Wednesday, March 24, 2010

Raising Your Prices. Where to Start

The economy is still stuck in neutral and you've cut every expense you can possibly consider (goodbye two-ply toilet paper). Now, it's time to generate some revenue.
One option many owners never consider is raising prices. I know, I know...the economy, blah, blah, blah.
Dale Furtwengler, author of the book, "Pricing for Profit: How to Command Higher Prices for Your Products and Services," says now is the ideal time to create long-term profits and finally get paid what you are worth.
So, let's say you want to raise your prices tomorrow. Where to start?
"You start by ascertaining which of your product or service offerings generate the highest margins," Furtwengler said. "Then, identify which of your customers in that group are providing the highest margins. Next, you determine why they're willing to pay this premium--is it image, innovation or time-savings? Calculate the value in real numbers that these customers get that make them willing to pay the premium. Set your sales script to communicate that real number value, and then revamp your marketing to attract those customers."
--Ron Ameln, SBM


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