Dec. 1, 2025

Powerful Business Strategies - Increase Prices

Show Notes
Transcript

Why Business owners fear price increases and what they really should be focused on when it comes to pricing.

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Hi, you have done to the censure Wow for you your.

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This is the pipe Man here on the Adventures pipe

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Man W four c Y Radio with our Positively Pipeman

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segment featuring Michael Barbarita from Powerful Business.

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Strategies and Next Step CFO. How are you Michael?

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Excellent? How are you dating?

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I'm doing great? And I'll tell you what well you're

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going to talk about today could be more appropriate right

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now because okay, you're going to talk about increase prices

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and that is happening everywhere.

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Yes, so let's talk about it.

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But unfortunately my clients, at least at least in the

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experiences I have, they have a fear relative to increasing prices. Yeah, yeah,

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it is a fear. But what the data shows is

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that customers who focus solely on price often require more

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time and attention. They're the loudest and demanding value versus

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those who do not rely on price necessarily, right, those

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are the ones that should be entitled to the best treatment,

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and when you do give them the best treatment, they

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then have fewer complaints and are easy to deal with.

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So that's like the baseline that I'd like to present

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relative to increase prices. The other thing that is interesting

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is that when clients of mind make small incremental price

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increases every quarter or so, so over time, they do

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a couple of things. Number One, it gives them it

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allows them to increase prices eventually where they should be.

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Number one.

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But number two, it also gives them time to increase

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the value of what they're offering to justify these price increases.

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But when they happen small and incrementally, they hardly get noticed.

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So the but the reason why business owners fear price

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increase is because the business owner's perception is that there's

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no discernible difference between the value that they bring and

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the value that competitors bring. So, in other words, they

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don't think that they think that it's only about price,

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and so therefore, if I increase my prices, I'm going

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to lose customers. That's what they think. Now. One of

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the tools that we have at next Step CFO is

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we can show you that how many customers you can

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afford to lose you give us the price increase that

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can plan on having. We could show you how many

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customers you can afford to lose and still make the

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same profit that you did before before you had the

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price increase. So that is usually very convincing to customers,

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actually to clients to actually increase their prices, because what

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they find out most of the time is they can

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lose ten to fifteen percent of their customer base, which

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they don't think would happen in a million years, and

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still make the same amount of money that they did

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before the price increase. And the other fear that the

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business owner has is the business owner uses their own

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financial position, their own wallet, as a benchmark for determining

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what a consumer can afford. And that is totally.

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Bad practice, totally, And I'll add to that too, because

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business owners tend to also speaking in their own wallet.

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If they don't increase prices, they take money out of

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their wallet to pay the increased expenses they have.

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That's right, that's right. I have clients that fear it

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so much, and you know, things like insurance are going up,

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and every other expense you could think of is increasing,

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and they're still hesitant, and despite the fact that I

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show them they could lose in some In one case,

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I showed a client how he could lose twenty percent

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of his current customer base and still make the same

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amount of money that he's making now that he made

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before the price increased, still won't do it, so that

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fear that perception that there's no discernible difference. And I

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have some clients that have discernible, different, clear, discernible differences

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why they are better, Yet they still are hesitant to

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increase price, and they use their own wallet. They use

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their own wallet to determine. You know, I don't think

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I could afford it, so therefore I'm not going to

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charge that price. So it's just and so it's real.

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And when you come right down to it, it's really

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not about price. It's about the value that you're delivering

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versus your competitors. And if you really don't believe that

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you offer more value than your competitors, I'm wondering why

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you're in business.

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Right, And I'll also say that, like, if your customers

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perceive value then and they see that prices are increasing everywhere, Yeah,

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and they may not like the price increase, but it's

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not going to make them stop doing business with you

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if they still see the value.

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That's right. And here's the thing. Here's a rule of

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thumb that I use with clients. What I ask, what

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your closing rate is and if your closing rate is

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between twenty five and thirty three percent, I think your

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price rate, if your closing rate is below twenty I'm sorry,

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is higher than thirty three percent. Your prices are too low.

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And that's a benchmark that I use when I'm talking

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to clients. You know, they're pounding their chess because their

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closing rate is so high. But the reason why their

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closing rate is so high is their prices are too low, right,

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And so if you could fall between that twenty five

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and thirty three percent closing rate, you're probably priced correctly,

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you know. And if you're below that, you're probably priced

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too high.

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And think about all those companies in history that didn't

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lower raise prices. They kept the prices super low. Okay,

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they they're not in business today, but their closing rate

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was very high because people were buying from them because

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it was so cheap.

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Right, that's right. And you know, here's something that adds

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value that that actually Japanese auto dealerships do. What they

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do is they provide potential customers when they come in

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with a small drink menu on eliminated card, and there's

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no big cost to that. You know, they they probably

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have four or five variety of drinks from soft drinks

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and water and that kind of stuff. But you know,

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what if your bank did this for you, What if

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a spot did it. What if a doctor in a

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waiting room did it, what if a hair salon did it?

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You know, these are that these are just different, small

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little things that add value at a low cost.

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Yeah, totally.

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I mean, I was just saying, it's just common sense.

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You own a business, your prices are increased. You have

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to increase your prices to a customer to stay in

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business and flourish, you know. And yes, there's some people

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that aren't going to understand that. There's some people that

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aren't gonna like it, but you're always going to have

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people fall off.

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And I want to put it that way. It's kind

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of like the band.

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That they start getting commercial, they're no longer a garage band,

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and they're they're followers. They're small group of followers in

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the underground. Are going to be like, oh, I'm not

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gonna listen to them anymore.

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They sold out, blah blah blah.

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Okay, so you lost like twenty five people in game

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two million, that's right. You don't think of that that's right.

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And you know it goes back to what I said

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at the very beginning. When you increase prices, you get

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rid of the rid of the pain the next right, yes, yes,

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stop pricing all those pain in the next customers that

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are demanding more value from you at a lower price.

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Oh, I just had that recently.

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Okay, I have somebody that negotiates with me every single time,

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and it's and I'm just like, no, you know, because

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you know, it's always the ones that want you to

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give them the most that want you to charge the least.

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Right, that's right. For whatever reason. I don't know the reason.

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It's a large nature of some sort, but that's exactly

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what happens.

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It's true in every business. When I was in the

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financial business, the people that sent me five thousand would

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call fifty times a day. The people that sent me

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a million never called me, and if I called them,

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I was annoying them.

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Just do whatever. I don't care, you know, right.

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And the reason I bring up that example is because

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there is an answer of why they do it. It's

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because the people that spend the least that money means

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the most to them. The money carries way more value

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than the person that spends the most with you.

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Interesting.

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Yeah, yeah, no, I find that. But I find that

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there's just tremendous resistance from my clients to increase prices.

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And when they do, they're breathing a sigh of relief

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because they see the benefits on the p and L.

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I mean, it's just, it's just it's just a simple

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strategy that could be employed. But I want to stress

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the fact that as you incrementally increase prices, nice and

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small incremental increases, always figure out ways to add more value.

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And yeah, if you do, and if you do that,

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you'll be way ahead of the game and you'll and

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the price increases will be hardly noticed, and if they

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are noticed, they'll be justified with more value.

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It could be small too, like whatever you offer them

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could be a small thing, not a big deal, you know.

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And the fact of the matter is nobody likes paying

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higher prices. But after a while it becomes the norm.

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Like how many of us at our generation, the norm

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for a gallon of gas was eighty five cents, and

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now when it goes under three dollars, we're like, oh

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my god, what a bargain.

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Yeah.

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Customer psychology totally.

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Yeah.

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So just a couple of.

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Questions that a business owner should ask themselves is you know,

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what can I do better this month to make customers

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feel more appreciated, because that's this is part of that

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adding more value stuff, and it makes it easier when

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a client, when a business owner adds more value, it

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makes it easier for them to make the decision to

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increase price. So that's a good question to that people

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should be asking themselves as they're going through this process

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and making small incremental price increases over time.

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My example of that is what I do is because

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I give human customer service instead of AI.

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So like, to me, that's a lot of value.

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To me, that's a lot of value because no matter

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what company I call, if I'm dealing with AI or

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I'm dealing with somebody that doesn't understand what I'm looking

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for and they're just reading the script, like I lose

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my mind, man. But if I can talk to a

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human being, and usually the human being will make me

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feel good.

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Yeah.

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So what I'd like to offer the audience too, if

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they're so inclined, as I have a workbook that I

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have called increased Prices, and it's an actual step by

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step workbook of how to get over the psychology of

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increasing prices, as well as the strategies used to add

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more value and some of the concepts that we talked

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about today. And if they would like that, they could

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just go to my website next step CFO dot net

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and then go to the contact page and put it

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in Workbook on Increased Prices after they fill out the

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contact form the message box, just put workbook on increased

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Prices and I'll send it to them.

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Nice. I love it, so thank you so much.

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You give us such great insight for businesses, and I

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think people need it more than ever right now because

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of a lot of reasons pricing, technology changes, evolution or

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you know, if you're a business right now opposed to

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fifty years ago, you can't afford to snooze for even

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a day, okay, Like you have to be on top

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of it what you're going to do to provide more

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value and to be able to sustain profitability. Like you know, listen,

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everybody would love to say like they bought something at cost,

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but companies can't survive that way, Okay, So you have

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to be the type of mentality that's like you're okay

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with the business making a profit, but as long as

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that value that you're getting is worth that profit. So

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thanks for all this great advice.

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Everybody.

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Increase your prices and increase your value, and pay attention

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to Michael Barberie and check and check out next Step

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CFO and you too could not only get this workbook,

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but could get help in your business to grow.

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So thanks once again.

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We'll see you next week on the Positively Pipemin segment

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of the Adventures of Pipemin.

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Thank you pleasure to be here. Thank you for listening

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to the Adventures of Pipemin on w for CUI Radio.

Powerful Business Strategies - Increase Prices

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