Are You Losing Money Because Your Price Isn't Right?
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 ...
If your price isn't right then you're going to be losing money!
copyright: 4p business development
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 ...
For more than 40 years Kath specialised in sales & marketing, operations and general management. During that time she studied a business degree at London Thames Valley University and a coaching and mentoring degree at Oxford Westminster, started a successful innovative subsidiary business in Essex and was General Manager of a ￡12.5m company in Maidenhead.
Kath is passionate about coaching and mentoring business owner/managers to help them achieve their goals and aspirations. Her emotional intelligence combined with her warm, incisive and curious style ensure consistently good results. She encourages business owners to develop an entrepreneurial approach to their business and works with businesses at various stages from pre-start and start-up, through to high growth and exit, enabling the business to be successful and the owner to achieve his or her highest aspirations.
Kath is an approved and accredited Skills Advisor, and is a professional coach holding a certificate in Coaching & Mentoring Practice from Oxford Brookes University. She is a local Town Councillor, a Young Enterprise mentor, mentor of women through South East Women Mentoring Service, a member of The British American Association and an avid networker.