You want to raise prices, but fear holds you back. This is true at almost every company today, so don’t feel alone.
Horrible outcomes are possible. But they will likely only happen if you significantly raise prices across the board, on all products, to all customers. Don’t do this!
Eliminating catastrophic consequences (and reducing your fear), simply requires a well-thought-out plan. Below are several steps you can take to reduce the risk while enjoying the benefits of higher prices.
Step 1: Identify opportunities. Which buyers or customers would pay you more? Which products deliver more value than you charge for? Create your initial plan for raising prices around these customers and products.
Step 2: Make predictions. What are expected, best-case, and worst-case scenarios? Do the math. How much will revenue and profit change under each scenario?
Step 3: Create a Pushback Plan: When a customer complains about your higher prices, what will you do? This is especially important for recurring customers. A good plan will keep unhappy customers from churning.
Step 4: Create a test plan. Don’t implement your price increase on all potential customers and products at once. Find sub-segments you can test on. Compare the results to your predictions. What scenario in step 2 is most like your actual outcomes?
Every company and industry has its own nuances for raising prices, but these four steps are pretty universal. Tweak them for your situation and they will make you more confident that you can raise prices. Remember, every incremental dollar from a price increase is incremental profit.
Let me know if you need some help.
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Now, go make an impact!
