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How to Increase Your Profits Margins (by 300%)

Story time!

The other day, I was strolling through a cute shop in downtown Olympia – it’s one of those stores that sells purely tasteful clutter: “catch all” dishes, books on trendy topics like airplants and minimalism, journals with about a zillion different cover designs and prettily packaged beauty care products.

These are seriously my FAVORITE places to window shop – they have THE cutest things!

So, as I was strolling, I stumbled upon a section that made me stop for a full couple minutes. It’s like when you’re at Target and their seasonal decor section is just SO perfectly on point, that you have to look at every 👏🏻 single 👏🏻 thing before you put it back on the shelf, haha.

One thing I picked up was this teeny tiny bar of soap – probably 1.5″ square. The minimalist and frugalist that I am, I turned the bar of soap over to check the price tag and you know what I totally wasn’t surprised to see (that just seems crazy in hindsight)?

I wasn’t surprised at all to see that this teeny tiny bar of soap was marked at $5.95.

Like WHAT? For this tiny bar of soap? I can easily get this same exact product for $1.50* almost anywhere else (*I talk about this more below).

 

The experience of OWNING it, even if I only look at it and never use it, is worth it alone Click To Tweet

How to Price Your Services

But you know why I wasn’t surprised to see this number?

Because the package that it was wrapped in was SO pretty that I knew from the second that I saw it that it was going to be one of the most high quality soaps that I had ever used or bought.

That, the experience of OWNING this soap, even if I just look at it daily and never use it (because, let’s be honest, I only bought it for the packaging, hahaha!) was worth it alone.

And because it truly, honest-to-goodness spoke to me.

The soap. It spoke to me.

You now have permission to call me the crazy soap lady.

 

How to Price My Products

 

So, why is this relevant? and why am I bothering you with my shopping story?

Because branding is everything.

For those of you in the back of the room:

Because branding is everything.

Here’s an example:

  • You can get a 4oz bar of Dove soap from Costco for just over $1 per bar.
  • You can get a bar of the same sized artisan soap from Etsy for around $5 seems to be average (they range from around $3 to $7).
  • With this assumption, a .7oz bar of artisan soap should be around 90 cents (this is how big the bar was that I just bought).
  • Let’s adjust for the differences with individually packaging this soap and you know, just overall additional costs of producing more of something, even if it’s smaller – we’ll round up to a whopping $1.50 per .7oz bar of soap. I think that sounds reasonable.

 

So, we assume that this 1.5″ x 1.5″ bar of soap should typically cost around $1.50.

And I just bought one for $5.95. That’s a 300% increase in cost and virtually NO difference in the product.

Except for the branding.

Do you see where I’m going with this?

 

Now here’s how this same thing could work for your business:

What if you were currently charging $150 for a portrait session (anyone currently here, or been here before?) and you could increase your price to $595 for the SAME package?

Without changing a thing about your end product.

As far as I’m aware, the bar of soap that I bought is NO different than the bar of soap that I could have just as easily bought on Etsy. It’s even (very) possibly that it’s not nearly as good as some soap on Etsy.

 

How to Price Your Services

 

But you know what else gets wrapped up into this equation?

 

I KNOW that I would not have purchased this same bar of soap on Etsy or at a Farmers Market*

I would never have spent $5 or even $1.50 on a tiny bar of soap on Etsy.

(*unless the soap looked exactly the same, was photographed in a way that made the experience as unique, etc.)

That’s not to say that I don’t like to support small businesses (in fact, I LOVE supporting small businesses). It’s only really because there was no reason for me to buy it in the first place.

And in my own personal world, a tiny bar of soap priced at $1.50 seems crazily overpriced if the only reason why I’m buying it is for functionality.

 

But I didn’t buy it for functionality – I bought it specifically because it filled the purpose of impulse shopping or wanting something that I didn’t know that I wanted.

Buying a luxury product for only $5? Now that’s a steal.

 

I bought this soap, not because I needed it, but because I HAD to have it.

The packaging spoke to me. And this is what branding is about.

Connecting with people. Creating a story that’s more than functionality.

Functionality has an appropriate price tag (“I want to make $30 an hour because that’s a reasonable amount to ask)

Luxury is about selling a feeling and an experience (“I want to sell my service for $600 because my clients are experiencing something unique and amazing… even if it’s only THEM who perceives it this way”)

 

Your clients will buy your products, not b/c they need them, but b/c they HAVE to have them Click To Tweet

 

So, how can you apply this to your business?

1. How much are your products or services priced at currently?

2. How much do you wish they were priced at (don’t think about the, “well, if I got better at this, or upgraded my equipment to that, or if I had more time for this…” – drop those. We’re only talking hypothetical numbers here, you don’t need to justify anything to anyone, girlfriend)?

3. And what number makes you squirm in your chair?

 

That last number – the one that makes you a little uncomfortable – that’s the number that great branding will get you to.

I don’t care if that number is $30, $300 or $300,000.

Branding – your visuals, your voice, your personality, your story – that’s what will get you there.

 

Ready for it? Take this free worksheet, friend!

We’ve made a worksheet for you to help you to reverse engineer that uncomfortable number.

Really, what it comes down to is choosing that number and then figuring out how to get there. We’ll be doing a series of emails on how to get there, too, so hold onto your pants – we’re going to get into the nitty gritties!

 

Have questions? Let us know in the comments!

And for the curious folk, here’s the silly little bar of soap in question

 

CURRENTLY ENROLLING: We’re going over client gifts (branding them, customizing them, figuring out how to price them into your packages and more) in our 6-Week Brand Intensive! If you’re looking for a way to increase your client experience, branding visuals and/or strategy and flexing your marketing muscle, then this program is for YOU. View more info on what’s going down here.

How to Price Your Services

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