If you want one simple action to improve your course business over night, it’s this: raise your prices.
To understand why this is true, I’d like you to go through the mental exercise of tripling the price of one of your main (or perhaps your only) course. If you don’t have a course yet, simply triple whatever you are currently planning to charge for your course.
I want you to triple it because, in most cases, this is enough to cause some significant discomfort without seeming completely unrealistic (like, for example, multiplying by 10 might).
- How would you much better describe and communicate the value of your course to justify the new price?
- How are the outcomes you help your learners achieve worth the new price? That is, how will you improve their situation – their ability to achieve their goals, to solve a costly problem, to earn more – so much that the price of the course is a no brainer?
- What value might you add to the course to more than justify tripling the price. This might include things like simple checklists and worksheets, case studies, group coaching, or a periodic Web conference to answer questions.
Put some thought into these questions and actually write down your answers. And don’t stop at your initial notes. Really push yourself to find value that justifies a higher price.
- How are your prospective customers likely to perceive the value of your course at a higher price? Remember, price is perception. Low price is very often perceived as low value, and vice-versa.
- How is a higher price likely to impact the quality of learners you attract? Very often, those looking for a low price are going to be (a) the least committed, (b) the most likely to complain, and (c) just as hard or harder to sell to than those who are willing to pay more.
Again, really think about it and even write it down. Who do you really want to be dealing with as customers in your course business? What kinds of learners and relationships are going to make your efforts feel worthwhile and fulfilling?
And, finally, understand that:
- A higher price is by far the most effective way to increase profits. The big consulting firm McKinsey & Co. demonstrated years ago that a 1% increase in price translates into an 11% increase in profits. On the other hand, increasing sales volume by the same amount resulted in only a 3.3% increase. Cutting variable costs by 1% resulted in a 7.8% increase and cutting fixed costs – only a 2.3% increase.
If you want to dig into this point a bit more – as well as other “axioms” of pricing – check out the following video:
Making It Real
Hopefully you’ve understood that, at a minimum, this exercise helps you to be much more strategic about your business and to communicate the value you offer more clearly.
That alone can give you a huge boost, even if you stick with your current pricing. You will be much more confident, and much more able to convince prospective learners – and yourself – that your course is more than worth every penny you charge for it.
But I urge you to make this more than a mental exercise.
Even if you aren’t comfortable with tripling your prices, seriously consider raising them. You’ll get at least some of the benefits covered above. You’ll also help yourself develop the mindset that pricing is a valuable tool in your course business toolbox – one that it really pays to become skilled at using.
P.S. – If you are interested in more about pricing, I encourage you to check out How To Price Online Courses – 10 Tips from 20 Years of Experience and watch my brief talk on effective pricing practices.