Should You Adjust Pricing During Uncertain Times?
Kajabi Heroes share their pricing strategies
It may feel like a weird time to launch a new offer or even start a new business online. You know you have something valuable to share… but will customers be able to afford it right now? Should you lower your prices? How do business owners find the right balance between revenue and making your offers accessible at a time like this?
You’re not alone if you’re struggling with these questions. The good news is—after speaking to entrepreneurs, experts, and influencers actually running online businesses—right now may be the perfect time to build together.
We spoke with several Kajabi Heroes to learn how their businesses are adapting pricing. Here’s what we learned.
Start with your principles
During the 2008 financial crisis, Todd Mac was a stockbroker. Though he was making good money, he wasn’t happy.
So when he got laid off, he asked, “What do I want to be doing with the next 5-10 years of my life?”
That helped him develop the principles that continue to guide his business TMAC Fitness today. His advice for aspiring entrepreneurs trying to navigate pricing during tough times? Know what you stand for.
“These moments allow us the opportunity to reflect and pause,” Todd said. “If you take a moment to reflect, it’s a good opportunity to realign your life.”
This set up TMAC Fitness for success during the time of social distancing.
“We’ve been putting out the same message every day,” Todd said. “And now our users are sharing it with their friends and family.” Without any ads, Todd’s business grew in the last few weeks simply through the people in his community sharing it.
“What are we here to do? Get people healthy,” Christopher said. “So we created something open and free. It’s allowing so many people to have access to our product.”
Based on his experience during the last recession, Christopher made it a priority to have digital-first businesses.
“We intentionally kept things very small and personality-driven,” he said. “That way we could control it and weather these storms. We can keep it all digital.”
Focus on the long term
Along with identifying guiding principles, it’s important to focus on how you can build your business long-term. Keep in mind that the global health crisis—and the accompanying economic struggles—are temporary. What can you do now to help your business grow over the next 5 years?
For example, Christopher Sharpe noticed customers worldwide were asking for a downloadable version of their yoga course. They developed a “pay what feels good” pricing model that let more people get access to their courses over time. “Some people pay a dollar, but some people pay a thousand dollars for something you can get for free on YouTube,” he explained.
Once people see the course content, they realize how good it is and want to continue taking additional courses. “We feel this is an entry point to our brand,” he said. “It’s essentially a 30-day funnel that gets audiences hooked.”
Free content isn’t the only way to build an audience. Sometimes, strategic pricing decisions can help bring more lifetime customers into your brand’s orbit.
Shannon Tripp, a former nurse who teaches moms how to respond to medical emergencies, has also seen growth by being willing to focus on the long term. Her husband and business partner were discussing how to adjust pricing in the wake of social distancing. “We weren’t planning on changing the price,” she explained, “but we looked at each other and thought, ‘Moms need this. More people need this.’ So we adjusted the price.”
They ended up pricing their course a bit lower—not as low as when they launched, but about 30% off. This led to significantly increased sales. “If you know you’re in this for the long run,” Shannon said, “it’s really easy to add value.”
Get creative and add value
Discount pricing isn’t the only way to increase sales and revenue during unprecedented times. Instead of thinking, “How can I make more sales by cutting prices?” think, “Can I make my product more valuable?”
Becky Hamilton, business manager for Bethany Hamilton, decided to create an offer that allowed customers to give back.
Whenever users purchased an annual subscription for their membership, someone who would benefit from the membership but couldn’t necessarily afford it would be “gifted” access. It’s a buy one, give one model.
It was also a huge hit. In just the first few days, thousands of people signed up to participate.
The great thing about a giveaway like this is that even though it represents missed income, the out-of-pocket cost is very low. That makes it easy to decide that you want to share it with people.
“We can give away as many as we want,” Becky said. In fact, she added, it’s often hard not just giving it away to everyone.
Creative price experiments can also lead you to the right price range for your business. Shannon Tripp explained how she and her spouse launched their product at a significantly reduced price for longtime fans. Then they returned to full price. But after social distancing began, they lowered prices once again. “We’ve seen lots of sales coming back in,” Shannon said.
No matter what, it’s not the time to pull back. “I think we’re going to have a new wave of superstars once this is all over,” Todd Mac said. “Anytime there’s something disruptive going on, when shifts happen, that’s when the big opportunities happen.”
“In moments of crisis, leaders lead,” Todd said. “Crisis presents an opportunity. But we’re too busy checking our phones and we rush to put out stuff that’s not in alignment with our long-term goals. But if your long-term goals are in alignment, then you’re good. Just weather the storm.”
For Shannon Tripp, envisioning her business’s future helps guide her pricing strategies.
“Focus on making it really your purpose, instead of making money, and the money will come,” Shannon said. “I always think in my head, what will I regret more? Will I regret making something and failing? Or will I regret not making it and someone needing it?”
Have a business idea you want to bring to life?
Start a free trial of Kajabi today.Get Started