This is the 3rd video in the Coffee Chat Video series, 7 Accelerators to Double Your Income.
ACCELERATORS 4 AND 5: Value of the Transaction
Of all of the Accelerators, 4 and 5 are the ones that I find many entrepreneurs, particularity women, need to work on. Many are selling time for dollar instead of selling the value of their services and offering solutions that include more than 1 item. They are undervaluing their business and as result they are settling for a lower transaction value and a lower profit.
Accelerators 4: Average Price
What is the average price of your transaction? Are you undervaluing your service? How can you increase you average price?
Accelerators 5: Number of Items per Transaction
How many items do you normally sell per customer? Have you thought about that? How can you increase the number by 10% or 15%?
Watch the video below to learn about Accelerators 4 and 5: Value of the Transaction. I’m passionate about this particular accelerators. In the video I share examples of how clients have increased their Transaction Value and I provide ideas on how to increase each one by 10% to 15%.
What is the average price of your transactions and the average number of items.? Do you know? What could you do to increase them? Please share below.
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I love to see entrepreneurs follow their passions, serve more people and create the lifestyle of their dreams.
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Takara – Love what you shared. Getting the purchase a low price item – the no brainer. Then offering a upsell to a higher price item. Your aim is to get 10% to 15% to buy.
Many of us struggle with the pricing, I find that out in my coaching business. You have great tips and advice in this post. Thanks for sharing with us! Great lesson, Heather!
Norma – thanks for commenting. Yes many people struggle with their price and setting it at the value it worth. We are so “trained” to charge for our time.
This is not easy for me to figure out! I try to stay competitive with everyone else but I would love to include free shipping for my products. I am unable to figure out how to do this due to each item has a different weight!
Barbara – it is difficult when you are dealing with physical products. But like many others companies can you add free shipping when they buy X amount of products?
I like that you bring up the question of underpricing. I think a lot of folks underprice themselves. So I hope this gets folks to honestly assess the value they are offering and go for it!
A. Lynn – You are so right so many people underprice, particular women. They either aim for the wrong market or they just don’t know how to set a price. I had a great conversation last night with someone who estimated her price based on what she earned as an employee. She was underselling her services. She has been slowly increasing them and without issues. No one potential customer has said her prices are too high.
This is quite a struggle for me – finding the right pricing. It is such a precarious balance to find the right price that will actually encourage people to buy. I know that what I offer is of value but I can only charge what the market will bare. This is hard to find out.
Ines – Yes and no, you can only charge what the market will bare but don’t under estimate what the market will bare. For example some people drive $10K and some drive $50K cars. If you market can’t bare a higher price are they the right market? Can you step up your market?
The price of the products I sell are set by the company I distribute for. Our motto is “Up to a standard, not down to a price!” The products are priced according to their value and the standards set by the company.
Pat – it is interesting for people who have set prices as you can’t increase the price of the products. However you can offer you unique services around the product. Some one on one consultation – aim is one out every 10 people are interested.
Figuring out how to do this “charge for value” is something that is so powerful and so needed. Getting to this has been a long journey for me and switching from the “live your passion and the money will come” to the practical aspects, the math, is something to embrace. I’ve run from them ‘cuz I felt they told me I was a screw up. Thanks for showing me a different view of math!
My particular “gifts” if you will are in automating and systematizing things to help others…now to figure out this accelerator for my business!
Nicely done…well done.
MamaRed – “The Math is Something to Embrace.” It is! – You need to apply your gift of systemtizing your own business to increase each accelerator by 10% to 15%
Even when I worked for other people, I never understood the “hourly” mentality, especially as I often was able to complete the project in less time than would have been anticipated. Also, when I designed jewelry, people did not value the time and craftsmanship that goes into the finished project and I found that my pieces (in order to sell) had to be prices at what the market would pay. I agree that a value based way of being compensated makes the most sense, regardless of the business. Value of the transaction, is a great way to structure how we charge for what we offer others.
Beverley – Great examples. The jewelry is an excellent example of understand the market value versus your cost. A customer pays to have a project done, the value to the customer is having it done not the amount of time you take. If you can do it in less time, guess what, the customer is going to be happier and arguably it is of more value to them.
Thanks for sharing such great examples.
When I first started selling my handmade jewelry I didnt account for my time or overhead. Now I do. Its a lesson we all need to learn.
Roslyn – It is important that your value based pricing covers your cost (time and overhead). If it doesn’t and it the value that your market is willing to pay it is possible that there isn’t a profitable market for your product or that you need to market it in a different way.
Thanks for the pointing that out. It is a important part of your profit margin.
I changed my way of charging for my services from hourly to a value based fee structure long time ago. There are some services that still require hourly, but I find that I need to charge what I am worth. It is a hard pill to swallow for some, but I know what I need to run a profitable business
Veronica – “I find that I need to charge what I am worth”. Love it, and that is the trick, knowing what you need to run a profitable business, then next step is determining how to grow those numbers by 10% to keep increasing the profits in your business.
We call this “perceived value”. It works in our industry because people are prone to order flowers and gift baskets from pictures. Thanks for sharing this information.
Tina – You are very luck that people see the value of what you do. For many business we have to be good at marketing our value and creating our prices based on that.
Thank you for sharing your knowledge on how we can accelerate or income. Growing our business is important and we all can use advice on how to look at our numbers and see where we need to improve so we get the results we desire.
Meryl – thank you for the feedback. It is important for us to control our businesses and doing it through our numbers is key to creating the growth we want.