Page 162 - The $100 Startup_ Reinvent the Way You Make a Living, Do What You Love

Note that if the conversion rate dropped further, say, to 1 percent instead of

1.5 percent, the price change would not be a good idea. But in some cases, the
news is actually better than it is in this example: When you raise the price, you
don’t always see a drop in the conversion rate. If you successfully raise prices
without lowering the conversion rate, it’s time to order the champagne.

The point is that experimenting with price is one of the easiest ways to create
higher profits (and sustainability) in a business. If you’re not sure what price to
use for something, try a higher one without changing anything else and see what
happens. You might find yourself with an extra $24 per sale—maybe more.

You Have More Than You Think

After I met Naomi Dunford in England, I saw her again a year later in Austin,
Texas, where we were both in town for the South by Southwest (SXSW)
Interactive Festival. Earlier that day, she had run into a money problem. The
problem wasn’t a lack of money; her business was doing extremely well, on the
way to breaking the $1 million a year barrier. The problem was access to money.
Because Naomi is Canadian but has lived in the United States, the United
Kingdom, and elsewhere, she often has issues with her PayPal account being
closed as she travels the world, leaving her with plenty of funds in the account
but no way to access them. In this case, she needed $900 to register for a
conference that had just been announced … and would sell out quickly. What to
do?

Naomi realized that although she didn’t have $900 with her, she probably
knew someone in Austin willing to loan her the use of a credit card so she could