Pricing Strategies for Higher Profits-Part II

DOUBLE YOUR BUSINESS

Pricing strategies are so important, that I just couldn’t tell you everything yesterday.  Therefore, today we continue on this key strategy for increasing your profits.
 
We will keep on this topic of doubling your business all next week, to make sure you come away with at least 5 strategies that could each be improved at least 15% - which, when combined together, will yield a doubling of your bottom line.   
 
“More signs your prices are too low: 

1) You are getting lots of new clients without doing anything;
2) Your price is lower than all of your competitors; and
3) You have a big waiting list or backlog!”
 
Pricing Strategies
Yesterday I promised to give you 19 pricing strategies, but only delivered you 16 - oops!  Here are the final 3:
 
17. Promotional Pricing:  Pricing to promote a product is a very common application. There are many examples of promotional pricing including approaches such as BOGOF (Buy One Get One Free).
 
18. Geographical Pricing:  Geographical pricing is evident where there are variations in price in different parts of the world. For example rarity value, or where shipping costs increase price.
 
19. Value Pricing:  This approach is used where external factors such as recession or increased competition force companies to provide ‘value’ products and services to retain sales e.g. value meals at McDonalds.
 
Alternatives to Low Prices
So what are some alternatives to pricing low?  How about competing by providing better: results, reliability, dependability, predictability, competence, effectiveness, short delivery time, lifetime cost savings, quality, turn-key offering, and/or overall best value. 
 
Before you price your products or services, you need to develop a pricing perspective.  Do you want to be the low price provider?  Do you want to be the premium product?  What kink of clients do you want to serve?  Do you want a volume business?  Do you want a singular transaction relationship with your customers, or a long-term relationship with clients?  Are you providing high service or low service?
 
In other words, be deliberate about what you want your business to be about, what reputation you want known by your customers, and what perspective you want your customers to have about you.  From that conscious choice, you then can more effectively price your products.
 
Finally, it may be helpful to keep in mind why people typically price low.  Sometimes, it is a real business strategy to capture market share, perhaps to takeover the market.  Also, it could be a strategic decision to make up for low profit margins with high volume, because you are the low price leader.  However, often it is because business owners are fearful, have too few prospects, are insecure about the value they provide, and/or lack self-esteem.
 
Take a look in the mirror, and be honest with why you have priced your products or services the way you have.  Maybe it is time for a pricing makeover - even one of those extreme makeovers!
 
There are things you know you know; There are things you know you don’t know; and
There are things you don’t know that you don’t know.  The third one will kill your business - the effect of your pricing could be one of those things!

DAILY PRAYER  
Father, raise our sights to a higher level of expectancy of the value we deliver, of the worth of our business, and of the ways in which we uniquely and powerfully serve our customers.  Let us see that extra value deserves proper compensation.  If we deliver benefits to our customers commensurate with the eagles, help us not to price down with the turkeys. In Jesus name, Amen.
 
Challenge yourself not to use price as your competitive edge.  Someone can always undercut your prices, but it is much more difficult for someone to match other key benefits that you uniquely deliver to your customers.  Make your competitors stretch and sweat to keep up with you.  Resist a pricing war.
 
Grace and peace multiplied to you.