Pricing for Maximum Profits

As you read through this issue’s special report on sales, it is a great time to think about your pricing. Most business owners I know are always trying to improve their staffs’ selling skills in order to move more products and services to more people, and to increase profits. But pricing can have a significant impact on profits, as well.

Using an oversimplified example, if you didn’t lose any customers after a 10 percent price increase, you would see a 10 percent increase to your bottom line without any additional sales efforts.

There are plenty of considerations and tactics when it comes to pricing. Here are a few ideas:

Even with the economic recovery we are experiencing, many consumers (B2B and B2C) have changed their buying habits. This is a great time to review your pricing, and compare it to other available options, including competitors.

Consider ways you can increase what your customers’ spend with you. This can be done with creative bundling or packaging options, and can be very profitable if you bundle in a product that has a high perceived value, but costs little to provide.

If you need to lower prices or offer new discounts, consider changing payment terms so you are paid faster, or asking to become your customer’s only vendor for your product: “I can give you the 10 percent off you are looking for, but I need to be paid in advance” or “I can lower the price by 7.5 percent, but I would like to become your only vendor and receive all of your business.”

If the value is there, don’t be afraid to consider raising your prices. For more pricing strategies, read “Pricing for Success: Simple Pricing Ideas with Big Bottom Line Impact.”