How to Charge 10x More Than Your Competitors

Most entrepreneurs think that if they charged more, they'd be less likely to get new clients, and so they keep prices low. But then they get burnt out trying to find and serve more and more clients at one time. The better approach, in my opinion, is to become the premium provider in your niche. The nice thing about this approach is you actually end up attracting a higher quality client. It's like that classic meme. I'm not sure who made it originally about the $500 client and the $50,000 client, but you can't just raise your prices and then call it a day. So to help you pull this off correctly, I need to tell you a story. Last month I went looking for a photographer. I'm redoing my website right now and I needed new headshots. So here are my options. I could either get a local photographer for $400, or I could get an out of state photographer for $5,250. Believe it or not, I actually chose the second photographer. But the question is, why would I drive four and a half hours and pay over ten times as much just to get these headshots? There are three reasons in this video. I'm going to share with you what they are and how you can apply them to your business to charge 10 times more. So let's dive in. Number one, relevance. So I had acne as a kid and it wasn't terrible, but it was enough for me to be self conscious about it. And I remember going to the drugstore for the first time to try to find a face wash to help with my acne. So I looked at the shelves and there were all these different brands and it was totally overwhelming. And then all of a sudden I saw this little orange bottle that just said acne. So that was it. I just grabbed it, I paid for it, I didn't even look at the price and I left. It's the same thing with any type of business. The more specific you are about the problem you solve, the more attractive you'll be to people who have that problem, because they'll naturally assume that your solution is more relevant to them. Which brings us back to the headshots. So the local photographer I found shoots weddings, graduation photos, business headshots. But the out of state photographer I ended up hiring only does personal branding portraits. That's all she does all day. And because she does it all day, she has a very specific approach. First you create a mood board and then you meet with her to talk about your brand. Then you speak with her wardrobe stylist. To talk about which outfits to bring for the shoot. And finally, on the day of, you show up at her studio. It's a beautiful studio. She has a hair and makeup person there waiting for you, and. And you get the photos done. Of course, she can invest in all of this because she has enough money to go around, because she's charging enough. So specializing isn't just some marketing trick of niche and you'll suddenly get more clients. It's a way to build a better solution. So, number two, results. We've all heard the phrase you get what you pay for. The biggest argument for raising your rates is this. It allows you to invest more in the solution. So this is what we saw in the photographer example. And here's one of the 30 images that I got back from her. It's a great shot, right? And it's not just her skill that makes it great. It's the fact that she has a nice studio with expensive equipment and she has a whole team around her. But what if you don't sell something that requires investing a lot of money? What if you sell something that requires your clients to invest and take action in order to change their behavior? I think coaching is a great example of this, where your job is actually to use pricing to get the client more invested, because you can be the best coach in the world, but if your client doesn't take action between sessions, they're not going to get the result. So the more skin they have in the game, the better. And pricing psychology is even weirder than that because human beings aren't these super rational robots who are always looking at the specific value they get for the price they pay. No, we're irrational creatures, and we're creating stories about how good something is based on what it costs. There's the study they did at Caltech and Stanford where participants tasted five different wines between $5 and and $90. When the volunteers could see the prices, they rated the most expensive wine as their favorite, the $90 one. And the researchers could actually see in the brain scans that they were getting more pleasure from that wine. But then they made the volunteers taste the wines again. And this time it was a blind taste test. They couldn't see the prices. And then they voted again. And the participants overwhelmingly chose the cheaper $5 wine as their favorite something to think about. Right. And number three, recommendations. You can have a tight specialty and great results to share, but there's a third thing that you need to charge 10 times more, and that's recommendations to explain what I mean, let me tell you about an app I use called Find Me Gluten Free. I have celiac disease, which means I can't eat gluten. And it used to be a pain in the butt to travel because I was always going to these places who had no idea what I was talking about. I remember there was one roadside diner in Pennsylvania and the woman asked me if I wanted her to put the gluten on the side and that's when I knew that like, I wasn't going to eat the food there because I was going to get sick. So Find Me Gluten Free. This app has reviews of nearby restaurants based on how well they accommodate a gluten free diet. And I'm way more likely to go to a restaurant if it's gotten good reviews on the app because it's risky to go to an untested place and then maybe get sick afterwards. The point is, people pay more and go out of their way based on recommendations from people that they trust. You might ask, okay, so how do I get recommended more often? And it's not just a matter of improving the quality of your work, although that's important. It's mostly about finding people who serve your potential clients in a complimentary way and having those people recommend you. This is what happened with the portrait photographer because I had a copywriter I was working with on my website and she recommended the photographer. So I think it would have been harder for me to pay 10 times as much if I didn't have that recommendation. In summary, 10x ing your prices requires three things becoming more relevant to your clients. Using pricing to get better results and getting recommended by people that they trust. It does take some work, but it's worth it. If you want my support to increase your prices and grow your business, then go to gregfaxon.com apply to apply for a free strategy session with me. And there's one more thing with this, which is you can do all three things that I mentioned in this video. But if you don't know how to sell high ticket services, you're not going to make it work. And specifically, you need to help these clients make decisions. If you're selling something for $500, it's not that important. If you're selling something for 5K 10K even more, you're going to run into situations where potential clients might be ghosting you. They might say, I need to think about it and then not get back to you. So watch this next video to learn what to do in that situation. Thanks for watching.