Kristen 0:03
Okay, TPT sellers ready to seek growth in your business, you’re in the right place. Welcome to The Savvy Teacher Seller. I’m Kristen Doyle, and I’m here to give you no fluff tools and strategies that will really make an impact on your sales. Let’s get started y’all.
Kristen 0:23
Hey, y’all, and welcome to today’s episode, I’m your host, Kristen Doyle. Today we are talking about inflation and how it affects your prices. Wherever you live, I’m sure you have noticed that things cost a little more right now than they used to. In fact, it seems like every time we go to the store something that costs more than it did last week. And when it comes to online businesses, sometimes it can feel like our online business shouldn’t be affected by inflation. But it really is.
Kristen 0:54
We have this unique challenge selling digital products and services because the cost of our goods doesn’t necessarily go up. We’re not producing a product. We’re not shipping anything, where we are having to spend more money to create the thing that we sell, like a manufacturing kind of company would. But that doesn’t mean that we’re not affected by inflation. Lots of our other expenses have gone up due to inflation. And we’re all running these businesses to support our families. And the bottom line is, all of our family expenses are going up due to inflation. Gas is more expensive, groceries are more expensive, all of these things that we have to have. So it makes sense that we might need some additional income right now in order to be able to work within a healthy budget for our families and for our businesses.
Kristen 1:48
The problem we run into is that at the same time that we personally are needing to increase our income, our buyers are needing to decrease their expenses. So we have to find a way to balance our need for more income with their financial constraints that they might have in place right now. And that is where we do have a little bit of a tricky spot that we have to navigate. So today’s episode is all about assessing your pricing and adjusting it with some different pricing strategies to get through this season of inflation that we’re in.
Kristen 2:22
First of all, let’s talk about some of the places you might be seeing inflation affecting you. I hinted at it earlier. We see inflation, obviously in our personal lives with all of the things that we need to purchase to take care of our families and our homes, but we also see increased prices on some of our software subscription. Marketing costs are more right now than they had been a couple of years ago. And if you are hiring service providers, chances are their rates have gone up as well. So there are a lot of areas where we as digital creators might see increased costs of doing business, even though we are not necessarily purchasing goods or supplies to create the goods that we sell.
Kristen 3:07
So when it comes to dealing with prices and inflation, the first thing we always need to do is assess our current situation. What does our current pricing look like, and how is it performing? So wherever you are selling your services or your products, you should be able to get some data. If you have an online store or you’re selling on a marketplace, you should have data available to you about your pageviews and your conversion rates and of course, your overall earnings. So before you start adjusting pricing, take a look at that data to see what your data is telling you. If you have high conversion rates, chances are you can easily stand to increase your prices. But if you have low conversion rates, then you might want to be a little more careful about increasing prices. And you may even need to think about changing up your pricing strategy a little bit with some of the strategies I’m going to share in just a few minutes.
Kristen 4:03
Now if you are a service provider instead of a digital product seller, then you should be tracking your leads and your conversion. If you are not definitely start tracking those because you really want to see how people are responding to your pricing. When you increase your price, are you getting fewer leads now? Or do you get the leads, but once you give them a price on a discovery call, they’re not ready to sign up so your conversions are going down. You want to make sure that you are monitoring how people are responding to your pricing, whether you are a digital product seller or a service provider.
Kristen 4:43
The other thing to pay attention to is your own businesses baseline costs and where your profit margin falls. That profit margin is the amount that you are making between your total or your gross income and your business expense. The amount that is left over after paying your expenses. Personally, even though my income last year was about the same as the year prior, my profit margin was quite a bit less, because so many of my own expenses had gone up. So you definitely want to make sure you’re keeping an eye on that profit margin to make sure that your business is staying healthy.
Kristen 5:22
Now, if you are finding that you need to try adjusting some prices or playing with some different pricing strategies, I have four strategies for you to try. The first one is to bundle products. And this might seem counter intuitive, but sometimes offering those products in a bundle where people are getting a discount can actually increase your sale and get you some of those higher price point sales. Because at the same time that people are concerned about the total amount they’re spending, they’re also more interested in the value that they are getting. And those discounts look even more attractive. So bundling products can be a great way to try to increase your sales by offering that discount for purchasing the bundle.
Kristen 6:10
My second strategy is actually the exact opposite. And that is unbundling some of your products. If you tend to only offer high priced products or services or courses, you might consider breaking them apart into smaller pieces that would be more affordable. This gives people a chance to test out working with you or purchasing from you without spending a lot of money. And it’s definitely an attractive option at a point when people are really watching their budgets and how much they are spending. So look for ways to put out some smaller or less expensive products and services as an option to get people in the door and also to give them that lower price point as an entry point to working with you or using your products.
Kristen 7:00
The third strategy is specifically for service providers. If you are a service provider or a course creator, consider offering tiered pricing so that people can choose what level works for them. Here pricing is simply offering multiple pricing tiers. So different price points that offer different amounts of service, amounts of support, links have access to something, anything like that, so that you can cater to different budget levels. This is another opportunity for people to get more support at a higher price if they want it. But also have the option to get in at a lower price, if that’s where their budget is at the time.
Kristen 7:48
And another thing you might consider if you have higher priced products, or courses or if you are a service provider is to offer payment plans to make your products more accessible to a wider variety of people. And if you’re already offering maybe one payment plan option, you might consider offering additional payment plan options that include more payments at a lower monthly or quarterly cost so that people are able to spread their payment over time and still be able to afford the course or the service or your higher priced product that they wanted to purchase.
Kristen 8:23
The key here really is to have your offers, whether they’re products, services, courses, memberships, have your offers and a wide variety of price points, so that they are accessible for lots of different buyers, no matter where their budget falls. If you are increasing prices to help compensate for inflation, I want to give you a few tips for that.
Kristen 8:46
First, I would suggest starting with small price increases and increase those prices gradually. You want to make sure that you are increasing a little and then checking your data before you make another change. Don’t change your prices immediately before a sale if you’re in a marketplace of any kind. Whether that’s TPT or Etsy or somewhere else. Don’t change your prices immediately before a sale because buyers will notice that and it feels like an icky sales tactic, like you’re trying to make the sale look better than it is by increasing the price right before it. So if there’s a sale coming up, maybe pump the brakes on increasing prices or try to get those prices increased several weeks beforehand so that it doesn’t look like you’re trying to game the system during a sale.
Kristen 9:33
In terms of how much you should increase prices at a time. I typically increase prices on all of my products no matter whether they are smaller products or higher ticket things. I tend to increase by somewhere between five and 10% at a time, making those smaller, gradual increases so that it’s not a shock for buyers and so that I can test it out and see how buyers are responding to the price change before I make a drastic change.
Kristen 10:02
If you’re a service provider, or you’re increasing your price on a membership or a course, then communicating those price changes to your clients or customers is so important. Make sure when you do this, that you are acknowledging the financial strain that they might be going through and reminding them that you are a person who goes through the same financial strains that they do. While you are doing that, make sure you’re reminding them of the value and the benefits that they’re getting from whatever you offer that they will continue to get. And anything may be new that you’re adding in at the newer price point.
Kristen 10:37
And then two things that I think are just so important and always really good for our existing customers, is to consider offering them a loyalty discount or grandfathering them in, so that if they are already a member, they get to keep their same price. This lets them know that your price is going up, but you value them as a loyal client or customer. And so their price, maybe this is a membership or service, their price is going to stay the same. But if they cancel and try to come back, they will be at the new price.
Kristen 11:10
The other thing that I like to do is let existing customers or your email list know when your pricing is going to go up, so that they get that last chance at the old pricing. This is a great goodwill gesture. It also just feels like the right thing to do when you have existing customers who might already be familiar with your pricing and your products.
Kristen 11:33
Before we close out this episode, I want to remind you that Inflation affects all of us. It affects us as online creators just as much as it affects our buyers. And so it is okay for you, as an online entrepreneur, to raise your prices to compensate for inflation if that is what you need to do. If you’re in that spot and you feel like you need to adjust your pricing, then I would encourage you to choose one of those four pricing strategies that I shared. And take some time this week to look at where you can put one of those in place in your business. Whether it’s bundling or unbundling some of your products, testing out tiered pricing or adding some payment plans so that people can get in on your products or services at a lower monthly cost. I would encourage you to just start with small changes, monitor your data, and then adjust them as needed. Like I always say pricing is not permanent.
Kristen 12:29
And of course, it is so important to balance your need for price increases to compensate for inflation with the needs of your customers. So just make sure you’re checking that data and that you are adjusting your prices as needed overtime.
Kristen 12:43
Thank you so much for listening to today’s episode. If you’re enjoying the show, I would love for you to take a second right now in your app to rate and review the show. It means so much to me. And it really does help other online entrepreneurs like you to be able to find the show and get help their businesses as well. Thank you so much, and I’ll talk to you soon.
Kristen 13:06
I hope you enjoyed today’s episode. If you did, please share it with another teacher seller who would also find it helpful. For more resources on growing your TPT business, head to Kristindoyle.co/TPT. Talk to you soon.
