Why do you charge what you do? Could it be more? Could you make more by charging less?
The art of pricing is an important part of how any business functions. Price too low and your margins are impacted, price too high and your customers will go elsewhere.
But in all walks of life, we see examples of widely divergent pricing for ostensibly similar items with customer choices driven by all manner of non-price indicators and perceptions of value.
Some organisations choose to be ‘reassuringly expensive’ as a famous lager brand once boasted, others to have eye-catching offers to tempt you on board.
Many organisations pursue subscription models that make expensive products seem affordable whilst creating long-term reliable revenue flows.
But which approach is right for your business? And have your team got the skills and understanding to make sure your organisation is optimising it’s pricing strategy and not leaving money on the table?
If you work in accounts, or sales and marketing, or you are a business owner with control over pricing, it is essential to know how to charge out time for staff, how to calculate profit on a job, or project profit based on expected turnover. After all these choices can make a big difference to the financial health and performance of your organisation.
Demystifying price and creating a common appreciation of what can be done to optimise pricing in the best interests of customers, sales and the bottom line requires only a small-time investment.
Getting an understanding of the key concepts and data sets in play
will help your organisation set prices, maximise sales and optimise returns.
If you're able to increase your prices, your investment in understanding pricing will quickly translate into a healthier bottom line.