Is your pricing strategy getting you out of business?

Hi!

What to charge for your services and products is one of the biggest obstacles business owners face.

And you continuously under-price your products and services you try and “beat” your competitor’s price.

The fear of losing customers and being judged as too expensive are things that keep businesses from charging what they should for their products and services.

Charging too little can, and does cause businesses to falter.

Often I hear business owners say things like, “I can’t charge more than I already am” or “I can’t charge so much”.

The truth is, when you look around, chances are you will find someone charging more than you are.

And… when you charge too little or surrender to your “fear of price” by reducing prices.

You are not only undervaluing your product or service, but you are jeopardising your business in the long-term.

When it comes to setting your price, there are some simple do’s and don’ts you should always follow.

Don’t lower your price to win a proposal.

One highly successful, more than competitive business owner I know of had the chance for one of the biggest deals of his life.

He had submitted a quote to a major company within his industry.

He felt sure he would win the proposal as he had the experience required and was making a name for himself in his industry.

When he didn’t get the proposal, he asked his contact why?

Answer: “Your rate was much lower that we thought maybe you weren’t as good as we thought you were”.

Don’t give into fear.

One thriving 100-crore-a-year company that had huge issues of a bluffing competitor who threatened to destroy the business with lower prices and massive advertising.

It turned out that once the competitor became a partner, he destroyed the business from within in order to create a vacuum in the market so he wouldn’t have to compete head on.

The company owner didn’t go out of business because of the competitor, but instead because of his fear of price competition.

Do test out different prices and price strategies.

Instead of picking a random price, test out different prices and offers. For example, try different payment terms such as a one-payment term, three-payment term and six-payment term.

So as you can see, it’s not always the lowest price that brings in the most sales, but the most appealing offer.

Do consult qualified advice on price if you are having trouble raising your prices.

Let me emphasise the word “qualified”. This isn’t your spouse or your next door neighbour.

This most likely isn’t people in your niche or marketing other businesses in your area of town. It definitely isn’t your friends and family.

If your fear of raising your price is getting in your way, seek professional guidance.

Consult a marketing consultant or business advisor who specialises in price strategy.

No matter what you do, adding price strategy to your business plan is one of the most important tools you can use to not only increase your profit but help you stay in business for the long haul.

Don’t be afraid to try pricing strategies out.

Raising your prices even 10% will have a huge impact on your business and your life. And you won’t have to work any harder to make more money.

Have Gee mein Gee!

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