Unless you’ve embraced premium pricing, you may be leaving money on the table.
If you’re not familiar with the concept of premium pricing, you should be.
Why? You may be underpricing your services—maybe even drastically so.
What is premium pricing?
Let’s do an experiment.
Imagine a pound of coffee beans on the shelf at your local supermarket.
For this test, let’s pretend they’re called something exotic-sounding but still plain, like…
What would you pay for them? $9.50 a pound?
Now let’s take those same beans and move them to a fancy cafe. Put them in a black bag with sparkly gold letters and attach a card describing their “taste profile.”
And now let’s call them something pretentious, like “Sulawesi Toraja Elite.”
Now how much would you pay?
Would you be surprised to learn that the coffee people with the green logo and the mermaid on the sign sell similar beans for $29 a pound?
That’s a 200% increase…
And a fabulous example of premium pricing in action.
What premium pricing is—and isn’t
Now before you throw the L-word at me—luxury—let’s get something straight.
Premium pricing isn’t meant to communicate exclusiveness. Although it can feel that way, with a premium strategy, you’re not using your price to say, “Only the lucky few can have this.”
Instead, you’re suggesting that you’re, quite simply, worth the extra money.
Apple is a great example of premium pricing at work.
If all you want is a laptop, you can get a 15-inch Dell for $350. A similar MacBook—actually, a smaller one!—will cost you an additional $1,000.
Or for another example, take a look at my premium training program, priced at $5,000.
It costs what it does because of the experience I share within it—I help my clients close nearly $800 billion in sales every year, and I teach the same techniques in Constant Client Flow.
That’s why my program costs twice as much as the guru who tells you have to do a huuuuge launch, then crank out webinars, blog for two years to become “online famous,” and finally sell through affiliates. Mine leads to better outcomes, and a bigger transformation—and it’ll get you a return on your investment years faster.
As an aside, wouldn’t you think differently about the program if it had a price tag of, say, $497? Whether you were conscious of it or not, part of you might wonder if the information in my program was even any good. “Well gosh. If it’s as awesome as she says it is… why isn’t she selling it for more?”
Premium pricing, in other words, connotes not only worth, but also value.
Why you should consider premium pricing
If you’re thinking about diving in and raising your prices, the upside is tremendous.
Profit is one (obvious) benefit. If it costs you two hours of your time to deliver Service X, which price point will make you more money—$279 or $1279? Exactly.
Competitors will also find it harder to unseat the perception that you’re worth a premium, especially if you tie your premium pricing to what makes your business unique.
If you’re a copywriter who says “I charge $350 an hour because I’ve been writing for 20 years,” you’ll instantly made it harder for someone with only 5 years of experience to justify even half of that fee.
You may be worried your buyers would prefer a lower price, but you’d be surprised how many would prefer a real—and transformational—result.
Because here’s the other thing premium prices do: they make the people who are paying them much more committed to achieving an outcome they’re hiring you for.
And that will pay dividends for you too. A premium pricing strategy may be just what you needed to get you off the “overworked and underpaid” hamster wheel—and into the place where you’re truly valued for what you’re worth, and for the changes you make in your customers’ lives..
Examine your pricing structure the next time you get a chance. Are you charging enough? Could you be pricing your services higher? Consider testing the “premium” waters—you may very well discover that swimming in them is a whole lot more lucrative.