Here’s the deal, big talk out there of recession, banks closing and not willing to lend money and on and on. I have to be honest and tell you I really don’t know the half of it because I’m sticking to my word about not reading the newspaper or watching the news anymore. Yet, I have to admit that I just got back from my spring vacation where I’ll come clean and say that I did glance at a newspaper while waiting in the President’s Club at the airport to see what the news was reporting about our economy. Of course it wasn’t good, and everything was fear and horror, so I quickly put the paper down and went to the Lifestyle section where the news was fluffier and friendlier.
Back to my point, because I did have one! In times like these, with recession looming, the best thing you can do is raise your prices and look into making an upward shift of who your clients are. I just read an article in the New York Times that was all about how entrepreneurs are fearful of raising prices because they’ll lose their clients. It was a well written article but I think the point of it to me was backwards. The real truth of the matter is raising prices is good, and losing customers is also good, it means that the shift you’re making in your business is working. Before you think I’m half crazy, let me explain- If your prices are too low and you’ve made price an issue when attracting customers, guess what- all your customers are going to be price sensitive and probably nickel and dime you to death. The real key for you to realize is you’ve attracted this people somehow to your business. So what you really need to do is change your client model, get rid of those folks and upgrade your clients.
More to my point is when I was on vacation in Las Vegas last week. The biggest and most valued customer in this town is the mass affluent- people who have lots of money and are not price sensitive. These are people who want an experience and want to have fun and are not interested in how much it costs.
We really wanted to see the Grand Canyon, yet after a 5 hour flight, the last thing we wanted to do was jump in a car and drive 4 ½ hours. So we looked at some alternatives. I had heard about helicopter tours of the Grand Canyon but figured it was way out of my league. So I was a price sensitive customer, yet to be honest, I did have the money. I was just reluctant because to me it seemed like too much of an indulgence. We started calling a few places and these folks really know who their audience is. We settled on Sundance Helicopter Tours, which I highly recommend. This was THE most incredible experience I’ve ever had. It wasn’t just the fact that we saw the Grand Canyon from the air and flew over Hoover Dam and downtown Las Vegas. It was the whole encompassing experience of the tour. They come in a stretch limo to pick you up at your hotel and take you to their heliport. All the way from check in to lift off you feel like a very important person. When we got to the Grand Canyon, they serve you a picnic lunch complete with champagne! I took over 200 pictures, (Did I mention photography was much more than a hobby of mine!) and it was an experience that in my mind, I would have paid even more money to take advantage of it. That’s the key- going after a clientèle that values what you do, isn’t a price shopper and you in turn give them a lot more value for their money. (Photo- Harrison, my son in the limo.)
The real diamond in the rough here is when you have the guts to raise your prices, yes, you will lose clients, yet the diamond here is you won’t need as many clients because you’re now charging more money. The other diamond is the clients that stay with you, are mostly likely not price sensitive and are most probably staying because they VALUE you and your product/services. (Photo-Me & Harrison in the helicopter)
So what are you waiting for- raise your prices, make more money and shift your way of thinking today. When you’re in a recession- the best clientèle to have are those people who are affected by a recession last. And those people would be the mass affluent- go get them! [digg=http://digg.com/business_finance/Need_More_Money_Raise_Your_Prices_that_simple]
The amazing Grand Canyon!