Price for your market

I'll bet my socks that you would die a thousand deaths should you be told that you need to INCREASE YOUR PRICES. Here's the thing though. Please look back ten years ago. What were we paying for petrol and bread back then? Yes it was expensive. Yes, we struggled to make the month end. Ten years later, it's the same old same old. So what's up then?


We need inflation.
We need inflation. Sounds horrible I know, but kill inflation off and you will not have anything to feed "growth" with. Without inflation the only growth factory you can work with is volume. that's another story though and you will need your bean counter's hat on when you read it.

Price Points
When you have time, do a little research into "Price Points". I first came across this in some study material from Cory Rudl's company, The Internet Marketing Center. Derek Ghel now runs the company and is one of the biggest names in online marketing. A quick look at price pointing teaches you that sales will increase when you sell "perceived value" and not "whole dollar value". OK, that's my interpretation of it. It's plain English though. If you wanted to buy a new Lawn Mower and two shops advertised similar models, one at $49.95 and the other at $50.00, for some reason an internal lever in our brains tells us to go for the $49.95 deal. An astounding 200% more people will go for the $49.95 deal than for the $50.00 deal. Just look at the subject on Wikipaedia. Some astounding facts are waiting to be learned.

Test and Measure
The right pricing strategy cannot be arrived at simply by an executive decision. This has to be market tested. Tested and Measured. Exactly the same idea of testing and measuring as we applied to managing our leads and getting more sales, needs to be applied to finding the most acceptable price in our market. Testing and Measuring is HUGE business on it's own. McKinnnsey's and every other major business analysis offering all have their own method of Testing an Measuring. So it's not poppycock. It makes MONEY. Lots of it. So apply it in your own business.

Increase your prices and keep up with inflation
Now about increasing your own prices. Right now, July 2008, we are dealing with what would have been called a "depression" back in 1929. Prices are skyrocketing. Food prices here in the UK have escalated about 40% in the last twelve months. Funny, down on the tip of Africa, it's the same story, but they blame their inept Government for the rising prices. The UK blames the Oil Oligarchs.  We all look to someone else to blame, ignoring the fact that we need inflation. We have so much more today than our Grandparents had. TV, CDs, HDTV, Ipods, the list is endless :). It's all fueled by inflation.

So create a little of your own inflation and keep up with the global markets. Don't just do an across-the-board price increase. Test and measure. Launch a small advert in a publication which you know you can trust the results from. Results in this case are converted leads - SALES! Run a few tests. Split testing, again from the realm of Internet Marketing, will quickly tell you which advert is working.

You can expect your sales volume to decrease when you raise your prices. It's a natural reaction from the market to higher prices. You may not know that you can also expect to ease up a bit, not to have to work so hard.One small business I taught how to do this, took a brave step and increased their prices nearly 300%. From landing nearly fifty sales a month, they dropped to FOURTEEN for a whole MONTH! They had one week free do do those banal jobs like machine maintenance, preventative care that left undone, would normally cost them ten days downtime every two months. The best part was what they saw in their bank account at the end of the month. The Immediate Effect was each job left cash in the bank. Month end was met with a BIG SMILE and nearly 80 000 smackaroos in the account. Pretty little dollar bills. EIGHTY THOUSAND OF THEM!

Down in Cape Town, that beautiful city so bewitched by a mountain that they even sell wine in bottles shaped like the mountain, there I have a business friend started her business with a single advert and no inventory. That was a gutsy thing to try for sure!Demand has been ok, sales have been trickling along, but not leaving cash in the bank for the Month End. after a little help to deal with a fear about raising her prices, Julia realized that her product would still appeal to wealthy customers. So Julia raised he prices by 100%, ensuring that each job would leave 33% CASH IN THE BANK for the month end. The difference in the way she feels about her business has been interesting to observe. Jobs are no longer a dragon her time and energy. Each job adds to a feeling of well being, because Julia KNOWS each job WILL PUT cash in the bank.

Don't let inflation erode your business. As Mr T says in the Snickers ad...

"Don't be pathetic! Get some NUTS".

Raise your prices.

Test and measure

Two simple steps to creating a money making business machine.

Contact me if you would like to know more about my Five Steps to rescue your business. I call it SImpleFAST. Because it is. SIMPLE. And it 's FAST.