In most cases, you can increase your prices by as much as 15% by moving from left to right.
But what if you wanted to increase your prices by, say, 20%, instead. Well, then you move from right to left. What does all of this right, left, right mean?
Well, listen or read this pricing article and it will make sense in a few minutes.
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Note: (This is an unedited transcript)
When I was a child, I had this riddle that confused me for a while.
The question was, is it the same distance from Christmas to New Year as it is from New Year to Christmas? I know you're thinking about it too at this moment.
And today, here's a short tip on pricing.
We all want to increase prices, but we don't know how. If you've read the book, “Dartboard Pricing”, you'll have run into a concept called “The Yes and Yes Principle”. Instead of having three options like “Silver, Gold and Platinum”, you just have two options.
And with those two options, you're able to get the prices that you want and increase your prices. Now, my suggestion is that you increase your prices between 10 to 15%. And you'll see this right through the psychotactic site. Maybe you'll go by the product, the awkward pricing, and there will be a price of $39 and $42.
Well, what's the difference?
It's less than 15%. And this is very crucial because the customer is making a decision between yes and yes.
You don't want to have many options. Just two will do the job. But what if you wanted to increase your price by 20%?
And this is where the Christmas New Year left to right and right to left seems to work. Let's say you wanted to increase your prices by 15%. On the left-hand side, you have the regular option, that's a hundred dollars.
On the right-hand side, if you increase the by 15%, it will be $115 or less. So now the client has to choose between $100 and $115. The difference is at $115, they're getting value because you're giving them a bonus, so they're getting value of maybe $125 or $135.
So, it becomes a no-brainer for them to choose the premium option. The regular option they look at they choose the premium option. I'm just simplifying it here. There is a video on YouTube, go and look for yes-yes psychotactics, and it explains all of it in great detail.
Essentially what you're doing is you're increasing your prices by 15%.
And let's say you're not greedy, but you want it to increase your prices by 20%. You want to do test whether that price level is doable. Well, here's what you do. So far you've been going from left to right. You've got regular at $100 and premium at $150.
But what if you went from right to left? You wanted to increase it by 20% remember. So that would make it $120 as a premium. And that's when you go from right to left. You start with $120 and then you go to the left.
And that would be $103. So now you have two options. 120 on the right, 103 on the left. And you still have the 15% margin or the 15% increase. But now you've done it the way that you want to do, which is the test surprise that you were keen on testing and that's how you do it.
It's a bit like Christmas and New Year and New Year and Christmas, but it's not the same thing. There are different things, and it's not so much of a riddle after all is it.
And here's a quick summary.
If you want to increase your prices by 10 to 15 per cent, then you go from left to right, a hundred, a hundred and fifteen. If you want to test a high price, start from right and go to left and still keep the margin 15%.
Remember, you have to have the bonus for the premium option. It's not like you can just increase your prices and someone's going to choose a higher price. No, you're still looking for value. So you have to have that bonus and often the bonus should seem more valuable than the product itself.
The client should be so obsessed with whatever you're giving as a bonus that they want to buy the product anyway. This is all included in the video, and if you want to read Dartboard Pricing, then I strongly recommend you get a copy of it. It's not very expensive, but with the first price change that you make, it'll pay for itself.
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