Premium Pricing – Controversial but Common Sense

I’ve been reading a lot recently from people I admire and listen to on the subject of premium pricing. With me, they’re very much preaching to the converted, but there are still a lot of business owners – in a wide range of businesses – who find the idea of setting (and sticking to) premium prices difficult or just plain wrong.

When you look at it objectively, premium pricing is just plain common sense. Why sell your time, or anything else, for less than you could? Firstly, you earn more money. Secondly, you drive away the penny-pinchers who are almost always the most demanding customers – if they buy from you at all.

Raising your prices will increase your profits by far more than you might expect. Let’s say it costs you 80 pence to make the item you sell for £1. That’s 20p profit per item. Increase your price by twenty percent, to £1.20, and your profit will double, to 40p.

If your costs are less, for example if you provide a service and sell your time and expertise rather than physical items, the benefit of a twenty percent price rise will be less marked. However, the benefit of a big, bold price increase will be even more marked, because penny-pinching tyre kickers are much more annoying when you’re trying to work with and among them. Nothing is more certain to drive them elsewhere (to your ‘competitors’) than higher prices.

How much should you increase your prices? Well, you could look at what everyone in your industry charges and take the average. But that could be disastrous, because it’s likely that most people in your industry don’t charge premium prices. And that means you’ll be working for less than you could and almost certainly for much less than you want to.

What’s more, you’ll be dealing with the penny pinchers who are shopping around for a cheap service rather than a good one. You really don’t want to be doing that.

So, a better place to start when you set your prices is to decide how much you are willing to work for. Then decide how will you give that much value to each unit of your time. Position yourself as an expert, a professional and someone who discerning customers can trust.

In the end, premium pricing isn’t just about filling your own pockets. It’s also about providing a better service that justifies and reflects your higher prices. Therefore, outstanding service and premium prices are two sides of the same coin. By working with or for fewer customers you can deliver more for each one. By charging more for what you do you are able to work fewer hours overall and only with the customers you choose.

Someone will always undercut you, however little you charge. Let them. You’ll be surprised how little price matters to a customer looking for a good product or service.

Try raising your prices tomorrow. What’s the worst that could happen?

So You Voted the Wrong Way?

So, you got it wrong on the big day?

Did you vote for Brexit and regret it as soon as the result was announced? Did you vote for Jeremy and wonder why Labour lacks effective, vote-winning leadership?

Did you vote Conservative because the Lib Dems got it so wrong and broke their promises?

You don’t need me to tell you you should thing carefully before you cast a vote that could change the way the country, and even the rest of the world, operates in the years to come. And yet…

…it seems many people realise pretty quickly afterwards that they got it wrong on the big day, But do they think about why that was and how they can avoid the same mistake next time?

Let’s look at Brexit. Clearly, there were a lot of reasons why people voted ‘leave’. The problem was, they all got added together in the final count. From xenophobia to misunderstanding how the EU works, to believing the Brexiteers had a coherent plan (and the means to implement it), all these factors were weighed against the status quo which, while generally the easier and safer option, isn’t particularly exciting and definitely has its problems.

“Can we fix it? No, let’s leave”.

On Corbyn, many people joined the Labour Party specifically to vote for him. But why? Because, I think, they felt they were voting against Cameron and the Tories. They weren’t, of course. They were voting against the people who could just possibly beat Cameron and Co when the next real vote comes around. And, for all the overwhelming support he has among Labour members, they still amount to a very small proportion of the electorate.

As for the Liberal Democrats, since when did the minority party in a coalition get to implement more of its policies than the majority party? The Lib Dems, as we have seen since, ameliorated many of the Tories’ more extreme policies and yet got the blame for most of the less popular decisions made during their time in ‘power’. Clever politics (and media control) by the Tories all but destroyed the Lib Dems next time around. They’ll be back but not until time puts events into historocal perspective.


One thing Brexit has done is upset the status quo for all the major parties. Labour is suffering most (if you believe everything you read), but if Corbyn was more secure you would probably see the Tories fracturing before your eyes. In truth, they’re in much the same state, except that they’re in power, with more access to media and good PR.

The Lib Dems, meanwhile, are still licking their wounds. Just a handful of MPs and a disheartened membership aren’t the most obvious starting point for a major recovery but a strong and consistent message now from a media-savvy leadership could recapture the middle ground they held so recently. Rabid racism, reactionary socialism and old school tie Toryism each only appeal to small minorities. Most of us are moderate. Most believe in something like social democracy.

For thoughtful voters, moderation is instinctive and natural. Something like the status quo (always with room for improvement) is probably the preferred outcome for most of us.

Just think next time. What are you voting for and what are you protesting against? What effect will your vote actually have on the people and institutions you want to protest against? Did voting for Corbyn actually hurt Cameron one bit? Does Brexit make Britain better? Did punishing the Lib Dems help to stop the nation’s slide to the right?

Ask yourself: how can I have a more positive effect on the future?

Think. Vote, definitely. But please think very hard before you do.

Sound as Clever as You Are

How the words we use shape the way we think – and what others think of us.

Roy Everitt on marketingThe language we use every day has a clear impact on the way we think and the way we are able to think. Everyday language shapes our understanding of the world and the way we communicate with others affects how they think about us.

Here’s a very simple example: in winter, the temperature will often fall ‘below freezing’. By this we mean below zero degrees Celsius (or 32 deg F). In fact, there’s no such thing as freezing point, since pure water can stay liquid a long way below this temperature – as low as minus 30 degrees C. On the other hand, water ice can’t exist above zero deg C for more than an instant. So, what we call freezing point is actually the melting point of water ice. We should really call it ‘melting point’.

If you didn’t know that about water and ice, the common term ‘freezing point’ will have been misleading you your whole life…

Now, that might not sound important, but it is if you’re a pilot in sub-zero cloud, whose wings are icing up as the cloud droplets freeze on contact with your aeroplane.

And think about all the other things we might say or hear every day that aren’t factually correct (or are at least debatable). If we say ‘God willing’, for example, do we meant to tell people we believe in God? If someone else says it, do we assume they’re believers? Or do both we just mean ‘with a bit of luck’? This may or may not matter to you but it’s vitally important to millions, if not billions, of people around the world.

When we speak or write we are often saying much more than we realise. People gather information, right or wrong, from the words we use and their opinion of us can be affected by the phrases we employ without a thought.

As annoying as it can be, having someone challenge us on our choice of words and phrases, even on the assumptions they imply, can be a very good antidote to lazy thinking.

Your language doesn’t need to be complicated or clever to be accurate. But it does need to be carefully chosen to be as clever as you are.

Unfocused Anger

Roy Everitt on marketingThere’s no shortage of things in the world to be angry about – and I’m not about to give you a list you can easily make up without my help – but there is a lot to be happy and grateful for as well.

And while I’m impressed by people who campaign on one or many issues of injustice, cruelty and the like, I’m much less impressed by people who seem to have an unfocused anger that they can turn to any issue that comes up. Continue reading