Sep

23

Raise your prices…..NOW!

Posted In: Sales

Most business owners have a heck of a time with this one. Most people think that if your raise your prices, everyone will go somewhere else to shop. (Even people who don’t shop based on price themselves will tell you this.) Not true.

If you raise your prices by 10%, then you can afford to lose 30% of your customers and be back where you were before. (And you will NOT lose that many customers at all). But with 30% less customers, your costs will be lower, so you’re still ahead of the game. But people who value you will stay.

The people who do flee at the hint of a price rise? Who do they shop with? Everybody! Do we want them? No! These people will argue with you over price rises, they won’t buy up sells, let Wal-Mart have them. I mean, what good is it to your customers, if you can’t pay your bills and they if they turn up one morning to find a ‘for rent’ sign on your door.

It’s all part of the market you should be targeting, longer-term. Don’t believe the hype the media would have you believe, what with high gas prices, recessions, blah, blah, blah. If you looked at the paper twenty years ago it would still be the same doom and gloom. There have never been more affluent people, and younger people with serious disposable income.

Slant all your selling upwards, if you can’t just raise your prices. Start offering big packages, products and services bundled together, and put the really good stuff in the higher priced packages.

Do you know what the true value of any product is? The correct answer is: however much the customer will pay for it. Let your market decide what they’ll pay.

That’s the point of all that testing. Testing different price points, different packages. Keep raising your prices until response starts to go down. Then it’s up to you. If you’re trying to be the

cheapest out there, you’re working too hard and earning too little. Can you compete with Wal-Mart? How long could you last? There’s always someone who will come along and provide your product or service for a lower price, and you’re finished.

Sure there are good points for low pricing, but try high profits first.

Copyright 2008 Craig Howlett

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