I know, it’s hard for you to believe that people WANT to pay more money than you’re charging right now.
I mean, it’s tough enough to get your sales people to sell at your current prices.
But the fact is that people are paying exorbitant amounts of money for all kinds of luxury items in every category you can imagine. It’s been going on for about three decades now.
I’m not talking about super-rich people who can afford whatever they want. Duh.
I’m talking about regular people who live in nice, normal houses in nice, normal neighborhoods that make nice, normal incomes.
Ever hear of Callaway Golf? Or Victoria’s Secret? Or Cheesecake Factory?
These brands have already cashed in on regular people’s desire to pay extra for premium products—and they’ve done it to the tune of BILLIONS of dollars.
It’s simple economics:
In the last 40 years, the average middle-class family enjoyed a doubling of real per-capita income… while the cost of living remained basically flat, in real terms.
Therefore, the amount of money available for “new luxury” has exploded.
That doesn’t mean that everybody is now eating caviar at every meal and driving Bentley’s to drop their kids off at soccer practice.
It means that people have the money to pamper themselves with luxuries on certain purchases that are important to them.
Take Victoria’s Secret. They took ladies underwear from a utility item women bought off the rack at Montgomery Wards to something extraordinary that they really wanted. The average price of a Victoria’s Secret bra is TRIPLE to QUADRUPLE what you can pay for a “plain” one at Wal-Mart or Dillard’s. But women would rather “treat” themselves.
And it’s not just the ladies; there’s a reason you dudes buy Big Bertha drivers and Callaway irons. Who cares if it’s $3,000 a set—it’s worth it!
And guess what?
These same people are DYING to fork over huge sums of cash for the best roof. And the best windows and siding. And the best kitchen and bathroom. And the best air conditioning repair.
Look, not everyone eats at the Cheesecake factory. I get it.
And not everyone is going to pay you $1,400 for a window when Window World is advertising them for $189.
But believe me, friend, when I say there are more than enough who will.
Enough to get you to $10MM in sales and enjoy all the benefits we talked about.
There are plenty of people who want the ASSURANCE that you will do it PERFECT (and bend over backward to make it right if you mess up) instead of paying some dude from Craigslist to do it who might murder their children.
All of this has been documented in an excellent book called Trading Up: Why Consumers Want New Luxury Goods—And How Companies Create Them.
It came out about 10 years ago—but don’t worry, it’s not outdated. Not even a little.
To spare you from having to buy and read an entire book, I found this clip on Youtube of the author giving a speech in 2006—again, a bit dated, but the point is still as valid today as ever.
Watch starting at the 1:15 mark:
To get to $10MM in sales, you’re going to have to become part of the new luxury.
Sure, you can just sell more of the low-margin, copycat windows and reach that figure. Or try to land remodeling jobs by being “price competitive.”
But you won’t have the margins to sustain a great company and put a million dollars a year in your personal coffers.
Join me in Dallas on April 26 & 27 as I teach my new 2-day seminar, “Make The Jump To $10MM”. I’ll show you how to raise your prices, create huge value… and most importantly, how to do the marketing to make people want to buy from you.
Don’t stay stuck—only 1% of contractors ever make it to $10MM. If you’re already at $2 or $3MM, you just might have the right stuff to get there.
I look forward to you joining my class!
Click here to read more posts in my “Make The Jump” series:
© 2017, Rich Harshaw. All rights reserved.
