If you’re selling PR products or services, or anything else for that matter, and you’re tempted to lower your prices for fear your competitors will eat you alive during this bad economy, stop and take a deep breath before you do something stupid.
Business consultant Paul Lemberg says automatically lowering prices can be the quickest way to the poor house. One of five formulas he advocates for doubling your business this year is to increase your profit margin. And there are only two ways to do that: lower your costs or increase your prices.
Why increasing prices can be easy
Increasing prices, he says, is easier than you think. That’s because customers don’t necessarily shop for the lowest price. Many of them shop for the best value. If you can communicate value at the same time you raise your prices, you might hear nary a whimper.
For example, when raising prices, you can explain why your product is of superior value, superior quality and why the customer will get a superior return on investment.
That’s what happened several years ago when I raised the price of my special reports on how to do publicity campaigns from $7 to $9, and then again from $9 to $10. Because the reports are updated every few years, it’s a good value. I sell thousands of reports a year. So far, I’ve heard only a handful of comments from people saying they noticed the two price increases. Only one or two people have complained. And my profit margin on those products has increased significantly.
During the one-hour telseminar I conducted with Paul last week on 5 Ways to Double Your Business in 2009, he explained all five formulas and gave lots of examples on how to work them into your business model. (Hint: Formula #1 is to increase your profit margin.)
You can listen below.
Then head over to the Stompernet website and take the ”MBA in a Box” challenge on the left side of the screen to see if you have what it takes to start incorporating Paul’s formulas and ideas into whatever you’re selling. On the right side of the screen, enter your name and email address to get free access to “Formula Five Unleashed,” the private video Paul created that explains more about how to double your business this year.
Stay tuned for more information on when Stompernet releases Formula Five.