50 Shades of Pay
Have you ever been in a situation when you were asked for a quote, and just because of the threat of being beaten down on price, you have submitted to a lower one, just to avoid that pain and to get paid? Only then to see your price readily accepted by the buyer who never even flinched, no pain at all, which meant instead of being beaten by the buyer, you beat up yourself?
This is the S&M approach to pricing and getting paid- and you’re always the last to be paid. Your wage is just what’s left over at the end of the month. Yours is the last mouth to be fed.
However there is another way to set your pricing and to get paid what you deserve. It starts by understanding the true costs of your products and services, including your own costs. Accountants call this the cost plus approach to pricing, so that you ensure that a profit is made on every product and service, and that each is carrying its own properly allocated share of overhead and no product is shackled into subsidisation of others.
Now the marketer’s approach to pricing is swap the S&M roles to charge what the market will bear. Sounds great, but before you can change your costume and accessories, you must define your market, because poorly targeted increases will cause the market to strike back. To prevent market whiplash you must understand your current profitability by segment.
Fear of the pain from increasing prices and loss of sales prevents many businesses testing this limit, but when they understand their profit structure, that pain evaporates and the ability to overcome the fear of market punishment increases as they realise they have no other choice but to increase their prices. Their current situation is unsustainable, and they are prepared to face their market fear rather than being manacled to unprofitable pricing.
Of course, you just can’t just break your pricing bonds by a simple increase on its own. This needs to be undertaken in a structured way. This may mean redefining your products, repackaging them, and variable increases by product category and market niche to break away. In my Price book, I show over 50 ways to increase your pay.
However without an analysis of your profit structure, such steps in the marketplace may feel like you are wearing a blindfold and being lead into a dungeon of pain.
Fortunately, there is a tool available to undertake this analysis, pulling away the blindfold and showing a clear pathway without the pain. This is available to anyone who joins the Small Business Success Club today.
Don’t submit to price domination, break free of your price shackles, with the Profitability Analysis tool, just the first that comes with Club membership. This is the tool that allows you to break out of your pricing bonds.
May Your Business Be – As You Plan It.
Dr Greg Chapman – The Profit Whisperer
Learn more about how these marketing strategies would work in your business when you request a Free Preview copy of the best selling Small Business book; The Five Pillars of Guaranteed Business Success
Or find out how to directly apply and implement these strategies into your business and achieve your goals by requesting a Complimentary Business Evaluation now.