Have you been working hard all year for little or no profit? Customers making more demands but unwilling to pay for them?
It’s time to increase prices!
“Are you crazy? Don’t you know that the economy is still very weak?” I hear you say.
What’s the point of flogging yourself to death for customers that don’t appreciate the value you deliver? Increase prices in order to find out who will stick around and who doesn’t value your service. Losing customers like this isn’t a major problem as it frees up time to prospect for the ‘right’ customer.
Get your calculators out…
- You charge $1000 for your product
- Your Margin is $100 on each sale
- You have 10 Customers
- Total profit= $1000
You announce that you will increase prices by 10%
- New selling price is $1100
- New Margin is $200
- How many customers do you need to make the same total profit? 5, FIVE or half of your current customer base.
You could lose half of your current customers yet still make the same total profit! Just imagine what you could do with the time freed up from servicing these customers!
I suggest that you could find five customers that would be happy to pay your new price.
You create value for your customers so make sure they pay for it.