Have you been thinking about raising your prices? If you have, that means you’re already way too late. You should have already raised your prices a long time ago.
Back in the 1990's, when I was a student, I didn’t have enough money to just study. I had to work as well. One of my first jobs was selling books from a folding table in the street. Every day we sold books to people going from a subway station to a bus stop.
One day, someone decided to throw in a couple boxes of cigarettes along with the books. It didn’t look like a good fit at first. But then I started offering cigarettes to people who were looking at books. It worked.
By just asking, "Need cigarettes?" I made almost as much revenue as from books. And what’s more, they were buying from me at a higher price than they would at a cigarette kiosk just 50 feet away. I started to buy cigarettes at this kiosk and sell them at my folding table at a 20% surplus.
The next thing I noticed was a queue of cars at a traffic light next to our subway station. I figured I could walk from car to car and offer cigarettes to drivers and passengers. And the sales went crazy! I started selling cigarettes at a 40% surplus, still buying them at the kiosk.
I didn’t think of myself as a salesman, but this was my first lesson in sales: You need to provide value, and the value is not always in the primary function of your product. My customers had a problem: it was hard for them to find a parking spot to go buy cigarettes at a kiosk. And here I was, solving this problem for them for a 40% profit.
Price and value always go hand in hand. If you provide more value, you can increase the price. If you increase the price, you have to create more value.
Raising your prices is the most effective way to improve your product. You raise the price and try to make a sale. Customers start to refuse. You then have to talk to them, learn about their problems and needs, improve the product, and make it worth this new, higher price. Eventually, they start to buy. Then, you raise the price again.
The same box of cigarettes sells for very different prices to different people with different problems. So is your product. Now go talk to your customers and find a way to sell at 2x your current price.