A strategic process for business success ..
One of the secrets to business success is the right pricing. Price your products for your target market and that can enhance how much you sell, creating solid growth …
Get your pricing strategy wrong, and you may well create problems that your business may never be able to overcome. The first thing you have to understand is that the price you get to charge is a function of your ability to sell and nothing else.
For some companies, the pricing strategy for products and services is based purely on a combination of covering costs and making a profit. Smart businesses understand that you can fail to gain new customers just as easily because your price is too low.
“Did you know it’s 6 times more expensive to win a new client than to retain an existing one?”
When customers leave you, it has very little to do with how much you charge, it is much more likely to be that they perceive that “you do not care”, so never be afraid of raising your prices.
Raising your prices means you can:
improve your profit margins to help grow your business quicker
don’t need to sell more products
determine A-grade customers from D-grade ones
distinguish yourself from competition and their similar rates
make a statement about your product/service quality
focus on other areas of improvement
Customers who are disgruntled about price increases are the minority, and any losses from leaving customers can be compensated by increased profit margins from your new higher prices.
Reviewing your pricing should be done at least once a year. Remember, as costs go up your profit goes down, so if you don’t put up your prices then eventually, you’re not going to make any profit at all and, well, you know what happens to your business then?
“Don’t be greedy though. Any price increases you make need to be easily explained to your customers!”
If you’d like to talk about your profitability, or indeed review your business to see what your pricing should really be, you can call me on 01280 700405 or click here to ping me an email and let’s see how I can help you.
Until next time …
If you’re looking for a partner to help grow your business, visit www.4pbusinessdevelopment.co.uk to discover how 4P Business Development can help you!