An Alley-Oop subscriber, fearing the blowback of an overdue price increase, writes in:
Something I’m struggling to get past (as well as my business partner) if our prices had been higher we would never have gotten to work with some of our best athletes that have come through the past 2-3 years, as they wouldn’t have been able to afford it/nor considered us due to price. I also say this as I was one of the best basketball players in my state for my age growing up and if I hadn’t got a scholarship to the institute of sport, I wouldn’t have been able to afford places like AA so I’m struggling to get past that which may be stupid when it comes to running a business.
Is this just a part of business? If you want to make some serious money you have to put things like that to the side? Please know I’m not saying you and Lach are just money hungry, I just struggle to see how most people can afford those prices. However, I do think upping the prices would identify the truly committed people… just trying to find a way to still work with the best athletes.
We are upping the prices in Jan/Feb but already dreading the blowback.
Any help would be appreciated.
I completely get it.
There is nothing more stomach-churning than upping your prices, even when the world charges more for everything around you.
And this Alley-Oop subscriber, in particular, is one of the good guys, so I can completely understand why he doesn’t want to come across as a greedy, black-suited capitalist.
But here is the deal.
One of the biggest mistakes you can make as a business owner is to think that price matters as much to others as it does to you.
I’ll repeat that.
Price Matters Much Less To Your Customers Than It Does To You.
And the reason we make this mistake is that we impose OUR values on the product, neglecting to consider what your product/service does for your customers.
This is a common occurrence when you’re the expert. Naturally, you won’t value the service as much as someone who is an amateur — because you aren’t experiencing the same problems that they are, and it’s not complicated, difficult, or painful for you.
But it is for them.
And it’s why a lot of business owners become saboteurs (unknowingly) in their businesses.
Now I know that’s hard-hitting and might make some feel uncomfortable, but hearing the truth is more important than hearing what makes you feel good.
And in case you’re the type of person that benefits from hearing examples, let’s use Disney as a case study.
Not only is going to Disney World a massive expense by itself, but then everything you buy while you’re there is ridiculously inflated.
$60 t-shirts, $100 fluffy toys, $15 hotdogs.
Anywhere else, and a parent pays no more than $6 for a tee, $10 for a fluffy toy, and $1.50 for a hotdog.
But at Disney World, they’ll pay 10x the price without batting an eyelid.
So how does that happen?
Because parents value making memories for their kids and giving them joyous experiences and they aren’t going to let the price of a t-shirt get in the way of that.
And that there is the point — what you think isn’t value for money, someone else feels is a bargain.
The old saying: “One man’s garbage is another man’s treasure.”
This is why I’ll repeat it — price matters far less to your market than it does to you.
And my experience?
Every time we’ve increased prices, we’ve had a net positive impact on attracting higher value, more committed, athletes/clients, into our business, who most importantly, get better results.
Because while increasing prices does indeed price us OUT for some athletes, it prices us IN, to others.
Because there is always a section of the market, who look, desire and want PREMIUM.
So for every athlete that can’t afford us, there is an athlete that wouldn’t have considered us if we were cheap. See how that works?
Looking at how we’ve grown in the last three years is, hopefully, a testament to that and, more importantly, the permission to charge what you’re worth.
Because for this Alley-Oop subscriber, he’s got one thing right.
Price confers value, and there is no doubt that premium pricing attracts premium clients with premium levels of commitment.
Now one huge caveat to all this — you’re free to charge whatever you want. It’s your business so run it as you see fit. If you want to be the cheapest, then that’s fine by me. This email is only for those who already feel like their services aren’t being valued, feel like, despite all the effort and sacrifice, they are still on their knees, and, despite every desire to put the customer first, is feeling the pinch on the back pocket now, more than ever.
– Karl Goodman