Sep 30, 2023

Canmore, AB 
“You should price it for $197 instead of $200….”

Can’t read the full email – click here for the online version.

That was my comment to my wife when she listed an old, but in excellent condition, tent, for sale on one of the many local, online sites. She scoffed at my idea. I mean, who falls for that kind of trick?

Since pricing is such an important topic, today, I am including an excellent article by Dan Kennedy, on the subject…

“When we see a car priced at $89,995 one part of our brain chuckles at the silliness of it. Who are they kidding? Our brains say. It’s ninety grand. BUT another part of our brain still reacts positively to the price coming in short of the 10, not quite the rounded-up number with the zero at the end. 

“We can’t help ourselves. People know they are being gamed with $9.95 or $9.97, but they still feel a lot better about hearing it or seeing it than hearing or seeing $10.00. And I assure you with every fiber of my being and every ounce of my 47 years of experience, how they feel is much, much more important than what they know or think - before, during, and after purchase.

“All pricing should either stop between a 4 and 5 or if it’s going to click over the 5, it might as well go between 8 and 9 or the 9 and 10. There is no reason to stop anywhere in between. 

“When I sold the Magnetic Marketing System from the stage, during my peak speaking years, for most situations it was priced at $397. And most years I was selling over $1-million worth. I did some split testing of different prices, dropping to $395 and going up to $399 and to $400. These tests persuaded me that there was no difference in units sold, percentage of an audience buying, etc. from $397 down to $395 - but there was slippage in quantity sold moving up from $397 to $399 and a significant drop when trying the blatant round number of $400. Thus the $2 per unit between $395 and $397 was gravy and I will admit trivial. 

“But, the surprising test revealed that there was virtually no difference in units sold with the price dropped to $297. That extra $100 x number of units sold was not trivial. 

“Too often, pricing is done by the assumption that a lower price buys disproportionately positive volume, but t’aint necessarily so. 

“Warren Buffet’s #1 rule about investing is: Don’t LOSE money. It’s my #1 rule about pricing!

“The actual price of your product, the testing you do to find the absolute maximum value you can extract is just the tip of the iceberg that will fuel (or dampen) growth and the wealth you can extract from your business. 

This is such an important topic that we have developed an entire training on pricing, costs and margins, where we reveal how:

• Massive under-pricing leaves businesses highly vulnerable to competitors. This training explains how to flip the equation, putting YOU in a position to invest MORE than your competitors so you can get more MORE, get BETTER, do MORE, and DOMINATE!

On practical terms, here is what you will learn:

• How you can find instant and immediate cashflow as a small business owner
• How to uncover hidden revenue using your P & L statement
• Understand the 3 KEY numbers in your P & L statement
• 6 options you have for increasing your gross revenue
• 6 factors that destroy your business' ability to make money
• 6 quick ways we can lower your cost of goods sold
• Multiple ways you can lower your overhead costs

If you are a Real Business Mastery member already and don’t have access to this training, then reach out to me directly. I can get you a discounted price.

If you are not member, then you can get access to this for only $997 and, for a limited time, receive a free year’s membership to Real Business Mastery – normally $4997!

Simply head to: https://realbusinessmastery.com/financial-training

Until next week,

Stay healthy and focus on profit! 

- Hugh 
The “Profit Accelerator” Expert

P.S. Are you an independent CPA or Financial Professional, who works with small business owners? If you are, then you would like my latest presentation: “How I added $298,200 to a client's bottom line simply by examining their financial statements”.
You can get the replay here. cpamagic.localbizmastery.com

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