In these tough economic times (and even in good times) so many of us are afraid to raise prices primarily because we know in our hearts that we’re not offering a clear value and unique experience.
If you want to profitably increase your sales, you can start by offering some WOW and then make sure enough people hear, understand and can easily act on your offer!
No matter what times we live in, people do spend money. Sure, shoppers may be a bit more wary and discriminating during down-times, but when you offer true, visible, demonstrative and meaningful value, you can make more money and be more profitable selling your products and services at higher prices.
Pricing is a skill and an art that requires some planning and testing. You might gain some short-term market share and sales with discounts, but it could take you years to gain back your competitive positioning. And, if you are a luxury brand you could lose your brand identity while competing on low prices and turn your brand into a commodity.
I’m certainly not a fan of taking advantage of customers with higher non-justified pricing, but there are win-win ways to build profits for companies and build customer satisfaction at the same time.
Here are just some of the ways you can increase your pricing. Some good…some not so good.
Change package/serving size. CPGs do this a lot by reducing the package size a bit and related price, but your cost per ounce and/or pound increases. How does that make you feel when you discover you’re paying more for less?
Bulk/Bundle/Combo pricing/Price a la carte. Pricing your goods or services a la carte is a good way to increase prices and then show some extra value when a customer chooses to buy in bulk (think cable companies, McDonald’s combo meals, ride all day packages at amusement parks).
Raise grandfathered prices. You can rationalize a price increase message to your ‘pioneer’ customers because ‘costs do go up,’ but if/when you do raise prices on these folks, you need to recognize your customer’s loyalty with a little extra added value to soften the blow.
Raise prices for new customers. A much easier way to raise prices instead of a general price increase across the board.
Schedule a price increase. This helps prepare your customers and carefully inform them of the reasons why you’re increasing their cost of doing business with you.
Offer performance based guarantees. Providing performance based assurances on your higher priced products is a great way to justify higher priced goods and services.
Add a little extra value. Again, adding a little extra makes your offering a little bit better and helps people more easily digest price increases.
Be different – be unique. The very best way to sell your offerings at a higher price. In fact, add a guarantee and a little extra value and you’ll become a much admired and desired triple threat.
You can be a unique necessity or discretionary product or service too – it is profitably achievable. When you strive to be the Apple, Disney, BMW of your industry you’ll be able to command your price and see your profits soar.
I guarantee it!