If one of your New Year’s resolutions is to increase profits in 2016, one easy way to do that is to raise your prices. But before you do, read on, because increasing prices isn’t something you want to do haphazardly.
First, Increase Value
While it depends on what you sell, I’m willing to bet that your customers shop around a bit to find the best price on comparable products or services to what you sell. Am I right? So raising your rates isn’t going to win you any friends. But if you also raise the value of what you offer, people will be willing to pay more.
What I mean is: what additional value can you offer that your competitors don’t? Maybe you offer free one-on-one support for the first year with your business services, where your competition charges for it. Or you add a free gift with purchase. There are countless ways to add value to what you’re selling. Spend some time looking at what your competitors offer to find gaps that you can fill with your own value.
Test Out Different Price Points
The conundrum with pricing is that if you charge too much, people won’t buy. If you charge too little, everyone will buy, and you’ll be swamped with orders but left with little profit. It’s a challenge to find the perfect price point.
I suggest testing out a few different prices by setting up landing pages for each, then promoting each. Maybe you test the $10 price point through a Facebook ad, share your $15 price page on other social media, and then try out the $20 price on a banner ad on a high-end website.
Pay careful attention to results, because they’ll be the indicator of which price is the one people will pay.
Slow Your Roll
Rather than amping up your pricing all at once by 50%, ease into it gradually. Implementing a series of small price hikes may be easier for your customers to accept than one giant price leap.
If sales slow at one price increase, mitigate that by offering plenty of promotions that give people a discount on that high price. If you don’t want to lose more customers, don’t continue to raise your price beyond that point.
It’s essential that you’re making enough profit to cover your expenses (and then some). Just be smart about your pricing policy so you don’t turn off customers.
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