Do you have a pricing strategy that supports your business growth?

Saturday, 01 October 2011 12:15 |

Written by Vanessa Lanham-Day |

Many business owners are fearful of raising their prices or offering premium products to their customers.

But consider this ...you are almost certainly selling everything for less than you need to.

And you are selling less of it than you would at a higher price.

After all - if you live by price, you die by price. All other things being equal, the only way customers can compare your product or service is on price. You have effectively commoditised your business and slashed you margins in an attempt to buy sales.

However, if you've done your homework and have got your positioning right, you are working with a high-value database where you can target specific groups of customers and you have a strong communications strategy reminding them of how great you are and why they should buy from you, it becomes much easier to charge higher prices AND increase your sales volume.

Do you have a a premium priced product?

Are you up selling to your customers?

Fact - 20% of your customers will pay for a premium product - but only if you make it available to them.

Do you have any kind of premium product for your customers? For example, in the Entrepreneur’s Circle, we offer a 100 club option. Members pay more to get additional benefits, more one to one time with Nigel Botterill, additional time at meetings, front row seats, more online access and so forth.

Universal studios is another great example of premium pricing - $120 dollars for a standard one day pass, versus $210 for a VIP express ticket - and they sell out 1000 tickets every day - 365 days a year. That's over $32 million in revenue a year with minimum outcosts - and the fact is that the park was open for 10 years before they introduced it!

As a great example of upselling - by offering additional products ... I don't know if anyone has been to the Empire State Building - but it's possible to buy ...