A title like that may raise a few eyebrows as nobody likes to see the goods and services they buy spike in price. From a business standpoint, however, there is no harm in selling what a product for what is worth. Millions of businesses fail to balance boosting competitive prices and actually making a profit. As Grant Cardone, contributor of Entrepreneur.com, noted in his article ‘3 Strategies for Raising Your Prices,’ “the number one reason business fail is, simply, their prices are too low.”
Grant Cardone, Entrepreneur – ‘3 Strategies for Raising Your Prices‘
Even if your industry is competitive, trying to offer the absolute lowest prices in business suicide. While you don’t want to be known for outrageous prices, as a business your focus should be on value. That means even if the price is a little higher than the competition, your business gives people a reason to come to you and pay a little extra.
Your business needs to make money to expand and best serve customers, simple as that. If you are afraid to nudge your prices up a little bit, here are a few tips from Cardone on how to increase prices.
1. Offer alternatives
For each of your products or services, give your customers a few choices and allow them to make sense of the prices. For example, offer a range of services and prices that reflect those services. This also applies to products, with the higher priced items having more features or being made of better materials, etc.
Photo Credit: David Goehring
2. Menu Pricing
Write out your products or services in a menu format that ranges from highest to lowest prices. This simple trick of ordering goods in a hierarchy leads customers to realize that the “highest price is the better deal.” This should be true of your products anyway, this simply helps customers visualize the value.
3. Just do it
To be honest, you don’t need a reason or justification to raise prices. You should sell your products and services for what you think they are worth, despite the competition. Try slightly increasing the prices see if it works. You can even bundle products and services together to increase the average sales price.
Don’t be afraid to raise your prices
Regardless of whether you are selling luxury products or cheap novelties, these strategies work to help your business make money. Remember that prices are not what make a customer more loyal. As long as you make the experience for customers worth the price, that is what will keep them coming back.