Would you rather earn $100 each on ten customers or $10 each on one hundred?If you answered ten customers, you’re an efficient businessperson. Why expend extra effort dealing with ninety more people for no extra income? You are in business to make a profit, right?
In the same way, you might be leaving money on the table, charging less to sell more volume but earning a lower net profit if your prices aren't high enough. Ultimately, you want to charge as high a price as your most price-sensitive customers will pay. So if everyone can easily afford to buy your product, your prices are too low. Your most price-sensitive customers should feel the pinch. If you never encounter any price resistance, you’re leaving money on the table.
If it’s your job to set prices, I understand you don’t want to deal with customers endlessly grumbling over increases. But there’s an equilibrium between too high and too low, and it’s the manager’s job to determine where that point lies. Learn to justify your value.
If the last time you raised prices was during the Bush administration – especially the first one – it’s time to do it again. In the next post I’ll explain how to increase prices painlessly using a technique I named the Grandfather Technique.
You should raise prices each time your supplier does, and every time your market improves. In the next post, I’ll discuss exactly how to do this. Learn how to earn optimum profit without irritating or losing customers. In the next few weeks I'll share how you can design advertisements that work; avoid high printing charges; learn how to calculate your clients' value to your business, and much more.
profitable business All!
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