The Hard Truth About Raising Your Prices

0:08

[Welcome] to Chase the Vision with Isaac Mashman. Now, I do have to apologize if I sound particularly stuffy in this episode, or maybe not 100%. It's not that I don't feel good. It's very simply I've been battling some sinuses over the past week, and I'm on the tail end of things. But I was like, hey, I have to put out an episode for this week, and so, guys, today I want to talk to you guys about the hard truth of raising your rates, of raising your prices. But before I jump into today's topic, I would like to remind you of the fee. I'm not here running advertisements, and any advertisement that I ever run is going to be about my own products or my own services.

I just want to make that clear. So in order to help the show grow, I always ask that you share this podcast with at least one other person per episode that you listen to.

1:29

If you listen to this episode and you get value from it, share it with your business partner. Share it with a friend, share it with a family member. Share it with somebody in your life. If you go back and listen to episode 94 and episode 93, share the podcast with two more people. It's super simple. It takes you an extra 30 seconds, but it means the world to me. I can tell that you guys are doing it because the podcast has been charting, and not only in Uganda but Gambia, and I checked today. We are charting in the education chart in the top 200 on Apple Podcasts in Lebanon and the top 50 in self improvement in Lebanon as well. Hey, isn't that crazy? So as of right now, I checked and I saw that we were charting in five different countries.

2:14

Next time we have this conversation, who knows, by Friday it could be six or seven or 50. That is ultimately the goal of building something great: for it to expand, for it to hit new markets, and for you to ultimately provide value to that many more people. That's the point of building out your personal brand. So super grateful for all of you. Now, I want to talk about raising your prices. This is something that many people fail to do in business whenever they are starting a company or starting a business. They're like, how should I price my business? How should I price my product? Now, I don't want to spend much time talking about product-based businesses today, including SaaS businesses, very simply because it's an entirely different world. I'm here to talk about service-based businesses.

3:03

However, many of the same philosophies do apply, but when you have products, you have to look inherently to the value and the competitor space a little bit more than with a service-based business. The cold, hard truth, very simply, very frank, is people hold themselves back because of their own limiting beliefs, because of their own confidence issues. They are not confident enough in their own businesses. They're not confident in their own ability to provide a service. They think that the $100 that they're charging per hour right now is the rate that they're going to be working with for the rest of their life. The one thing that they do not realize and that they fail to realize is that through experience and through doing that service more and more and gaining more experience, through study and reading and listening to people who have the results that they're looking for, they are actually going to be providing two, three, four, five times the amount of value as they previously were.

4:07

It's a direct correlation. It's a vertical correlation with the amount of experience and time doing something. It's natural for your ability to expand and to improve, but they don't feel like they're worth enough. They don't feel like they could charge it, and it's not because they can't. It's because it's out of their comfort zone, whatever they're doing.

5:09

This happened in a very short period of time. I would say in less than five years, because I made the decision to continuously not only step outside of my comfort zone, but to also look for ways to increase value. Yes, I could get better with time, but this wasn't like I was cutting hair and I'm a barber, to where the more time I spend doing it, the easier it's going to get and I'm going to naturally get better. But it's also pertaining to knowledge and active application of what I am teaching and what I'm consulting on and what I am building. Because my business centers around personal branding and how to effectively build out your brand. Then an offshoot of that is how to build out your company's brand or how to publish a book.

5:54

[Say] I'm working with an author or somebody who is an aspiring author. But the thing is, if I never went out of my way to learn about how to publish my own book, [I couldn't help them]. Then I published my own work, Personal Branding: A Manifesto on Fame and Influence, available on my website, by the way. Go to isaacmashman.com/book. You see, if I'm going to run an advertisement, that's going to be the extent of my ad. But regardless, if I didn't publish that book, how could I work with somebody and help them publish their own? This isn't a matter of, oh, I'm making my money helping you do the same things I did.

But it's more so the tactical area and getting inside the head of somebody else and seeing their vision for what it is and being able to help them do something that could have taken them 10 times the amount of time if they were to have done it themselves.

6:42

But every single time I did this price raise, I always knew that, number one, I would be uncomfortable and it would be very annoying. It would make me feel weird whenever I asked for that rate. But then on the other side, I also knew that it was necessary if I wanted to scale. Whenever you're starting out, you're not just going to hop onto the scene and be like, $10,000 a call, $10,000 for a speaking engagement. You're going to start and then scale, but most people fail to do that because they don't think they're worth enough. They don't think that they can. They don't think that they could charge that amount.

They might be too focused on the competitors in the marketplace as well. Oh, well, this person is charging this. This person is charging that.

7:25

Do you really think celebrity barbers care about what everybody else is charging? No, they're charging the rate that they want to charge because they know the value that they can deliver. They know that their reputation speaks volumes. Their previous clientele speaks volumes. This is the point of collecting testimonials, not [just] for external people and external use. Whenever somebody is going to search up a company, they're going to base their buying decision, who they're working with, who they're buying from, on reviews and testimonials. That's great. I think that is a cherry on the top of that. That's all the more reason for you to collect your reviews and testimonials.

But I also use testimonials for myself, not for you, the prospect, but for me, the business owner, because whenever I have those moments of doubt or whenever the imposter syndrome creeps in or whenever I'm like, wow, am I worth this rate?

8:21

I can remind myself of the previous people I've worked with and have seen get results, who I've helped to get results in their own lives and their own businesses. They are reminders, right? [I think two] dozen video testimonials of people talking about Mashman Ventures and talking about their experience, or, you know, four or five dozen written testimonials. I'm able to look at that and say, this does not happen by, you know, just, look, it doesn't happen by chance. I had to build this. That means I started somewhere, and then I scaled.

9:16

I made it because I knew that I could. I knew that I could. I wasn't going to let a confidence issue affect me and hold me down. This is going to apply to you guys as well. If you've done something for so long, if you've done it and you have the experience, you have the knowledge, you have the testimonials, you have the videos to back up what you're doing, then why wouldn't you raise your rate? This isn't greed. This is very simply understanding that you're going to a different class of clientele, going and working with different people. The people who really want to work with you and value their own results are going to be willing to pay your rate because you're worth it.

10:02

Cheap doesn't always mean it's best. Let's be real. I come from a background where we're going to get the Great Value can of beans rather than the Bush's can of beans because it's 20 cents cheaper or 30 cents cheaper. But guess what? The Bush's beans are going to be better. All things that are cheaper are going to be worse. But when it comes to services and what you're providing, you shouldn't ever sell your product and sell your services based on being the cheapest. Louis Vuitton, Bernard Arnault, the current [head], I guess you could call him. He's not so much the owner, but he's like the chairman of Louis Vuitton.

He's gained billions of dollars in the past couple of years in the middle of a freaking pandemic because of the value that Louis Vuitton holds.

10:53

People know that it is a high quality product. It's a high quality product. Teslas are not the cheapest in the market. Even the Model 3s are more expensive than most Hondas and [Toyotas]. Yet they are worth billions of dollars. Elon Musk was the richest person in the world. I don't know if he still is. But they're not making their model based around pricing. Now, there are circumstances where pricing does come into play, and you might lose a client or two by being too expensive. But that shouldn't serve as something to say, hey, I need to lower my rate because one or two people told me it was out of their price range.

No, it's out of their price range, but it could also be in the price range of somebody else, somebody else who sees the value that you can deliver upon.

11:45

The opinions of other people are what's going to get in your way right about now, because you're going to be like, what if this person says no? So what? For every no, there are going to be 10 or even 100 people who say yes. It's not going to be easy. As you increase your rates, you now have a higher expectation placed on the results that you are delivering. Don't think that it's just out of a place of greed, saying, let me charge more money and make more money so I can buy more nice things.

12:23

This is why whenever I'm working with somebody, I set the expectation extremely high, but I set the expectation in my own mind even higher than that. I know that I need to do everything in my power to deliver it and to provide the best experience possible. From the moment they get on a call to the moment I walk away with them and do a follow up call or check in or watch their results, I know I need to live up to the price rate that I'm charging.

12:52

I have gone out of my way over the past year to look for value adds, ways that I could go ahead and increase my value proposition to a client. This is what you should be doing as well. Whenever you're building out a service based business, what can you do to add on resources? What resources can you create or provide? What incentives can you throw in there that, once you create it, it's not going to take any more time out of your life, but it's something that could completely change the lives of another person who now has access to that resource. They're able to listen to that audio or they're able to read that PDF or read that book.

That was one of the biggest reasons why I wanted to publish Personal Branding: A Manifesto on Fame and Influence, to be a value add to the people who are already working with the firm and working with me.

13:42

Yes, reputation booster, yes, a way to make residual income. Yes, it's something I've always wanted to do, but I also knew that it was going to be a value add that could potentially have infinite returns. There is a parallel correlation with the increase of price, with the increase of value. Then there comes a point where the amount of money that you're charging might not be just with the value, but based off of association with you. This is when your reputation comes into play. This is something that's extremely advanced that I would only share with a client after, like, three or four or five calls. But there's going to be a point where if you go and take this to a high enough degree, you're going to be able to charge higher rates just because of who you are, just because of the speculation around your name and your reputation, what you've done in the past, like Dwayne "The Rock" Johnson or Kim Kardashian. They can charge a million dollars for an Instagram post because there's going to be not necessarily the attention but the association.

14:43

The association is also important, but that's going to be a subject for another time. But the hard truth about raising your pricing and your rates in business boils down to limiting beliefs and a confidence issue. What ways can you boost your confidence in your business and in yourself? Self improvement. Listening to podcasts where now I'm here validating your thought that, hey, I need to raise my prices. Hey, I need to get out of my freaking comfort zone. It's super easy to be comfortable with where you're at in your business and charging the current rates. But if you're doing that, how would you expect to scale?

Yeah, sure, you could go ahead and work with more people and scale that way, or you could increase your rates, work with more people, provide more value, and you can scale that way.

15:29

There are so many different ways to scale. I'm not saying that raising your rates is the best way for you to do that. But I'm saying that this is a way for you to make sure that whenever you're doing a call with somebody, you feel like you are being compensated the proper amount. Because I've also been on the other side of things where I feel like I'm not being compensated enough. That affects how you feel. That affected how I felt, the vibration that I was in. It made it to where it was almost difficult to want to be on a call or talking to somebody or doing services. Done for you services whenever I was back at that point, because I knew deep in my heart.

16:11

Even on the surface, honestly, if anybody would have asked me, [I would have said] that I wasn't charging enough, that what I was doing, in the [value I was] providing, is worth 10x what I was paid. But I also knew that I made the commitment to that person. It was my fault that I didn't ask more. It was my fault that I didn't charge what I knew I should have been charging because I was afraid. It was fear. Fear creeps in during the sales process until you do it enough times. Even with [repetition, with time], you are always going to have that thing in your guts where it's like, man, this is crazy.

17:00

But that's the point of being in business and being able to provide value to where you're not measuring yourself based off of that same system that everybody else is living in. I'm not saying to get so gassed up in your head to where your head gets large and you're like, wow, I'm better than [everybody] and I'm not like the rest. Look, I've seen it. I've heard it. [Some are] still cooking at McDonald's. We downplay the employee lifestyle, yet in actuality, many employees are more successful than entrepreneurs. If you're starting out, you might be a business owner, but you're more likely unemployed with a title. It's up to you to make sure that you step out of that and step into this person that you're becoming, into this title that you're associating yourself with.

17:48

It's up to you to get to that point. But if you don't choose to do something different and to ask for that increase, you're going to be letting fear dictate your life and the direction that you're going, and you're giving away your power, you're giving away your control. That's not a way to live life and that's especially not a way to build your business. You could listen to these things, but if you don't apply the words that I'm telling you and say [it] on the next call that you do, this is as simple as saying [it] on the next call. Let's say you have a consultation based business or you're a coach.

If you're a coach especially, you need to do everything in your power to stand out because it's super easy to put the mantra and the moniker of I'm a coach.

18:36

I'm a life coach. Okay. Are you? How can you give advice that is solid? What makes you qualified? But let's run with this and say that you are a coach or a consultant. Are you charging $100 right now per call? Increasing your rates at this current level is as easy as increasing it to $110 next call or $125. If you really want to, in your [confidence], go from charging $100 for a consultation to $250. Let's take a second and talk about somebody who could be a barber. Maybe you're charging $15 a haircut. How about you charge $18 instead of $15 next time somebody wants a haircut from you? Then as you go, you look for ways that you can become a better barber and maybe you use a straight razor.

19:28

Now, make sure you're good at this and you're a professional and that you know the safety side of things. But I know that I will be more than willing to pay $30 or $40 to somebody if they use a safety razor on me, or not a safety razor, but one of the straight edge razors as a man, because I'm like, man, this makes me feel good. So much so that I got one of the straight razors and I only use a straight razor whenever I'm shaving my face at home. But if I go into a barber shop and they have the gel, the aftershave, the shaving cream, the straight razor, the hot towels that they put around your neck and on your face, or they might even have a massage chair, man, I walk out feeling like a million bucks.

I am going to tip a good amount of money because, hey, you provided me the experience and this is why you are worth more.

20:16

Now, your worth doesn't necessarily have anything to do with your personal self-worth as an individual, so don't feel all offended and say, oh, because I'm not charging enough, I'm not worth as much. Like, all right, get this hoorah crap stuff out of my podcast. But what I am here to say is that you go from $15 to just making the change to 18 off the whim. So you just, you raise your rates without raising your value, so to speak. But then now you incorporate these other things into your hair cutting experience, or if you're, you know, taking care of women's hair, okay? Well, what products are you using?

Are you using better products than the next person to where now you can charge your higher rate and make a profit off of the increase in value and quality of the products you're using in the hair? Then you get more experienced, you have a million different testimonials and pictures of previous clients that you can show and display. But just imagine going back to that barber example, you go from $15 to 18 and then you jump up to 30 because you incorporated these other things. You're making twice as much as you were making before just by having a couple value adds. Man, that's wild. Then I don't even need to have a conversation surrounding the gas prices and the inflation rates.

21:34

Right? I've seen so many people complain about gas in the past week and a half. Man, I want to scream because we're all thinking about the problem and we're saying, oh, the price is going up. We're not thinking about any solutions and we're not thinking about expansion. We're thinking about contraction. This is typical in any recession cycle. We're not looking to get out of it. We're looking to survive it. Is that setting you up for any success? It isn't. So could you imagine for a second, instead of thinking, oh, the prices of gas are going up, let me be in this mode of contraction, why don't you say, hey, this is the reason for me to go harder with my business, to increase my rates, to match this level of inflation, and to thrive during these difficult times, rather than just survive.

22:23

You have gas that's going up. Okay, cool. Increase your rates. Okay. Prices of groceries are going up. All right, increase your rates.

22:58

They have targets they want to grow. These corporations, Apple didn't hit the trillion dollar mark by circumstance. They made the decision to get there. They provided the high quality service. They charge $1,500 for an iPhone, but guess what?

23:12

There's a standard that's associated with it, a level of class, a level of prestige. Your services don't have to be for everybody. That's another thing that you have to realize just because you previously only worked with one level of clientele doesn't mean you can only stay there. Now I'm not trying to get into this whole elitist kind of conversation, but look, you don't have to be the normal barber who only charges 10 or 15 bucks. You don't have to be like that. You don't have to be the person who works at a normal restaurant and doesn't even get tipped. You could be working at Ruth's Chris, working at a higher quality restaurant. Even if you're not an entrepreneur or in business, this expands to people who are employees of companies. The choice is yours.

24:02

You can make the decision to go somewhere else to increase your value within your own position. If there is no room to increase your value, then go somewhere else where there is room for growth, where you can get compensated what you need. Don't let your ego get in the way of saying, oh, I know I'm worth more. But if you genuinely know you are, get out of your own damn way. Go somewhere else, have another job lined up, have another gig lined up, and then quit. Put in your two weeks notice and go somewhere else. If you can't find a position, find a side hustle, find something else that you can use to supplement your income.

If you are into business though, you have full control over everything. Now as an employee, yeah, you have full control of your life, but you might not have full control of the prices and the things and the value of the menu. But you do have control over your own situation that extends outside of the workplace.

25:00

Even internally in the workplace, you can be that person who provides exceptional service and exceptional results and gets noticed. Or like I said a minute ago, go somewhere else where you can be noticed by the right people. Look, [premier brands like] Louis Vuitton, worth billions and billions and billions of dollars, they're not for everybody. They're coveted by everybody, but they're not meant for everybody. That's strategic. Now, would you say that that is unethical or immoral? I don't think that the value and the price has any conscience. I don't. There are certain markets and there are markets that need to be filled.

26:36

This is also why self development is so extremely important because you can have alternative ways of thinking. I can only imagine if I never got involved with network marketing those years ago and went through and witnessed the things that I witnessed in the company and just this alternative way of living.

26:52

Then if I never went and did these dream building experiences and sat in the Rolls-Royce in Beverly Hills, and I was just sitting in the car and I'm like, man, this is nice. This is quality. If I never went and traveled and went overseas and went internationally and saw the Eiffel Tower, and if I never went to Miami and saw that, hey, I don't have to be struggling. I was able to increase my vision and increase my perspective on life. That's what you need to do when it comes to raising your rates. You don't have to be for everybody. Realize that as you scale, you're going to be losing out on other business, but you're opening up your business funnel and opening up your life and what you're doing to a whole other group of opportunity.

27:39

Yeah, and then, hey, if you want to work with everybody in some way, shape, or form, this is when you go and increase and create products or write a book. I knew that, hey, there was a large portion of the people who I was connected with on social media and who had been following me. I'm like, I get that not all of you have the aspiration of building your personal brand to a high degree. I understand not all of you are going to want to spend X, Y, and Z investing into your personal brand and investing into a PR firm. I get it. I understand it.

I understand that, hey, not all of you are even wanting to build a business or build your personal brand at all, but you would love an opportunity to support somebody, [and that] is either free, for my podcast or for your own podcast. But then I wrote my book, realizing that anybody could pay $12.99 for a book.

28:28

Anybody could pay $25 or $30 for a signed copy. Then in the future, I'll be introducing more things into my own business model to where more and more people have the opportunity of getting value and working with me, in a sense, without having to pay that higher degree. But the thing is, I chose to get really good in one specific area of my business before I chose to expand. You're not going to help everybody immediately. I'm not even helping as many people as I want to or providing services and streams of revenue to as many markets as I want to because it's a process to get there.

29:20

I have to ask you in your business, what can you do right now to increase your value? Is your rate, where it's at right now, at a place where you can increase the rate without having to do anything different? Going from $100 to 110, going from 1,000 to 1,100. Think about apartments. Whenever somebody buys an apartment or buys a house or buys a property that is producing revenue, they ask themselves, prior to buying or purchasing it, can I increase my monthly revenue based off of the lease or the contract or whatnot without having to make any changes, without having to make any renovations? Can I take the rent from 800 to 850? Can I take it from 850 to 1000? Can I take it from 1000 to 1200? How much leeway do I have?

30:08

Then from there, it's not that you're trying to kick people out and you're trying to be greedy. Simply, you're growing and scaling a business and the times are changing. You need to change with the times and you need to set your vision as high or as low as you want to take it. If you don't want to raise your rates and you want to work in one specific field or at one specific market, more power to you. But if you don't want to be in this current situation and you want to get somewhere else, the way that you get there is by doing and applying the things I'm telling you right now in this episode.

Don't let the limiting belief hold you back from doing and taking that next quantum leap in your business. That next quantum leap in your life that you've been wanting to make so badly, but you just haven't had the courage or the confidence.

31:01

This is the kick in your butt. The kick in the ass to get you over the edge and to actually do this thing that you really want to do. You'll feel better about it too. It's funny that when you increase your rates and whatnot, and you get paid more, you're going to be like, man, now I'm being compensated what I know I deserve. I can only imagine doing something for 20 years and getting paid the same rates. I've talked about this in the past. It's like there's a different understanding of money. Somebody can only provide so much quality of service when it comes to cutting grass. But even then, there is a certain point where you can scale and say, hey, it might not be $20 to cut your lawn.

32:24

It's all about perspective and it's relative to the grandeur of where you want to go and the goals that you have for yourself. Relative to your goals and to your vision. Go out and do the damn thing. That's all I've got to say. I know that this has been quite a long episode, but it's something I've been thinking about for so long. It hit me today. I was like, I had to write it down in the notes of my phone, and I'll read off exactly what I wrote down. I'm like, this is important. The thing that holds most business people back is their refusal to get out of their comfort zones and increase their rates.

Don't refuse, accept it, accept this calling of being in business and do the things that you deserve. Do this for yourself and do this for your future self as well. If I never increased my rates, I wouldn't be where I'm at today and I would be kicking myself. I'd be like, man, Isaac, I was stupid.

33:29

I can tell [you] that it is worth the discomfort to be more comfortable charging a higher rate. That discomfort is worth it. You just need to find out for yourself.