clients, the times
I can think of when someone was ripped off by way of their

7 Ways to Increase Prices Without Losing Customers ——10

9—
 3.
6. Offer
Sell Yourself
a (very generous) Guarantee

G
I
n British
uarantees
societyarewe’re
a fabulous
very firmly
way to taught
overcome
that price
understatement
resistance. You is to
see,
beany
desired.
transaction
That’s involves
maybe nicerisk.when
And
you’re
sincedating.
you’re the one asking them to trust you with their
money, it’s going to benefit you to take this risk onto your own
But it’s deadly when you’re running a business.
shoulders.
As the great salesman Zig Ziglar said, “timid salesmen
You do this by offering a fantastic guarantee.
have skinny kids”, and the rather more poetic Shakespearian
“faintThe
hearts
problem
n’er wonis everybody
fair ladies.”
automatically
If we don’tthinks
sing our
theypraises
are
thengoing
no one to else
get cheated,
is likely to. that a horde of greedy and sneaky
customers is going to descend upon their business and suck it
Now, this is not to say you should elevate yourself by
dry.
treading all over everyone else. I don’t know if you’ve ever had
the experience
But the truth of having
is, this ajust
salesman
doesn’ttryhappen.
to sell you something
by doing nothing more than criticising his competitors, but it’s
Just consider a few things:
very ugly.
First, the person who will take the trouble to come into
And not only is it ugly but it’s also counterproductive and
your business, scheme to get your products and services, and
unnecessary.
then cheat you by calling you on your guarantee... is already a
cheat, First,
and wewouldinstinctively
cheat youmistrust
anyway.anyone who’s negative and
bitter.
If you run a business, you’ve probably come across
difficult
Andcustomers
this is exactlywho just
how don’t
you seem
want iftoyou
paytry
and toare
climb
out-and-
by
out
treading
cheats onalready.
others; secondly, you take the focus away from
your own positive attributes; and thirdly, it implies you’re
People like this don’t need the excuse of your guarantee
insecure and have some ulterior motive.
to cheat you: they’ll do it anyway. We’ve all met them, I’m
sure. Instead,
It’s part then,
of thebe costrelaxed
of doing
andbusiness.
confidentItabout
comes your
back to
bite
business
themand in the
yourend,competitors.
so let them Openly
get onacknowledge
with it. you
charge more than they do and don’t be afraid to tell your
Secondly, never mind what I just said about cheats...
prospects they can get the products and services cheaper from
because it almost never happens anyway.
them, and they’ll get good service, to boot.
They really are that rare.
But then tell them about the things you do that they
don’tIn do. People
fact, want to be
it’s because looked
they’re so after andremember
rare we look for strong,
them
confident we
(because leadership, especially
tend to notice onlyin
thetoday’s economy.
unusual, not the usual).
So all
In tellthe
them all I’ve
years the great things you
been working do to take care
in marketing, whatof
them.
with my It own
doesn’t even matter
guarantees if yourofcompetitors
and those my clients, do
thedo it, too
times
I- can
if they’re
think not making
of when a songwas
someone andripped
dance off
about it butofyou
by way theirare,

7 Ways to Increase Prices Without Losing Customers — 10

15 —
 Offer a (very generous) Guarantee

guarantee are very few and far between.

So what do I mean by “give a great guarantee” and why
should you do it?
Well, to answer the first question, I mean you should
ideally offer a full unconditional 100% money back guarantee
if the client or customer is anything but completely and utterly
delighted with your products or service.
They need only offer any reason or no reason at all to get
their money back.
Yes, I really do mean that: a 100% unconditional
guarantee.
Moreover, the longer you make it and the more wide-
ranging, the less you’ll have to honour it. It’s a quirk of human
psychology, but it’s there nevertheless: if we offer a 30-day
guarantee, by the time day 21 comes round, if they’re not
sure... they’ll come back in for their money.
But if that guarantee is, say, 12 months... well, after a
year they’re either deliriously happy, or they’ve forgotten about
you entirely.
In neither case do you get called on the guarantee.
Now, we can’t always do this unconditionally because
with some businesses the end result of using our products
or services is beyond our control, so it doesn’t make good
business sense to guarantee it.
The next question, why should you give a guarantee like
this, calls for some explanation.
Jay Abraham, the famous American marketer, talks about
“risk reversal”.
In any purchase both the buyer and the seller have some
risk: the seller risks not getting paid, and the buyer risks being
sold a poor-quality product or service.
You might think the risks are equal, but they’re not: the
buyer usually has several sellers to choose from, and the seller

7 Ways to Increase Prices Without Losing Customers — 11 —

 Offer a (very generous) Guarantee

4. Overcome Price Objections

is the one asking for the buyer’s money.

R
The buyer is almost always in the stronger position.
emember earlier I said “the vast majority of us only buy
Soonfor thiswhen
price reason alone
we’ve it been
not makes gooda sense
given reasonfor the
not seller
to”. If
to offeryou
thisget
“risk reversal” by offering a guarantee.
an objection about the price of something, it’s
because you’veallnot
It means thegiven that
risk of theall-important reason
sale going wrong is for them to
transferred
paythe
to you whatThis
seller. you’re asking.
all by itself gives the buyer a massive
confidence
It’s notboost. His or her
that they’re investment
tight-fisted: it’sisyour
secure.
responsibility to
makeBut,surewhat
you about
have given them
that old all thebeing
worry... information
cheated? they need
to make the right decision.
Well aside from the fact it almost never happens, even
if youIfare
people are not
cheated willing to it
occasionally, pay
stillthe pricesense
makes you ask it’s a
to offer
because you haven’t persuaded them of the value of your
guarantee.
products and services.
See, it’s often too big a mental leap to bridge the gap
Onewhat
between important thinglose
you might you in
mustbeingnotcheated
do is beoccasionally,
ashamed of
charging
and what high prices
you’re going ortoeven
gainjust to avoid
in the couple the
of issue.
hundred extra
sales In
you’ll
fact,get
it’sbecause of your guarantee. to do this, and it
usually counterproductive
can increase
If you get both the response
cheated once in rate
everyand 50 the quality
sales, of your
but you’re
customers
making an and
extraclients if youa wear
100 sales week your
because pricesof like
youra guarantee,
“badge
of makes
it honour”: “yes,
sound I realise
financial our fees
sense are it,
to offer twice as high
doesn’t it? as our
nearest competitor, and I’m glad you brought that up. Here are
the 17But human
good nature
reasons youbeing what itoff
are better is,doing
we would rather
business with us
bizarrely prefer not
and paying our prices”. to lose £1,000 than gain £10,000.
Of
Onecourse, always
thing you will remember even
find is it can though
take the nerve.
a steady vast
majority of often
People will people really
tell are genuinely
you they can get thehonest,
“samethe trickcheaper
thing” with
guarantees is not to leave yourself too vulnerable.
down the road.
It is always
This suggestsa case of risk
a couple of management.
things: they can’t; or they don’t
want There
to (because if they no
is absolutely could andwhatsoever
doubt they wanted to and low
a stunning
price was important
guarantee invariably to them,a they’d
means massivebeincrease
down theinroad
yourright
now buying it — what they usually mean is they want your
business.
service and quality, and the other guy’s prices).
It does take some courage, but it’s OK to be
apprehensive, and you don’t have to start out big. Start with
something small and non-threatening and see how it goes.
Then extend it, make it more generous.

7 Ways to Increase Prices Without Losing Customers — 12

13 —
 4. Add
5. Overcome Price
an Elite Objections
or High Price Option

R
T
emember
his earlier
is one of I said “the
the easiest to do,vast
andmajority
yet one of us only
most buy
business
on pricemiss.
owners whenAs we’ve not been
always, givenrule
the 80/20 a reason notIfto”.
applies. you If
youaget
sell an widget,
£100 objection about
then theisprice
there goingoftosomething,
be in your it’s
list
because
of you’ve
customers not given
maybe 20% that all-important
of people who would reason for them
be willing to to
pay yousay,
spend, what you’re
£400 asking. if you gave them the option.
or £500...
It’s not
And that
if you they’re
take that tight-fisted: it’s your responsibility
list of high-spenders, you’ll find to
make sure
maybe 20%you have given
of them will bethem all the
prepared toinformation they
pay you, say, needor
£1000
to make
more for the right decision.
something... if you give them the option.
If people
The troubleareis,not willing
if you to ask,
don’t pay thethe price youof
chances ask it’s
them
because is
offering you
as haven’t
close topersuaded
zero as makes themno ofdifference.
the value ofTheyour
easy
products
way to doandthisservices.
is to think about creating a “de-luxe” offering
which costs you nothing to offer but for which you can
One important thing you must not do is be ashamed of
command an insanely high price.
charging high prices or even just to avoid the issue.
Let me give you an example.
In fact, it’s usually counterproductive to do this, and it
can increase
Imagineboth the response
a carpet retailer whoratedecides
and thetoquality of your
do this.
customers and clients if you wear your prices like a “badge
So instead of just saying he’ll come and fit your carpets,
of honour”: “yes, I realise our fees are twice as high as our
he offers a high-end service where he’ll come and fit the
nearest competitor, and I’m glad you brought that up. Here are
carpets, get your furniture cleaned, your house spring-cleaned
the 17 good reasons you are better off doing business with us
professionally, your dog groomed and shampooed... and at the
and paying our prices”.
same time send you and your family to a luxury hotel in Spain
for a One
long thing
weekendyou while
will find
he is it can
does it. take a steady nerve.
People will often tell you they can get the “same thing” cheaper
You could charge a lot of money for that — and I
down the road.
guarantee, every carpet retailer has clients who’d pay his price
for it.This
It’ssuggests
probablyaonly couple
3 orof4%things:
of thethey can’t; list
customer or they don’t
but there
want
are bigtoprofits
(because if they
in that 3 orcould
4%. and they wanted to and low
price was important to them, they’d be down the road right
And you don’t have to start big: cast your mind back to
now buying it — what they usually mean is they want your
the butcher I mentioned before. His premium-priced “meal
service and quality, and the other guy’s prices).
package” costs him nothing to offer other than a bit of paper
and ink, and requires time and effort to implement only when
someone actually buys one.
All this is easy to do, and takes no more than your
applying a little imagination to the problem.

7 Ways to Increase Prices Without Losing Customers 13 —

— 14
 Offer a (very generous) Guarantee

5. Add an Elite or High Price Option

guarantee are very few and far between.

T
So what do I mean by “give a great guarantee” and why
shouldhis is one
you do it?of the easiest to do, and yet one most business
owners miss. As always, the 80/20 rule applies. If you
Well,
sell ato answer
£100 the first
widget, thenquestion, I mean
there is going to you
be inshould
your list
ideally offer a full unconditional 100% money back
of customers maybe 20% of people who would be willing to guarantee
if the client
spend, say, or
£400customer is anything
or £500... but them
if you gave completely and utterly
the option.
delighted with your products or service.
And if you take that list of high-spenders, you’ll find
maybe They
20% need only offer
of them any
will be reason to
prepared or pay
no reason at all
you, say, to get
£1000 or
their money back.
more for something... if you give them the option.
Yes, trouble
The I really is,
do ifmean that: ask,
you don’t a 100% unconditional
the chances of them
guarantee.
offering is as close to zero as makes no difference. The easy
way to do this isthe
Moreover, to longer
think about creating
you make a “de-luxe”
it and the moreoffering
wide-
which costs you nothing to offer but for which you can
ranging, the less you’ll have to honour it. It’s a quirk of human
command
psychology, anbut
insanely highnevertheless:
it’s there price. if we offer a 30-day
guarantee,
Let meby theyou
give timeanday 21 comes round, if they’re not
example.
sure... they’ll come back in for their money.
Imagine a carpet retailer who decides to do this.
But if that guarantee is, say, 12 months... well, after a
year So instead
they’re of just
either saying happy,
deliriously he’ll come and fit forgotten
or they’ve your carpets,about
he offers a
you entirely.high-end service where he’ll come and fit the
carpets, get your furniture cleaned, your house spring-cleaned
In neitheryour
professionally, casedogdo you get called
groomed on the guarantee.
and shampooed... and at the
sameNow,
time we
send youalways
can’t and your family
do this to a luxury hotel
unconditionally in Spain
because
for
witha some
long weekend
businesses while
thehe
enddoes it. of using our products
result
or services is beyond
You could chargeour control,
a lot so itfor
of money doesn’t
that —make
and good
I
business sense to guarantee it.
guarantee, every carpet retailer has clients who’d pay his price
for it.The
It’snext
probably only why
question, 3 or should
4% of the
you customer list but there
give a guarantee like
are big profits in that 3 or
this, calls for some explanation.4%.
And you don’t the
Jay Abraham, have to start
famous big: castmarketer,
American your mindtalks
backabout
to
the
“riskbutcher I mentioned before. His premium-priced “meal
reversal”.
package” costs him nothing to offer other than a bit of paper
In any
and ink, andpurchase both and
requires time the buyer
effort and the seller only
to implement havewhen
some
risk: the seller
someone risks
actually notone.
buys getting paid, and the buyer risks being
sold a poor-quality product or service.
All this is easy to do, and takes no more than your
You amight
applying little think the risks
imagination to are
the equal, but they’re not: the
problem.
buyer usually has several sellers to choose from, and the seller

7 Ways to Increase Prices Without Losing Customers — 14

11 —
 6. Sell Yourself

I
n British society we’re very firmly taught that
understatement is to be desired. That’s maybe nice when
you’re dating.
But it’s deadly when you’re running a business.
As the great salesman Zig Ziglar said, “timid salesmen
have skinny kids”, and the rather more poetic Shakespearian
“faint hearts n’er won fair ladies.” If we don’t sing our praises
then no one else is likely to.
Now, this is not to say you should elevate yourself by
treading all over everyone else. I don’t know if you’ve ever had
the experience of having a salesman try to sell you something
by doing nothing more than criticising his competitors, but it’s
very ugly.
And not only is it ugly but it’s also counterproductive and
unnecessary.
First, we instinctively mistrust anyone who’s negative and
bitter.
And this is exactly how you seem if you try to climb by
treading on others; secondly, you take the focus away from
your own positive attributes; and thirdly, it implies you’re
insecure and have some ulterior motive.
Instead, then, be relaxed and confident about your
business and your competitors. Openly acknowledge you
charge more than they do and don’t be afraid to tell your
prospects they can get the products and services cheaper from
them, and they’ll get good service, to boot.
But then tell them about the things you do that they
don’t do. People want to be looked after and look for strong,
confident leadership, especially in today’s economy.
So tell them all the great things you do to take care of
them. It doesn’t even matter if your competitors do do it, too
- if they’re not making a song and dance about it but you are,

7 Ways to Increase Prices Without Losing Customers — 15 —

 Sell your Products and Services on Benefits, not
SellFeatures
Yourself

then For
the this
perception
reason,isinformation,
you’re the onlyevenones.
in the form of CDs and
DVDs is great because all it costs you is the time to compile it
It’s a little understood truth in business, but the easiest
once, and then the few pennies it costs to reproduce and send
way to increase your value is to increase your service.
the disc itself.
Customer service is a trite phrase often bandied about, but few
business
But be
owners
generous
reallyhere
embrace
— don’t
the necessarily
idea. think cheap is
best. Remember your long-term customer value is where the
And that’s a real shame, because service is really
profits are.
important and it’s dead easy to beat your competitors hands-
downIt’s
on aservice.
mistake to think your business is “different” and
there’s nothing you can add like this.
Why?
In Ireland a small-town butcher has begun giving away
Because most business owners see their business as
free professionally-printed recipe-cards in his shop. And in
being all-important, and their customers and clients as being
exchange for your name, address and email address, he’ll give
something of an inconvenience.
you a handsome binder to put them in.
Customer service is king, always. Probably the best
If you want to cook one of the recipes, you can hand in
modern example of this is Domino’s Pizza. They didn’t sell
the card and they’ll deliver everything you need to make the
themselves on having the best pizza in town, nor the cheapest.
meal in a box for you: meat, vegetables, sauces... everything.
No, they sold themselves on service: “Domino’s delivers in
He charges a premium for this, of course, and he’s already
30 minutes or less”.
the most expensive butcher in the town. But it’s added service
and something
Nothing, I no-one
repeat, else, not even
nothing, the service.
sells like 4 local cut-price
supermarkets do (they should).
There are three really important words you need to burn
Thensoul
into your there’s a dentist
in letters in Australia
of fire who gives
when it comes his child
to service: “and
patients
then a little paper card that gets stamped after every visit.
some”.
After the card is full, the kids gets a free bike.
Remember this and put it into practice, and you won’t go
The bike probably costs the dentist a couple of hundred
far wrong.
dollars.
ValueBig
yourself
deal. and your business properly
We
Howcanmuchpredicate
are all all of this
those onworth
visits the necessity of your
to the dentist?
having a strong sense of self-esteem. You see, you can’t expect
How
to gain thekeen will and
respect the kids’
trust parents
of your be to pay his
prospects, higher fees
customers and
— and unless
clients pay them youoften — because
first respect they now have a dentist the
yourself.
kids can’t wait to see?!
Yes, it sounds terribly New Age, but it’s true: all respect
startsIfwith
a dentist and a butcher
self respect, both yourcanrespect
do this,for
soothers
can you.
and their
respect for you.
And if you want to be charging Premium Prices, then

7 Ways to Increase Prices Without Losing Customers ——169 —

 Sell Yourself

believe me, you need to have the self-confidence and self-

respect to stand there and ask for them.
You’ve really got to feel your services and products are
worth the prices you’re asking for them.
And for your prospects, clients and customers to agree to
pay them... they need to respect you and trust you.
It comes down to this: value yourself and your business.
Be proud of who you are and what you do. There’s no
business, no job you can’t be proud of being the best at.
Not one.

7 Ways to Increase Prices Without Losing Customers — 17 —

 Test a 10% Price Increase NOW!

7. Face Down Your Competitors

So, just do it, as they say.
Put your prices up and see what happens.
Don’t allow yourself to be drawn into a price war with your
You will As
competitors. lose virtually
Earl no business
Nightingale and your
said, “don’t profits will
compete... create”.
soar.
As marketers and business owners we can take this
to mean don’t fight your competitors... but make yourself
different from and better than they are. Create services and
products they cannot hope to match.
In this economy in particular, it’s no time to be a
“shrinking violet”. When you feel at your weakest and most
vulnerable, then that’s when you need to be your strongest and
your most resolute.
Because what you’re going to see around you is all your
competitors, through lack of direction and imagination, slashing
prices to the bone.
It’s going to be very tempting for you to do the same. I
know you’re going to feel the pressure to conform.
And that’s OK. It’s human nature. We’re a gregarious
creature and we follow the crowd. Robert Cialdini called it
“social proof”, and it just describes the natural human tendency
to do what everyone else is doing.
But if you do the same things as everyone else, you’ll
get broadly the same results they do. And in a downturn, that
means if “everyone” is suffering and you ape their behaviour...
then you’ll suffer too.
But take heart because if you hear “rumours” your
competitors are cutting their prices, not only do you know
that’s folly, but you also DON’T know if it’s true or not.
And that’s when you’re going to feel most the pressure
to cut your own prices: friends, family, “friendly” competitors,
clients, prospects, and well-meaning do-gooders will all be
saying you “must” cut your prices.
And they are all dead wrong!
Truth is, your clients and customers lie to you. Regularly

7 Ways to Increase Prices Without Losing Customers ——187 —

 Face Down Your Competitors

and frequently. Shamelessly. And it’s called negotiating.

The most common lie goes like this “I can get exactly the
same thing down the road for less!”.
OK... so that leads you to ask the question “So why don’t
you go there and get it?”.
And you’ll find there is one of three answers to this: they
can’t, they really can’t, or they don’t want to:

1. The place down the road hasn’t got any. Or they’ve got a
similar item that’s not actually the same at all.
2. The place down the road does have the item and it is both
exactly the same and is cheaper, but for whatever reason
your prospect can’t get it from there. Maybe he’s a bad
payer or his boss has told him not to.
3. The place down the road is unreliable, a cheat, has bad-
breath or any one of a number of real or perceived faults
that means your prospect actually doesn’t want to buy
from him.
Believe me, if your prospect could get the same thing at a
lower price somewhere else and price was all he cared about,
why the hell is he still talking to you?

What he’s really saying is this: “I want your service, your

quality, all the things about you and your business that make
dealing with you easy but I want your competitors’ prices”.
The bottom line is this: even if your competitors have cut
their prices and you suddenly find for some reason your sales-
volume has been hit, cutting your price is a really bad idea.
Without going into the maths, because we did enough
of that earlier, you will be better off holding your prices and
investing more money in advertising, promotion, sales, and
service than you will be in cutting sale price.
Your fixed- and variable-cost of sales will increase, but
this has a disproportionately small effect on profits.

7 Ways to Increase Prices Without Losing Customers — 19 —

 TestFace
a 10%
Down
Price
Your
Increase
Competitors
NOW!

ahead”.
Using the broadly correct 35% markup as before, if you
triple, say, your budget for customer service, you need to
My friend couldn’t understand this until he checked
increase sales volume by only 5% or so to make it all back.
his outgoing emails — he’d accidentally typed “£2,497”
instead
Thisof
is “$2,497”.
in contrast Instantly
to the hugehis pricesahad
damage 10%increased
price cut
by 84%!
causes (and let’s face it, that’s a modest cut! In the high-
street, 75% discounts are now common).
What it means, really, of course is he had undervalued his
own worth. And the important lesson here is most of us do.
Remember, 86% of people don’t care about price.
And if you’re worrying that your clients, customers and
prospects are worrying... then you’re almost certainly worrying
for no reason 86% of the time!

Why a Price Increase Is So Valuable

Broadly speaking most businesses operate with something
like a 35% markup. This is not far wide of the mark for most
businesses in most industries.
If your markup is lower, then what I’m about to show you
will be even more beneficial; if your markup is higher, it will be
less so, but still worth doing because you are almost certainly
undercharging for your products and services!
You can skip the maths if you like, but I encourage you to
follow it through at least once, because it’s really important you
understand this and don’t just take my word for it.
It’ll still work for you, of course, whether you understand
it or not, but experience shows if you really understand it,
you’ll feel more comfortable about actually doing it.
Here’s the bottom line: by increasing your prices by 10%
with a 35% markup — which is, remember, about right for
most businesses in most industries — increases your profits by
a massive 28.57% or so on the same volume of sales.
Another way of putting it is that you can increase your
prices by 10% and have your sales fall by 22% and still
make the same amount of money.

7 Ways to Increase Prices Without Losing Customers ——205 —

 Conclusions
So, what happens if you increase your prices? You may
lose some customers.
However, first, you’ll lose a lot fewer than you think; and
secondly, you don’t want to be dealing with those customers
anyway.
Invariably my worst clients have always been quick to
complain about price and slow to pay.
Another thing is that the quality of you, your products,
and your services as perceived by your customers and
prospects goes up.
So, the secret of how to sell your products and services at
higher prices than your competitors?
Just ask.
Really, it’s that simple. The hardest thing about it
is getting the confidence to ask higher prices than your
competitors and then stick to them.
To your success!
Chris Cardell

7 Ways to Increase Prices Without Losing Customers — 21 —