Small Steps in Pricing: Why Adjustments Mean More Than You Think

Hello and welcome to this episode of The Pricing Lady podcast. I'm Janene your hostess, and this is where smart business owners come to price with purpose and profit with clarity. I'm excited to have you here with me today. We are going to be talking about small steps in pricing and why small adjustments mean much more than you think. Over the years, I have worked with many business owners who simply put off adjusting and looking at their prices months, but more often, years go by without any small adjustments, and they come to me at a point in time where they are faced with making big, scary changes just to remain sustainable. Not a situation you want to find yourself in. And the tough reality is that if you don't fine tune over time you're going end up at a point where you're going to have to overhaul when you give pricing the right attention on a regular basis, then. Generally, you will only need to make small adjustments and fine tuning in order to keep your business moving forward. It's easier for you, it's less scary, and it is generally less risky. In this episode, I'm going share with you three areas where you might consider making small adjustments that can pay off. I'll give you an example and we'll talk about the impact of each one. Let's get started. Area number one is communication. Now, we like to think that pricing is all about the number, and there is numbers. We're going come to numbers in a minute, don't worry. But a big part of pricing, especially in service-based businesses, comes in the conversation. So it's important for you to feel comfortable in that space. And making small adjustments here can have a big impact, for example. Oftentimes when we're in a conversation with a client and they hesitate with silence, we feel the urge to jump in and fill that silence. No. What if instead of jumping in, you simply paused? Gave them the space to finish their thought, give them the space to think out loud. Maybe it was a hesitation. Maybe they just needed to swallow or breathe. We don't know. You, perceive that as a hesitation about working with you, but you don't actually know if it is. So you need to give them the space to be able to share the why behind that hesitation if it were one, or to continue their thought if they're just taking a breather or need to swallow or something. Right. That pause that you put into that conversation can be very rewarding. Here's why. First you can uncover the real concern if there is one. A lot of times when people object, it takes them a few moments or can I even take quite a few moments, for them to even understand for themself why they've said no or why they're hesitating. You give them the space to be able to voice that. Second of all, that patience and openness in the conversation, it builds trust and rapport with your client. Yeah, so maybe that offer isn't right for them, but they'll be more open to having a conversation about what could be right for them, if they feel that they can trust you, and it just builds overall a stronger conversation. You look better in a sense, in their eyes, in terms of you being a partner for them. And that increases value perception, which can then also have an impact on what they might be willing to pay for something. That's area number one, communication. Just one small example of a light adjustment that you can make to what you're doing that could have potential big impact on your business might actually help you close more deals. Area number two. The numbers I told you, we're going come back to the numbers. Of course, we were going come back to the numbers. Even small, new numerical adjustments can ripple into revenue and profit. If you follow me, if you've attended any of my webinars, you've probably heard me tell the, story, I guess, of the impact of a 1% price change and how influential 1% price changes can be on profitability in a business. So the example here is simply to go back to last year, look at your revenue and then do the math. What if all of your prices had been 1% higher? How much more revenue could you have earned? Now, what if that was over a three year period or a five year period and you had made consistent 1% adjustments over that time, those time periods? That starts to add up quite quickly so micro adjustments can have a compounding effect, much like interest in your bank account. If you still have that these days, has, you know, compounds over time. So do price changes and small adjustments over time can be very effective in keeping your business sustainable over time. Now if you're someone who doesn't love doing the math part and wants a little help with that, I have a free toolkit on my website. We'll put the, the link to it in the show notes. And if you use the profit impact calculator in there, you can do the math fairly quickly using that tool. But small changes can have big impact if you do them repeatedly over time. Now one of the things that I hear from people often when I talk about, you know, small changes in price, is that when you know, they're like, oh, well I charge 2000 if I, you know, bump my price 1%, that's 2020. It's a weird number. Okay? You can do it a little bit more. You can make it 2050 if that's what you, if that feels more comfortable to you. Chances are if somebody's willing to pay 2000, they're probably willing to pay 2050. So it won't have a huge impact on the number of people that are actually buying from you. Don't stress out about that too much if it seems like an odd looking number with just a 1% price change. The point here is for you to consider it and think about it on a more regular basis. Area number three, process I process is so important in pricing. It is one of those things that I simply can't emphasize enough, and even if you're a one woman or one man show, the process is still important in your business. Proposals and offers are part of the pricing experience for you and for your customer. This is where a lot of people get hung up. They're spending a lot more time than they should be on creating offers and things like that. Now, the example I'd like to use here is a lot of people I see don't put a validity date on their offers, and to me this is. Also a pricing risk in a business. So you send an offer out, sometimes you won't hear back from the client for a long time, and you know, six or eight months later they might come back to you and say, okay, we're ready now. And maybe you've changed your prices since then, or maybe you structured your offer differently if you don't have a validity on validity date on there. Then you might feel compelled to accept the terms from before, even though they're not aligned with your new terms. Or you might then have to have an awkward discussion about, well, I don't offer this anymore, but I do offer that and let me send you an offer for this, and so on and so forth. Whereas if you have a validity date on there and that time has run out, yeah, so maybe it was valid through December and it's February. You can say, well, first let's just have a short conversation. Was this still how you wanted to work together? And then I can send you an updated offer. Yeah. So then they have a nice, fresh, valid offer in front of them. Enough people don't do this. And I, I personally, I never understood why it's a very easy thing to do. The impact is that one, it signals professionalism, shows people that you're aware that things change over time and that you want to be able to do the best, not just for your business but also for them. So if you change something in your business and you have to accept old terms. It might actually not be in the best interest of the client as well. That has happened or can happen as well. It adds a bit of urgency to your offer without it feeling gimmicky. Like, uh, last chance. Last chance. No. It just says, okay, I'm willing to honor this for the next two or three months, but beyond that, then we're going revisit it again. And I think that that's, you know, it gives a little bit of urgency, but it's reasonable. Yeah. You're not pressuring anyone. It can help reduce indecision. And speed up decisions. and it protects you over time so you're not stuck, as I said, with outdated offers, terms or conditions. Those are the three areas that I want to share with you. Examples of how you can make small adjustments to either increase your prices over time or to reduce the risk that you have in your business when it comes to pricing. It is important not just to do these examples because I've talked about them here, but to consider if they're right for your business. They may not be. You may need to make other communication related adjustments or other number adjustments. It depends on your business and what's right for you. The power comes from making the right adjustments at the right time in the right way. The problem is that making adjustments to pricing often comes with an emotional charge to it. And so you put it off and you put it off and you put it off, and that's where you end up in that position of having to make big, scary changes. And I'd like for you to avoid that if you can. So to wrap up the episode, I'd like to ask you to reflect on two things. So first are big changes in pricing needed in your business right now, and if so, what have you been putting off now? If you're not sure where to look at what you've been putting off, you might check out the last episode I did where I gave you five questions to do a quick review on your pricing and we'll put that link in the show notes as well. The second question I want you to reflect on is, is there one small adjustment you can make now in your business, whether it be in the communications, in the numbers, or in the process, what is going help you to take one small step forward? That's what I have for you today. I wish you all the best. I'll see you in the next episode, and as always, enjoy pricing.