Sometimes when running a small business, we need to remind ourselves: it’s a business, not a charity.
When Is It Time to Raise Your Prices?
“did you see my text”
me: pic.twitter.com/ITtD3Z9a9M
— (@boujeesIut) December 25, 2018
So, why now? Well, Netflix has an extremely popular offering and they know that raising their prices $2 here and $3 there won’t lose them many members. They also know this change will bring in big revenue.
To say it plainly: people are hooked on Netflix– and few (if any) will leave just because of a price increase.
So, what’s the lesson?
- When you offer a GREAT service its OK to raise prices a reasonable rate.
- Since they have such a strong brand. Customers are less likely to leave.
- Branding matters, and when done well, a brand can become a part of people’s lives. (think Apple, Google, and more)
Before raising your own prices its important to know: Are your prices set at the right rate?
- When you think about your ideal customer their budget, how does your product/service work into their life?
- Do you have a loyal group of followers (either on social or otherwise)?
- Do your followers recommend your product and feature it on their social services?
- Are you making a profit from the revenue produces by your product?
- Are you offering a valuable product or a luxury product?
When your customers pay more for your product or service– they are expecting more. Consider your brand positioning.
The goal, no matter what you sell, is to be seen as irreplaceable, essential and priceless. If you are all three, then you have pricing power. When the price charged is up to you, when you have the power to set the price, there is a line out the door and you can use pricing as a signaling mechanism
Netflix has definitely accomplished this. They are irreplaceable, and essential to many people’s lifestyle. They have millions and millions wrapped around their finger.
So, do you have an irreplaceable product your users will gladly pay more for? Or is it time to rethink your current pricing?
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