Keith Goodrum

Ryan Healy answered a pricing question on his blog today. A regular reader asked his experience with pricing.

Here is his response…

Should Prices End in 7?

“…There are all kinds of opinions.

I’m not big on ending in the number 7.

Just test it and see what works best…”

Wait a minute… Are you saying that we should test pricing points?!?

That’s CRAZY talk!!!

Aren’t we suppose to follow the herd, and not question the mighty “7″?

All kidding aside… I’ve tested pricing with my off line business. There were some interesting results.

But first a little background…

My offline business was residential window cleaning. So, I would go in and give an estimate. They would book on the spot, call me for an appointment or not have us clean their windows.

When I first started out only 1 in 3 would book a window cleaning appointment. That was a lot of estimates to give out, and a lot of time spent running around town.

Finally A Customer Came to The Rescue…

This went on for 2 months, and it was tough earning a living. I couldn’t figure it out. I was establishing good rapport with the customers. I looked professional with a nice clean truck, clean clothes with an embroidered polo shirt… I looked the part.

Finally a customer took me aside and told me what the problem was. My prices were too low! She said that my pricing lack credibility. It seemed to good to be true. I was shocked to hear this… I thought I was giving a good value for my services.

I went out on the next estimate and raised my pricing by 25%. Over the next few months my closing ratio jumped to 84%. My calender stayed booked out for 6 weeks… it was great.

Another Valuable Piece of Advice

This time Dan Kennedy said in his newsletter if you are up to your eyeballs with customers then it’s time to raise your prices. I was afraid to follow this advice. I thought all my customers would jump ship.

I finally decided to give it a try…

It took almost a year of thinking about this to give it a try. I timidity inched my prices up by 10%. No one said a word?!? So, I kicked it up another 10%… no one noticed.

Now I got bold.

I decided to see how far I could go with this… I kept raising my prices 20% at a time. Now, my closing ratio started falling. But I kept raising my prices.

I kept going until my closing ratio fell to 47%. And I was thrilled. Why? Because I was making more money while cutting back on my hours. It was nice not working sunup to sundown.

Well, Ryan that’s one of my experiences with price testing. Maybe I write about another one next week.