Pricing drives margins as well as the CLOSE!

By Randy Donaldson and Dede Gossage

Our office uses a pricing tool that tells how much wiggle room you have to sustain sales volume when prices are increased or decreased. The premise is this; given current gross margin percentages, the matrix grid reflects sales volume maintained, lost or increased given a pricing adjustment. But often we are asked, “How can I increase sales, despite the intense competition?”.

Companies set prices based on their own costs or on the prices of their competitors and ignore a very important pricing factor; customer demand. Pricing Strategy should always include something called, ‘Customer value-based pricing’.

Most business owners are afraid to increase prices for fear of sales loss but don’t know how to implement a pricing strategy. The reality is, the marketplace is facing increased costs. Over time, businesses must find a way to pass the associated costs on to their customers if they are going to stay in business. Whatever your past price orientation, take a look at the case study (click on the photo) and consider the strategies presented in this article. And as always, if you have questions or want to talk further, give us a call. 770-531-5681.

Pricing Strategy Article


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