Price Raising Strategies
Of the 28 million small businesses in America, 21 million lose money and this proportion is likely to be similar the world over. Often, businesses fail because their prices are too low and they operate on margins so small they are unable to expand and service customers. Unless you are extremely well capitalised, you should not attempt to offer the lowest prices in your market.
There is no company that can’t increase prices if they understand a few simple tips:
- Just increase price
You don’t need a reason or justification to raise prices, just do it. Try increasing your prices, even a little, and see if it sticks. If you are scared to raise the price, bundle products and services to increase your average sales price.
- Magic of alternatives
Choices allow the buyer to make sense of the price. When you show the price of a product or service, always offer alternate products or services to make logical sense of price. Provide a higher and lower offer on each side of every offer.
- Menu pricing
Organise your services on a menu with pricing highest to lowest. People believe what they see more than what they hear. Contrary to popular belief, selling your products or services at the lowest price doesn’t make customers more loyal or happier. The customers that cause you the most trouble typically are the ones who paid the least.
These three strategies work whether you sell a product or a service, expensive luxury products or entry level trinkets. We really do get what we pay for, so sell value and the overall exceptional experience associated with what you have to offer. People will always pay more for something they love that solves a problem. Never be afraid to raise price.
Share your methodology for raising prices
Adapted from an article by Grant Cardone, www.entrepreneur.com
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