Pricing Lessons from The Gambler

​There are many aspects of pricing that are important to a business’ success. Knowing when and how to adjust prices is critical to ​your relationship with customers, the market and your business results – your profit.  ​​Find out more in this video, ​The Gambler and the Art of Pricing.

​Pricing Is More Than Just Price Increases

​In this blog you’ll understand that pricing is about more than just ​implementing price increases. ​Price increases are important to profitability, however in some cases the better thing to do is to hold prices and ​in others even lower them – i.e. the art of pricing. Understanding your position in the market and regularly reviewing it will help you develop a stronger intuition for when to do what.  

Lowering Prices

​You do have to be careful. Often times ​people mistakenly believe that if ​they lower prices more people will buy or people will buy more.  This assumption has been a costly mistake for many businesses. To often they don’t get the volume increase they ​hoped for and end up earning less money than before. It can happen that a price decrease brings bigger profits, but ​the right conditions must be present in order for it to happen. 

If you feel your prices are too high, first do your research. Understand what your target customers really think; are there segments within your target, what are they comparing it to in order to determine if the price is a fair exchange for value.  There are many reasons they might feel it’s too ​expensive; reasons that have nothing to do with what you’re offering or the price.

Holding Prices

​For key products, that are properly positioned you’ll probably want to hold the prices. Customers are often most price sensitive when it comes to the core products​ – core products being the products customers come to you for rather than accessory type products.​​​ However keep in mind that if you’re not keeping up with inflation then you’re actually lowering prices. Sometimes holding the price actually means a 1-2% price increase. While holding prices fairly steady on the core products, you might at the same time want to consider bigger increases on add-ons and complimentary services. Customers are generally less price sensitive here.

Raising Prices

Often times entrepreneurs are afraid of raising prices, even when customers are telling them they are priced too low. If customers are telling you ​you’re not charging enough…then ​it’s time. There are many ways to eloquently and with a minimum amount of pain implement price increases. However you also need to keep in mind that you might lose a customer or two; this is not the end of the world. If you implement it well then you’ll still end up ​more profitable in the end.

The Art of Pricing

​Now you know that pricing is an art form and more than simply implementing price increases. How do you monitor when and how to implement price increase? Share your thoughts and questions in the comment section below.

Enjoy Pricing!

Join me. Let's talk Pricing!

The 3rd Wednesday of the month we look at topics like…

JAN Where should I start with my pricing?
FEB Why profit isn't the bad word you think it is.
MAR Aligning your pricing strategy with biz goals
APR Should I offer tiers/packages for different segments?
MAY Why do I struggle to tell people what I charge?
JUN 3 simple actions when pricing objections arise

Add the dates to your calendar. using the link in the Zoom, email confirmation. Join one, a few or all. Events are usually 3rd Wednesday of the month at 16.00 Central European Time.

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Is it Time to Raise Prices?
And How to Do So Effectively.

Live Web Class

Raising prices isn’t as risky as you think it is.

Far too many businesses know they need to raise  prices but are afraid to do so. So they wait. And wait. And wait. Until it’s so painful they have no choice. That’s when raising prices gets riskier.

You need to know what to do and how. Find out more in this LIVE web class where we’ll look at:

  • Why people wait
  • Myths of raising prices
  • How to know when to do it
  • Tactics and strategies to do it effectively
Join me Oct 24th 17:00 CET /  11:00am EST.

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