The Art of Raising Prices: Three Practical Strategies That Will Change Your Perspective About Pricing

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Raising prices is one particular topic that almost every business owner is afraid of. The reason is quite common: they are scared of losing prospects and loyal customers.

However, along with that fear comes a big question: Why do so many entrepreneurs and startups lose their way at the game of business?

One of the biggest reasons why businesses fail is, simply, because their prices are too low. They don’t sell their products at higher prices, then they operate on small margins that are unable to expand. That said, unless you are extremely well capitalised, you should not attempt to offer the lowest prices in your market. The old marketing tactic that you have the most competitive price in the market will not work anymore. Trying to match or beat your competitors on price is a suicide mission, not a wise business practice. Your business needs the increased margins in order to expand and deliver better services to customers. Appropriate pricing is essential and, if necessary, you must raise yours.

Here are three practical tips to successfully increase your prices without hurting anyone:

1. Just Increase Your Price

You don’t need a reason or justification to raise prices. Just do it and see the result. Try increasing your prices, even a little, and see if it works. If you are still scared to raise the price,you can bundle your products and services to increase your average sales price.

2. Give Them Options

Choices allow buyers to rationalise the price. When you show the price of a desired product or service, always offer alternative products or services to help them understand the logical sense of your price. Provide a higher and lower offer on each side of every offer.

3. Menu Pricing

Organize your services on a menu with pricing from highest to lowest. People believe what they see more than what they hear.

Conclusion

These three strategies work whether you sell a product or a service, tangibles or intangibles, expensive luxury products or entry level trinkets, in any and all industries. Contrary to popular belief, selling your products or services at the lowest price doesn’t make your customers more loyal or happier. In reality, customers that cause you the most trouble typically are the ones who paid the least. Customers must get what they pay for, so sell your value and the overall exceptional experience associated with what you have to offer. People will always pay more for something they love that solves a problem. Never be afraid to raise price.