Right then just how can I put up my prices?
First of all you must appreciate the benefits that you will get as a business owner, a small percentage on the price is a significantly greater increase in profit margin. You must also realise that losing one or two customers is not proof that you were wrong, because depending on your margins etc you might be able to lose 25% of your customers and still make more money?
But this is an art not a science so here are some practical ideas:
So look at periods of peak demand and stop price cutting at that time, If you want your lawnmower serviced now you have left it a little late to get it done cheap.
Or as Nigel Botterill (The Entrepreneurs Circle) suggests - if you run a service business such as a therapist, hairdresser or dentist etc. then premium price the appointments on weekends or evenings & early mornings.
For some of us it might be charging more for a priority service or a premium product that includes ongoing support “get your car serviced now and we will give you a free safety check”
It might be simply charging a realistic rate for delivery.
Some products are simply not price sensitive – like salt I doubt any of us know how much a kilo of salt costs but whether it is 19p or £2.79 we will buy the same amount because we need it.
Some products need to cost more.
Would you (or your insurance company) be happier with a 79p padlock on your garage or shed, or one that cost at least a fiver?
If nothing else why not offer your best price to a customer that buys in quantity or rebooks for next time automatically.
We are all scared that our customers will desert us if we increase our prices, but the majority of them use us because we are good at what we do and offer good service!
We simply do not need the customer who is only with us because of price – it may feel good now but they will desert you as soon as someone cheaper comes along, and there will always be someone cheaper, someone who does not do as good a job, who makes no effort to help the customer, someone who is on the hobble, someone who is not insured etcetera etcetera!
Are you in business to make money or subsidise your customer?
Give me a call on 01550 739 016 if you want to chat through how you can make this work in your business