Bad Economy? Raise Your Prices!

out_of_business_saleOne of the strategies to growing your business is to increase your margins.  Makes perfect sense.  But in this economic environment, we are inclined to believe we need to lower prices to remain competitive.  It is a natural instinct to feel that when times are tight, people are going to shop for bargains more than ever before. 

But don’t make the same mistake as Biff in the cartoon above.  The goal of being in business IS TO MAKE A PROFIT.  Why bother running a business otherwise?  You do have to pay a mortgage and phone bills…  Now I am not advocating that you go out and jack up your prices for no reason.  That is a mistake.  But whacking prices to the bone is just as risky a business decision.

You must understand – the secret to increasing margins is to increase value.  There is a reason heart surgeons command a high salary.  They are skilled in ways most of us are not.  You need to position yourself in your market – the same way.

What happens when a potential customer looks at several buying options and cannot tell a difference between them?  The only way left to make a decision is by comparing prices – and you don’t want to get in that trap.  Designing a marketing message that conveys true and real value will make people want to buy – regardless of price.  If they feel they can’t be without your product or service – they won’t be.

Todd Schnick.  Be Intrepid.  www.intrepid-llc.com

Find Biff’s cartoon series blog at www.growthgaffe.com

  • Charles Mobley

    I agree Todd that value will be paid for by clients who need the services. When customers perceive your work is ‘just as good’ as the next guy then price plays a major factor. By giving superior service and having a personal rapport with your client base while delivering your efforts which outshines others you’ll find not only will you keep your business but increase it too. Don’t forget to ask for referrals.

  • Todd Schnick

    Thanks for the comment Charles. Good points all. And yes, when someone does see and appreciate your value – ASK FOR REFERRALS!