10 Tips to better pricing http://bit.ly/9aFpu4 How 1% increase in revenue usually leads to 11% increase in profit.
There’s a lot of detail, and not every suggestion applies to every business, but these will find their way into my “How to Grow your Production and Post Production business” (Next up May 19 in San Francisco with SF Cutters.)
- Stop marking up costs.
- Set prices that capture value.
- Create a value statement.
- Reinforce to employees (and yourself) that it is okay to earn high profits.
- Realize that a discount today doesn’t guarantee a premium tomorrow.
- Understand that customers have different pricing needs.
- Provide pick-a-plan options. (Some people want hourly, some want project price)
- Offer product (or service) versions. (My brother has a premium roof gutter business, and a competing budget roof gutter business.)
- Implement differential pricing.
- Use pricing tactics to complete your customer puzzle.
and in summary:
Since pricing is an underutilized strategy, it is fertile ground for new profits. The beauty of focusing on pricing is that many concepts are straightforward to implement and can start producing profits almost immediately.