The fastest and most effective way for a company to realise its maximum profit is to get its pricing right. The right price can boost profits far quicker than increasing sales volume; the wrong price can shrink profits just as quickly.
Typically - if you are offering a product that provides more value than the competing alternative, customers will choose your offering. If your offer provides less value than its competing alternative, customers look elsewhere.
What to Consider?
Need to change your pricing strategy? That's a pretty big deal and a decision not to be taken lightly. The best way to avoid having a heart attack whilst you ponder this knotty issue is to break down (not literally) all the things you need to consider into smaller "compartments" and resolve each issue separately before you come to a final decision on your optimum pricing strategy and how you are going to achieve it.
It's an unfortunate fact of life that almost every business will be leaking profits through their pricing execution. Of course, there are small leaks and then there are the floods – but in most cases management is unaware of these leaks because they lack the awareness and visibility to spot where the price leakage occurs.
Topics: Margin Growth
We hope your Christmas was a good one, but now it's back to work for the New Year with (here's hoping) renewed intentions and impetus to improve those margins. Unfortunately there are no quick fixes, "no work, no pain" will not boost your margins. It will require major strategic changes, but if you're truly serious about becoming more profitable, then read on.