When I speak with a client and suggest that they try raising their business’ prices, there’s usually a lot of skepticism. After all, who wants to risk losing business to sky-high price tags?
Luckily, that's not what I'm suggesting. What I am suggesting is taking some time to carefully and methodically test out higher prices. Online, it’s especially easy to see how new prices will play out. Just raise your rates on your e-commerce platform of choice and let the market tell you what to do.
For brick and mortar stores, it’s a bit trickier, but not much. If you’ve got a franchise, just pick a location and adjust prices at that one store. That way you can directly compare the sales of your “normal” pricing to the proposed price. If you only have one location, then just treat it like an e-commerce site and update the prices store-wide. The only difference is that you’ll use your past months’ sales to determine if the price change was effective or not.
How ever you implement it, the not-so-secret secret to success here is to start with small changes. Start with a small, proportional uptick in price one month, then continue on that price until it stops working. And trust me, you’ll know when it’s not working. When your orders start diminishing drastically, that’ll be the market telling you to correct course.
This should be an ongoing, data-driven process. It doesn’t have to be time intensive, but it does need strict controls and reviews on a consistent basis.
When working with Silverwind clients, I’d say that 60% find they can afford to increase their prices. And even for the other 40%, they at least know that they’re at the right price point and can move forward more confidently. Price testing gets treated like a four-letter word, but if you give it a fair shot, I think you’ll be surprised at how much your business stands to gain.