Raising Your Rates Can *Increase* Your Business

How many times have I heard literal horror stories from Internet business startups? Too many times to count! I get emails from those who just simply can't seem to make a living online. They've tried everything (according to them) and are still struggling to make ends meet.

At some point, the "conversation" always turns to price. That's where I find a lot of online business people making their mistakes. The common mindset among Internet business startups is that you have to keep your prices rock-bottom low in order to attract customers.

Nothing could be further from the truth! Raising your rates (in some cases) can actually increase your business. How so? Here are several reasons....

1. People Equate Price With Quality

I'm sure you've heard the expression, "You get what you pay for." That statement comes from a long line of lessons learned by people across the globe who have bought something at a discounted price and regretted it later.

Maybe the product was used. Maybe it was made with inferior materials. Perhaps a "discount" service they tried fell through and left them in a fix. It could be any number of reasons, but those who have tried the "bargain" or "discount" route and have been burned are quick to look for higher priced products and services. It makes them feel safe.

I know of several online business owners who raised their rates on the services they provide. What happened? For about one week it seemed they had made the wrong decision. Business all but stopped! However, after that "adjustment" period, floods of leads came rolling in. They never regretted it.

2. Customers View Higher Prices As A Status Symbol

It's true! I'm sure you've met some people who love to brag about how much they paid for everything they own. Their car was custom ordered from the dealer and cost much more than any old car chosen from the showroom floor. Their clothes reflect this season's latest trends and were purchased at full price from the expensive department store... NOT at an end-of-the-season clearance sale. I could go on and on.

The point is, many customers simply will not buy a product or service at a discount price regardless of how good the quality is. They have the "ability" to afford higher prices and are proud of that fact.

3. Many Believe Expensive Products Are Image Boosters

I actually heard this conversation in a department store once.

Woman One: "Look at this blouse! Isn't it wonderful?"

Woman Two: "It's OK, I guess."

Woman One: "But it's an Adrian Bloom blouse! I'm going to buy it and make all my friends jealous."

Woman Two: "Who is Adrian Bloom?"

Woman One: "I have no idea, but this blouse costs twice as much as that Liz Claiborne one so it must be the next big thing!"

Can you believe it? The woman had no idea who the designer was, but based on price, she decided it would enhance her image so she bought it.

The same is true of Internet shoppers looking for products or services. Those who believe being associated in some way with higher-priced businesses are more willing to spend money because they feel it will enhance their images.

The psychology of pricing is a complicated subject, and I'll be the first to admit that raising rates will not work for everybody. Before you raise your rates, consider the following:

1. Can you offer something better or different than your competition?

2. Will the rest of your business support the "branding" of a higher price? (i.e., Do you have a very professional-looking site, excellent service, and other elements that those who pay higher prices expect?)

3. Will the new pricing structure allow you to make as much, or more, money by selling fewer items at a higher price rather than many items at a lower price?

It just might be that the reason your business is struggling is that you're charging too little. Give some serious thought to raising your rates. It just might be the best thing you ever did!

Copyright 2004 Diane Hughes * ProBizTips.com

About The Author

Diane C. Hughes * ProBizTips.com

FREE Report: Amazingly Simple (Yet Super Powerful) Ways To Skyrocket Your Sales And Build Your Business Into A Tower of Profits! ==>> http://madmarketer.com/diane

---

How to Succeed and Stay on Task with Your Internet Marketing Promotion Strategies. A.C.T.I.O.N..

How to Succeed and Stay on Task with Your Internet... Read More

Internet Marketing Online: Secret To Gain An Advantage Over Your Competition By Using Bartering

If you've a business, you must always keep an eye... Read More

A Powerful Selling Tool on the Net - 3 Factors To Apply

The Internet is a powerful selling tool. Never before has... Read More

Online Sales: How To Use Customer Feedbacks To Generate More Sales

Communication is the engine that powers business.It is an important... Read More

How You Can Make Your Ad Command Attention

There are lots of ads for lots of product out... Read More

Learn Judo and Beat the Summer Traffic Blues

Did it seem like as the Fourth of July fireworks... Read More

Book Yourself Solid Tip: Cash In On The Brilliant, Creative And Quirky You!

What do Donald Trump, Oprah Winfrey and Robin Williams have... Read More

How to Communicate with Prospects All Over the World Who Speak a Different Language

I discovered a free service online, that allows me to... Read More

Capture Names - They Are Like GOLD Nuggets!!

A landing page is used to capture people's details when... Read More

Make Your Internet Marketing Easier With Niche Marketing Keywords

If your home based business depends on niche marketing, keywords... Read More

Is The Internet the Ideal Marketing Medium?

The internet has grown explosively in the ten or so... Read More

Make Sure That Your Dot-Com Doesnt Become The Next Dot-Bomb!

Late last night I turned on my television and discovered... Read More

How to Make Money from Your Website Using Advertising

You have managed to get your website to that magical... Read More

Do This - and Destroy Your Resale Rights Business!

There's one thing that's sure-fire guaranteed to ruin your profits... Read More

List Building Through Cooperative Partnerships....

This is a little tip I got from Alex Sampson,... Read More

Growing Your Business In CyberSpace

A synopsis of Philippa Gamse's Presentation to the National Speakers... Read More

Free Marketing = Effective Marketing

According to Google.com there are over three billion web pages... Read More

What is EMarketing? A New Discipline is Evolving

Before trying to define the term of eMarketing (or electronic... Read More

How To Actually Make Money In Network Marketing

Most people that I know who are, or have been... Read More

Develop Enormous Recurring Income Online Starting Today

If you're like me, you'd rather work smarter than harder.... Read More

How to Use Viral Marketing for Online Profit

When Sabeer Bhatia and Jack Smith founded Hotmail.com they promoted... Read More

The e-Marketing Plan - Brief Overview and Working Scheme

I. Summary of a marketing planThe marketing planning (concretized in... Read More

Joint Ventures: Five Powerful Tips for Building JV Relationships

One of the best and fastest ways to build your... Read More

The Myth of Internet Marketing: aka The Golden Carrot

Why am I so mad I could throw my computer... Read More

Internet Marketing Promotion And Advertising Can Build Your Business

Internet marketing promotion & advertising are crucial for your website's... Read More

What is Pay Per Call? How does it work?

Pay Per Call is the next wave of advertising on... Read More

Dollars In The Details!

When it comes to your marketing message, the little things... Read More

How To Make Readers Desperately and Uncontrollably Wanting To Buy Your Product

Are you looking for ways of persuading your web site... Read More

10 Viral Internet Marketing Strategies That Produce A Massive Surge of Web Site Traffic and Sales

1. Start a newsletter that people can subscribe to, and... Read More

Getting Targeted Traffic by Standing Out In The Crowd

Have you ever seen the trading floor in action on... Read More

Making Money out of Your First Effort

Have this phrase broken through your life at least once?... Read More

Top Ten Steps To Prepare Yourself for Online Marketing

Still marketing through press releases, networking groups, and talks to... Read More

Think Outside The Box: Home Internet Business Ideas

Imagine never having to leave your home to work. Not... Read More