#99: How to increase your profits with this one strategy tweak
The Founder Podcast
Chris Lee
5 • 1.4K Ratings
🗓️ 10 May 2024
⏱️ 19 minutes
🧾️ Download transcript
Summary
Welcome to a new episode of The Founder Podcast. In today’s episode, we discuss the strategy behind pricing your offerings. We take a deep dive into why positioning yourself as a premium option can enhance your brand's perceived value and boost your bottom line. We explore strategic pricing insights, debunk the myths around being the cheapest, and share actionable tips to help you price confidently.
Highlights:
"Every dollar more that you charge is a step closer to not just profitability but sustainability and quality in your business."
"Being the cheapest means cutting corners, but charging more allows you to invest back into your products and services, enhancing overall customer satisfaction."
"Price your product not just for the market, but for the quality, longevity, and experience it offers. That's the true value."
Timestamps:
00:00 - The Pitfalls of Underpricing
00:43 - Setting the Stage in Pricing
05:00 - The Luxury Margin
06:17 - Comparative Economics: Louie Vuitton vs. Marshalls
08:20 - Small Price Increase, Big Impact
09:10 -The Real Cost of Pricing Too Low
10:00 - How a 10% Price Increase Translates to 33% More Profit
12:45 - Educating Customers on Value
15:00 - Avoiding Apple-to-Apple Comparisons
16:55 - Are You Undercharging?
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Transcript
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| 0:00.0 | Are you tired of being underbid by your competition? |
| 0:03.1 | Does it ever feel like the only way to sell more of your product or service |
| 0:07.2 | is to lower your price? |
| 0:09.0 | Where does this race to the bottom ever stop? |
| 0:12.0 | And how do you maintain profitability. |
| 0:14.0 | On this episode I died into one of my most controversial topics. |
| 0:18.2 | How do I set up my pricing? |
| 0:20.2 | Expect to learn why you should be one of the most expensive offers in the marketplace. |
| 0:25.0 | How $1 more to you means so much more than $1 extra from the customer. |
| 0:31.0 | And how you can create an offer that produces so much value |
| 0:34.8 | that it creates a true apple to oranges comparison. All this and more on this |
| 0:40.3 | episode of the founder podcast. |
| 0:51.0 | All right, so now we are diving into probably my favorite aspect of running business, the price. How we are positioned in the marketplace. In fact, when I work with business owners, |
| 0:56.2 | this is almost always the first thing that I address because most people get this wrong. |
| 1:03.6 | And it's really understanding, like, |
| 1:05.7 | what should I be charging to my end user? |
| 1:08.4 | We've all been conditioned that like, |
| 1:10.9 | the cheaper, it's easier to sell, easier to offer to our end user I want to give people |
| 1:17.1 | the best product at the best price which typically ends up being that I am going to provide really good service at super cheap |
| 1:27.6 | which means the only way I can get to really good services I have to pay really good to the employees, really good product or whatnot. |
| 1:34.4 | And if I'm charging the cheapest, it means a shrinking of your margins or ultimately the amount of money that you are taking home. |
| 1:41.3 | This was one of the first mistakes that I made as a business owner at the right age of 24 when I launched my first home security business. |
... |
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