Pricing: One Strong Year-End Move For Your Business
“Real World” Business Strategy Pricing Properly
“You are a product of your environment. So choose the environment that will best develop you toward your objective. Analyze your life in terms of its environment. Are the things around you helping you toward success – or are they holding you back?” – W. Clement Stone
Before I start this note, 10+ Things You Need to Know Before Filing Your Taxes in 2020 Webinar is Jan 7th at 7 pm Central. The $12.50 fee is being donated to St. Jude Children’s Research Hospital. Don’t miss your opportunity to learn how to save money this tax year, plus do a good deed. Register HERE
I take a look around the small business world sometimes, and I get a little sad.
Because it’s heartbreaking to watch so many small businesses go out of business or not bring home enough bacon simply because they get trapped into thinking about their pricing in the wrong way.
When you differentiate yourself based on price, you simply cannot provide value. You end up competing on the wrong playing field.
Sure — while price competitors have been in operation since the beginning of time, it’s important to understand that if YOU want to build a sustainable, scalable and one day SALE-able business, a core foundational piece of that puzzle is that you must be charging enough for your services.
You see, most business people under-price their products and services. And it’s my experience that price either isn’t or doesn’t have to be a very important factor in a consumer’s decision or the success of a business.
Position Your Business Properly
We should all seek to be positioned at the higher end of a price scale and have our competitors focused on selling from the perspective of being “cheaper” instead of being better.
I know of a chiropractor that is surrounded in his area by other doctors who charge $35 to $55 less per typical treatment. Yet his practice is bigger and more successful than three of his close competitors added together.
In my experience that’s not an exception — that’s a rule of business. Almost every time I’m asked by a client or friend to look at a business with an eye to help, one of the very first things I encourage is to raise prices or fees. Sometimes the adjustment is pretty dramatic.
Price is the laziest and riskiest advantage to market with. Buying business with lower prices is relatively easy … but keeping business obtained purely because of price becomes much more difficult. So, one way that you can immediately increase profits in 2020 is by increasing your prices.
You might say, “Okay, Ted, just how do I go about doing that?”
Well, the first (and easiest) answer is to simply do it. If you have a good relationship with your customers or clients, I guarantee you’ll be happily surprised by what happens. It won’t be the disaster you feared it would be.
Another smart strategy is to re-package what you currently provide, into “bundles” or packages, and watch your average transaction value during 2020 soar.
Lastly, much of this comes down to how you position your business. Are you drawing “price shoppers” with your marketing? Or, do you emphasize relationship and value — which are *not* tied to price? When you put structures into place that ensure a strong, personal connection to you or your staff, you will find that your customer list can weather an increase.
The beginning of a new year — yea, a new DECADE — might just be the perfect time to do this. Try it out, and let me know what happens.