How to RAISE PRICES without losing sales

The video discusses strategies for raising prices in order to increase profitability in a business. The speaker shares a process that has worked well for them, which involves creating a higher price anchor and offering a discount or payment plan to make it more appealing to customers. The speaker emphasizes the importance of giving sales teams a comfortable price to sell and suggests clearing the pipeline and announcing price increases to create urgency and avoid future confusion. The overall goal is to successfully raise prices, increase prepayments, and maintain sales team confidence. In this video, I'm going to show you how to raise your prices. It's one of the best ways you can increase profitability in your business and ultimately make more money and give you more spending power, pay people better, provide better experience, all of the many benefits that go with raising your prices. But one of the fears of raising your prices is what if I don't sell anyone? What if my sales team doesn't have conviction? What if my market won't bear that price? 99 times out of 100, it's purely in your head and in your sales team's head. But having now raised my prices in a number of different businesses, a number of different industries across different sales teams, I have a process that has worked very, very well for me and I'd like to share it with you. So what I've written here on the board here are different prices that I might be increasing, going from $1,000 to $2,000, $2,000 to $3,000, $3,000 to $4,000, $4,000 to $5,000, $6,000 to $8,000, $10,000 to $12,000. These are common price increases that happen. And what I want to do is kind of walk you through the strategy in a real way so that you can see what this equates to in a real business. So if we're going, I'm trying to increase from, let's say, $2K to $3K. The way that I do it is I actually bump my top price up by an additional percent, all right? And so I actually make the new price $4,000, which is the price anchor. This is what the sales people are going to say on the phone, right? And here's what's cool is that I say, cool, you can pay this $4,000 in 2K, you know, and 2K, right? You can make that payment that way. And the reason we do that is because 2K is their emotional anchor. They're usually getting $2,000. And so I'm going to say, cool, you still have that in your back pocket. You're totally fine. It's safe. It's going to be okay, right? So we're going to say it's $4,000, which they can either pay 2K and 2K, or they can get some same-day savings and pay 3K today, all right? And so by doing this, it allows them emotionally to have home base where they feel comfortable and safe asking for $2,000, right? Say, cool, and the extra payment you can make in 30 days. Or if you want, you can just prepay it and pay 3K. So it actually gives the sales people a discount to get the price that is now higher for us, all right? So let's walk through another one, because I think this is something that's good to walk through together. So let's do this 4K one. So you're $4,000, you want to bump to $5,000, all right? Well, again, we're going to bump over. Doot, doot, doot, doot, doot. We're going to skip over that 5K, and we're going to jump straight to 6K. This is going to be our new price anchor. And we're going to say, cool, what I want to do is you can either pay 4K today and then 2K in 30 days. Now, notice that this is a disproportionate split. I prefer to do uneven splits, personally, because I want to still keep more cash up front, right? And the reason this also is cool, now check this out, right? Remember this person where I said 2K? Well, it's like, well, shoot, I can either pay 2K now and 2K in a month, or just an extra $1,000 to get to the $3,000. See how much easier this is to sell? Same thing happens here, right? You're at $6,000. You say, cool, 4K. Remember, this is home-based. This is what our sales team is used to selling. So they have conviction around this number. They're comfortable saying this number. They don't get tongue-tied around saying this number, right? It's like, or, so you can pay 4K today and then 2K in 30 days. Or, you can just pay an extra $1,000 and get it all taken care of today, right? And so all of a sudden, you're downselling this upsell. You're downselling and make it a discount compared to a price anchor, which we introduced on the call. So it actually makes it easier for your sales team to sell. Now, this process that I just outlined is exactly how I raise prices. Because I've done, I've tried to, you know, I've tried to just say, okay, guys, you just got to deal with it. It's just in your heads. But, you know, as time has worn on and, like, I've become more weathered in this, it's good to have a process. And so a couple of the takeaways that I want you to see from this is, one, is that they're going to have an emotional comfort selling around a certain price. You have to accept that, right? And there's a reason that you're the entrepreneur, because you tend to be a little bit more adaptable, a little bit more flexible, a little bit more growth-oriented, and that's okay, right? But you have to meet people where they're at. And so if this is what they're comfortable with, then we still need to give that to them. So they still have that, and that's what they can always ask for up front, right? And then the second thing that I want you to take from this, so first is that you give them their, so I'll write numbers on this, right? First is that you give them their home base, number one, right? Number two is that the price that we're going to be anchoring is not the price that we're actually trying to get to. So if we want to get to $3,000 from $2,000, we're actually talking about a $4,000 price point, which anchors high, and then when we introduce number three, which is the prepayment discount, that is actually the number that we're looking for, all right? The fourth tidbit that I want you to take from this is noticing the discrepancy between what they can pay today versus what they're going to pay over time, all right? I prefer to have an uneven split because, A, I'm going to have more cost of onboarding. I prefer to make more cash flow up front. And the beautiful benefit of just the tiny incremental increase from that one payment, from a $4,000-$2,000 split compared to just, I'll just pay $5,000 today and be done with it, creates a very compelling offer, all right? Now, if I were to jump from, let's say, $10,000 to $12,000, this is going to be a really, really minor difference, right? I could do this a couple different ways. I could say, you know, three times $4,000, right? Or what I would probably prefer is something like six plus three plus three, right? So I get a little bit more up front for the payment and then more over time. Now, notice, if I do six plus three plus three, then it's going to automatically encourage people far more to take this up front prepayment discount, right? It's like, well, for only an extra one more thousand than what I would make on my second payment, I don't have to make any more payments, right? And so you're noticing the four points that are going to be consistently used here, right? Is that, one, we're going to try and give them home base as much as we can, right? Number two, we're going to jump over the number that we're planning on trying to price it at so that we have a higher price anchor so that we can downsell the prepayment discount, which is number three, and noticing that the comfort price compared to the prepayment discount should only be marginal, right? And the reason we do that is because they're like, oh man, it's just a little bit extra and I can pay that now. But what we accomplished through doing this and like that 4K, that uneven split, is that now we've successfully raised the price, we've gotten more people to prepay because of the way that we structured the pricing, and we've done it in such a way that the sales team can feel confident and convicted about it so they can sell consistently without any issues. And I'll give you one more pro tip before we go. So if you're ever going to raise your prices, always, always, always clear the pipe, all right? So clear the pipeline. So announce it. Always own your price increases. It's one of the easiest ways to create true scarcity and urgency, all right? So if your team knows that this is going to happen, then it gives them urgency to close more deals faster and clear out the pipeline. So give them a heads up. Say, hey, we're going to increase the price next month. Hey, we're going to increase the price in the next two weeks. So it gives people this motivation to take action and not sit on the sidelines. It allows your team to squeeze their pipeline to get some extra cash. Now, here's another side benefit of when you clear the pipeline. When you do this, it also gets around, you know, some of those future people are like, I heard a different price, et cetera. Well, it's like, well, we already gave you a heads up about it. We told you we're adding more features, more benefits, blah, blah, blah, to the thing. We have more successes. We're making it easier and faster for you. And so as a result, the price is going to reflect that. So get in now, right? And then you, as the business owner, get a nice boost of cash flow before you make the change so that you can weather maybe a dip in cash flow during the adjustment period, which sometimes happens, right? It's just natural. It's part of the business. All right, so this is how you raise prices in a tactical format. This is how I have learned to do it. It has worked very well for me. I hope it works well for you. The point of this channel is there's a lot of people who are broke, and I make these videos so that you are not one of them. Keep being awesome. Hit the subscribe button. See you in the next video.