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Raising Prices 10% Doubled Profit—Why 20% Can Cause a Heart Attack
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0:00A lot of you guys are pricing too low. We looked at buying a construction firm last quarter. They were a little bit small and so I said, "Hey, do this for me. Go ahead and just raise your prices by 10%." Cuz it was thin margins in the business. When he raised his prices by 10%, he doubled the profit of his business. And his conversion rate stayed the same. And so he came back, he's like, "What should I do now?" I said, "Raise it by 20." And he had a heart attack. "Raise it by 20 and then give a guarantee." Cuz this was kitchen remodels. "Give a guarantee that you'll be on time and on budget or you'll give 20% of the bid back to them. Worst case, you're in the exact same position you are now. Best case, you close nine out of 10." That's what he's doing now. It does not matter whether you think something's expensive or not. And it doesn't matter if you think it's cheap.
0:35It just matters what people who click and buy or what you're selling someone over the phone. Right? That's all that matters.