When I first started my event planning business I didn’t want to scare away customers so I undercharged my services – significantly. There were events on which I made zero profit… Zero, Zilch, Zip.
I wasn’t an exception to the rule, in fact, many new event planners are guilty of this conservative pricing model in their early days. But if you’re booking clients and not making a healthy profit here is one simple but effective strategy that can help you with doubling your profits.
Let’s say you’re charging $200 per event and currently booking 10 clients every month. This means your monthly revenue is $2000 ($200 x 10).
Now let’s say you doubled your prices to $400 per event and when you do you lost half your customers.
At $400 per event and booking 5 clients every month, your new monthly revenue is $2000 ($400 x 5).
This means that you doubled your prices, lost half your customers and still made the same amount of profit – while working fewer hours!
Let’s say that when you doubled your prices you didn’t lose half your customers but rather you lost only 3.
This means that at $400 per event you are booking 7 clients every month for a monthly revenue of $2800 ($400 x 7).
This means that even if you lose any number higher than half your clients, you will still make more money than you did previously at your lower rate, with a higher chance of doubling your profits.
Now I don’t know about you but a scenario in which I work less and make a higher profit sounds quite ideal.