Raising your prices is never easy, and the timing always sucks. But it’s an inevitable fact in most business models, so the key is learning how to best raise prices and still keep your customer base.
Our economy is giving everyone permission to raise their prices now.
With gas going up, airlines charging for everything and milk prices skyrocketing, Americans are getting used to hearing that prices on just about anything is going up. Which should give you a little bit of a free pass (well, almost).
The idea is not to exploit the opportunity, but to accept that customer spending might go down, and your margins might’ve been tight for a long time, and it’s simply the right time to raise prices, even if your costs haven’t gone up in the last six months.
It will be a while before price increases are as easily accepted as they are now.
Of course, if you can lower prices, that might be even better. It could make you a hero. But whatever you do, don’t allow your prices to just stay the same. Either capitalize on the opportunity to increase margins, or capitalize on increased volume via the marketing advantage of lower prices. But don’t let those prices stay the same.
4 responses so far ↓
Korina Meza // June 8, 2008 at 1:52 am |
Of course, if you can lower prices, that might be even better. It could make you a hero. But whatever you do, don’t allow your prices to just stay the same. Either capitalize on the opportunity to increase margins, or capitalize on increased volume via the marketing advantage of lower prices. But don’t let those prices stay the same.
Bill // June 11, 2008 at 8:37 am |
I think we’ll see a lot of price increases here shortly. One thing I would hold off on (at least as my first response) would be to lower prices. Unless pricing is your story (like Wal-Mart), I would instead first try to infuse more remarkableness into the experience.
Brett // June 11, 2008 at 12:37 pm |
Bill – I think you’re right. The low-price game gets to be no fun very quickly. My point is to look for promotional price cuts during a time when increases are the norm. Zig when everyone else is zagging. But don’t make price what you hang your hat on – keep your product remarkable. Just use the price cut as a conversation starter.
Somebody’s been reading his Purple Cow . . .. .
Bill // June 13, 2008 at 12:51 pm |
Ya, I had a nice tall glass of purple cow juice this morning.