Tuesday, June 21, 2011

Increasing Prices Without Losing Business

Are you able to keep or increase your business when you raise prices?

There are three important steps to achieving this goal:

1.  Know your market

The first step to achieving higher prices is to know your market. Get in touch with your competition and get quotes. Ask your clients what they're paying for products like yours. Learn your market and make an IMMEDIATE adjustment when you spot an opportunity.

I recently called our competitors to uncover what they were charging for their products. Although the pricing of our products was similar, I noticed that they were charging considerably more for transporting their products than us. Transportation is the second largest revenue steam at my company and this was big chance for me.

I immediately increased our transportation fees by 50% and guess what? Our customers didn't flinch. They kept ordering ! In a month I added roughly 3% to the bottom line without doing anything different except quoting higher prices. Talk about return on investment! But first I had to gain a better a better understanding of the market.

2.  Enhance your level of service

The second step to increasing your prices is to offer more and better SERVICE. If you're able to find ways to increases your service offering, your client will pay you more.

People will pay you depending on how valuable you are to them. Price and value two very different things. Price is what you set, value is what the customer gets.

The good news is that you can influence your value. You have a say in this! All you've got to do is offer more and better service. If you can influence value, then you can influence price as price follows value.

3.  Ask for higher prices

The final step to achieving higher prices is to request them. After you gain a better familiarity with your market and improve your service offering , you're fully equipped to raise prices.

Have confidence when you request your higher prices. If you believe you are worth it, so will your clients. Never sell yourself short.


There are small things that you can do right now to increase your service offering. For example, I am sure you spend great amount of time trying to find new clients, but how much time do you spend following up and thanking them for their business?

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