Your Prices Might Actually Be Too Low
What are the most motivating factors for running a business, or better yet YOUR business? I’m sure one of them is profit, am I wrong?
I’ve met many owners who’s focus was not on profit were usually on a decline. Now if you are among that group, I suggest run as fast as you can. I understand that you want to please your customers and in turn you will get back what you give. In any case you need to think of ROI and profit margins in order to really reap the benefits.
As long as you give MORE value to your customer than they are paying, there should be no problem in satisfaction on their part.
Did you know that it is almost impossible to compete for price, so you might as well not do that. In order to profit with low transaction value, there has to be more volume sold. That takes time, money, and effort that doesn’t have to be worked.
If you lower your prices simply because your competitors do, there is a chance that you will go broke either before them or at the same time. Do me a favor and ask everyone you know if they buy on price. Do that for week and see what you come up with.
The fact of the matter is that you are not going to pay a heart surgeon $97 to do your procedure. That is just not very smart. What if you wanted a diamond watch which costs $27.99. Is that really diamond? If it is in fact real, there are 1/495 cts in there.
The first thing I would do is raise your prices. It can be a 10% raise to even a 40% raise. As long as you cater to the VALUE that you provide, there is no problem with increasing prices.
Another thing is, you wont have to sell more volume to get the same amount revenue. Your profit margins will increase and you and your team will be very happy.
Many owners either wait too long to raise the bar, or never do it. Which in turn, becomes a bad song for their business. With this technique you can instantly increase profits.
This is just one of the many ways to increase profits. I’m sure we will get into that more later.
Until Then,
David R.
