3 Secrets to Keeping High Profits, Low Prices, and Happy Customers
A lot of factors can come into play and result in higher prices of products and services. As a business, there are just some things that are out of your hands that could affect pricing in your industry. Of course, there is also the goal of increasing your profit over time. The growth of your business should reflect the amount of money that’s coming in.
Raising your prices seems like a logical idea if you consider the circumstances mentioned above. However, by doing so, you run the risk of making your customers unhappy. Some customers, especially the loyal ones, may be understanding towards a price increase especially if you explain why and you notify them before the new rates take effect. Nevertheless, you are still likely to lose a significant portion of your clientele.
Remember, though, that this doesn’t have to happen. Here are three secrets to keeping your customers happy with low prices while earning high profits for your business.
Look into every option available to you
One of the most common reasons companies raise their prices is higher production costs. When the materials you’re using or the cost of keeping your workforce is getting more expensive, it may seem reasonable to opt for a price hike. But before you go down this path, make sure to look into every other alternative.
Is it possible to source cheaper materials without sacrificing the quality of your products? Perhaps, you can work with a smaller team in your office and outsource administrative or seasonal work to a virtual assistant. Check with staffing companies as they may be able to advise you on getting the best out of a virtual team. Review your workflow processes as well. You may find some procedures that are unnecessarily costing you, and you might want to consider redesigning how your business operates.
Ensure that your finances are done right
If finance isn’t your strongest suit, you might want to consult with an expert. You may be missing something since you’re too closely involved in the business. Having an outsider look at your finances gives you an unbiased perspective as to how your company stands financially. This also helps you formulate objective and sensible solutions to your financial issues.
Implement the three-level pricing strategy
Tiered pricing has always proven its effectiveness. It allows you to optimally price your products and services, and it gives your customers enough options to choose from. The trick here is to determine a price that is “just right” and make it the middle or medium price. It’s typically easiest to steer customers into opting for the middle tier so make sure it is the ideal price for both you and your customers.
There are surely a ton of other secrets to successfully hit these three goals: high profits, low prices, and happy customers. The approach may slightly differ when you’re an established company or you’re starting an online business or a small physical shop. Nevertheless, these three pieces of general advice are often a good starting point.