December is the time of year to reflect on the last eleven months and plan for the next twelve. Did you set a revenue goal last December? Did you accomplish it?
I had this very conversation with myself six years ago. (Yes, I talk to myself.) It had been a successful year, but a stressful one. My business was making money, but I was working hard (really hard) to earn it.
Then I discovered a new way of doing business that changed my life for forever…
How I Went From $450K to $750K In a Single Year
You probably want your customer to be in a better place after working with you–a natural outcome of serving them. Sometimes we call it “value”.
Focusing on creating value for the customer should be obvious. However, using that value to set a price is not so obvious. This change has made the difference for me.
'I focused on value and in just 2 years we went from $450K to $1.2 Million.'Click To Tweet
In 2010, I made a commitment to focus on creating value for the customer and setting a price based on that value. That year, my revenue increased from $400K to $750K. The next year, it increased to $1.2 million.
Pretty sweet! Here are four steps to help you do the same thing:
1. Believe in the Value You Create
It starts with your mindset. Do you believe you create value? You do. In fact, you create more value than you realize. You simply need a set of “value eyes”.
It is human nature to undervalue what you do. Sometimes, we even adopt it as a false form of humility. Yet, if you could see the results of what you do through the eyes of others, you would be amazed.
You have to develop this perspective. It is simple. If you do not believe you create value, you will not create value.
2. Discover Value from the Customer’s Perspective
Once you believe you create value, you need to see it through the customer’s eyes. You often hear, “Beauty is in the eye of the beholder.” Well, value is in the eye of the holder, meaning: it is subjective. You perceive it one way. The customer perceives it another. It is the customer’s perception that matters, especially when it comes to setting a price.
How do you perceive value through his eyes? Ask great questions. Ask the customer what he needs and wants. Ask the customer about his dreams. Why does he want this “thing” you are going to do together?
3. Create Options to Give the Customer a Choice
Once you understand the how the customer sees value, now comes the fun.
What happened the last time you went to Starbucks? The barista probably said something like, “Would you like Tall, Grande or Vente?” The barista offered you a choice. As a customer, we love choices. You can create a range of possibilities to achieve the outcome.
The next question is, probably, “How many choices?” One choice is simply yes or no. Three choices change the conversation in the customer’s mind from “Will I work with John the Consultant?” to “How will I work with John the Consultant?”
This subtle choice is the power of options.
4. Start Pricing to Create High ROI
With three options, you have three different outcomes. Each has its own ROI (return on investment). Before you set a price for an option, consider the ROI first.
Ideally, you want the ROI to be at least three times the amount the customer pays. The higher the ROI (3x, 4x, 5x) the easier it is for the customer to make a “yes” decision. Also, greater ROI allows you to set a higher price.
In addition to the financial ROI, consider the emotional ROI. Will the business have improved customer satisfaction, higher employee morale or increased productivity? These factors also influence the price you set.
How This Gets You More Income With Less Work
These four steps will help you increase your income next year. If you increase your income, you can work fewer hours. If you work fewer hours, you can spend more time with your family and on other endeavors you enjoy outside of work. Perhaps, you can even take a vacation!
If you would like to learn more about these four steps, I invite you to my free class: How to Get Paid 10X MORE for What You Already Do. It will be live this Thursday, December 10, at 7pm Eastern. And since it is the Christmas season, I will have a free gift for you during the class. Click here to register now.