Two Ways To Skin A Cat
There are a couple different approaches to pricing services and products - high mark-up and low mark-up. Let me give you an example of what I'm talking about...
The average retail store marks up their inventory 100% and turns their inventory over 1 time per year.
Sam's Club marks up their inventory about 15% and turns over their inventory 15 times per year.
So not only does Sam's make almost double the profit over the course of the year, but they also have better cashflow and are able to negotiate better terms with vendors because of the turnover frequency.
Why do I tell you this?
Am I suggesting that you lower your prices?
Not really. But what I am suggesting is that you create some offerings at lower price points than standard one-on-one training. Offer once-per-month program design and assessment, small group training or something like Brian Calkins 16 week Complete Fitness Transformation program. He gets six people in a group and they meet every other week for 16 weeks.
The semi-private and group offerings are a great way to utilize this strategy. Smaller margins per person - but significantly more people.
You can utilize this approach in selling information products as well - but with a slightly different angle. You could pay more commission to affiliates than others to entice them to promote your products more heavily. You could price your "entryway" products very affordably and get more customers into your "funnel" - then sell then bigger margin items down the road.
I just wanted to present another perspective - different from the typical "raise your prices" approach that we often see. I'm a BIG fan of getting top dollar for your time and effort, but sometimes making a lot on the first sale prevents the second sale from ever happening. If you can truly overdeliver early, you'll be more likely to have a customer / client for life.
Talk to you later.
The average retail store marks up their inventory 100% and turns their inventory over 1 time per year.
Sam's Club marks up their inventory about 15% and turns over their inventory 15 times per year.
So not only does Sam's make almost double the profit over the course of the year, but they also have better cashflow and are able to negotiate better terms with vendors because of the turnover frequency.
Why do I tell you this?
Am I suggesting that you lower your prices?
Not really. But what I am suggesting is that you create some offerings at lower price points than standard one-on-one training. Offer once-per-month program design and assessment, small group training or something like Brian Calkins 16 week Complete Fitness Transformation program. He gets six people in a group and they meet every other week for 16 weeks.
The semi-private and group offerings are a great way to utilize this strategy. Smaller margins per person - but significantly more people.
You can utilize this approach in selling information products as well - but with a slightly different angle. You could pay more commission to affiliates than others to entice them to promote your products more heavily. You could price your "entryway" products very affordably and get more customers into your "funnel" - then sell then bigger margin items down the road.
I just wanted to present another perspective - different from the typical "raise your prices" approach that we often see. I'm a BIG fan of getting top dollar for your time and effort, but sometimes making a lot on the first sale prevents the second sale from ever happening. If you can truly overdeliver early, you'll be more likely to have a customer / client for life.
Talk to you later.
posted by Pat Rigsby at 6:34 AM
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