Posts for the ‘Small Business Leadership Advice’ Category
When (and How) to Raise Your Prices
Sometimes, when service providers get overbooked, they complain about it. Oh, how easily we forget what it was like when we were struggling our way up the ladder. Moreover, I’ve witnessed many a service provider resist raising prices, which might allow them to work with fewer clients, for fear of loosing business as this simple story will illustrate.
A have an acupuncturist that I see from time to time. He might be the best known acupuncturist in my town. He’s certainly the most experienced and has an overbooked practice because of it. Every time I see him he complains (in a nice way) that he’s overworked and can’t keep up with demand. He doesn’t want to change the model of his business, in that he still wants to see patients himself and doesn’t want to manage other acupuncturists, but he resists raising prices, nonetheless. So, every time I see him, I complain to him (in a nice way) that his prices are too low and, in fact, should be doubled. His answer is always the same, “But, Michael, if I double my rates, I’ll loose half my clients.” I’ll pause here to let that sink in. First of all, he won’t loose half his clients but even if he did, he’d still make the same money and have twice as much free time. More likely, he’ll lose just a few clients but make much more money because he doubled his prices.
If you do raise prices, it’s a good idea to let clients know why. There’s nothing wrong with saying that you’re fortunate to be in high demand and are raising your prices so that you can give more attention to your clients. Or, that certain expenses related to serving your clients have increased and you’re raising your prices accordingly. People like the truth. I’d prefer to be open and honest with my clients, running the risk of disappointing a few of them, then be manipulative or obtuse, running the risk of damaging my soul. Just be sure to let them know what the new rates will be and when they go into effect. Give them reasonable notice and consider giving them lots of advance noticed so they can adjust to the changes. And, most importantly, remind them of the continuing benefits they’ll get from working with you.
On the flip side, you don’t always have to carry over all costs or eek out every bit of profit on every sale. Sometimes you can earn long-term marketing juice by taking one in the chin for the sake of your clients. My son’s favorite pizza place is an organic one called Jules Thin Crust Pizza. At one point last summer the price of cheese went down. Now, the average customer is not going to know this. I eat cheese but I don’t buy it in bulk. It would have been easy, and cheesy (sorry, couldn’t resist), for Jules to just pocket the extra profit from the savings. But no, instead, they put up a big sign announcing the cheap cheese and that they were lowering prices because of it. All summer, their busy season, no less, prices where reduced. I asked the owner, John, whether the cheese experiment cultured nicely or stunk up the place (sorry, again, couldn’t resist). He said it was a huge success as a day did not pass without a multitude of “thank you’s” being tossed his way. Now, John’s not the type to boast about sales but I’m pretty sure he saw more business because of his gastrointestinal stimulus package.
10 Comments »Bait and Switch Sales-Sky Radio Network and American Airlines
Check out this email my office received yesterday from a “radio station” that produces programming for American Airlines. At first, it appears to be a producer reaching out to me for a radio interview based on my work but right before he signes off notice how he slips in the word “cost.”
This is not the first time I’ve received direct outreach like this and I’m sure it won’t be the last. Also notice the use of the “confidentiality notice” at the very end of the email. Is this supposed to protect the sender from beging labeled a spammer? Because, it won’t work. You can’t put someone on a distribution/broadcast list and then claim it’s “privileged information.” This stuff makes my blood boil because it’s what gives salespeople a bad name.
UPDATE: I’m not saying that what this guy is offering is not going to get you business. It might (or might not) be a good marketing strategy to be on the sky radio program but that’s not germane to my point. I simply object to his kind of sales tactic.
______________________________________________________________________________
Time-Sensitive Material
Michael Port & Associates LLC
DeHart, Gayla S.
Hi Gayla,
My name is Steven James and I’m a producer for American Airlines “Business & Technology Report”. Our talk program entertains millions of travelers each month.
I’d like to personally invite a spokesperson from your company to participate in a interview segment on our upcoming edition of “The Innovators” airing worldwide to 8.4 million throughout July and August 2010.
For participation details and cost, click http://www.skyradionet.net/aapromo.
Please contact me soon as space is limited.
Steven James
Producer
Sky Radio Network
5320 Laurel Canyon Boulevard
Valley Village, CA 91607
818-232-7069 Direct
818-301-2085 Fax
sj@skyradionet.net
www.skyradionet.com
Producers of the #1 Talk Shows in the Sky and on the Web
CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, is for the sole use of the intended recipient(s) and may contain confidential and privileged information. Any unauthorized review, copy, use, disclosure, or distribution is prohibited. If you are not the intended recipient, please contact the sender by reply e-mail and destroy all copies of the original message. To be removed from our invitation list, reply to this email stating your intent or click the following link: Unsubscribe me from this list
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No Comments »Banking Institutions More Dangerous Than Armies
“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”
— Thomas Jefferson, 3rd president of US (1743 – 1826)
Things that make you go, mmmmmm…..
6 Comments »Airing Sunday on MSNBC
I’ll be on MSNBC’s Your Business this Sunday at 7:30am ET. Yes, DVR would be a good option. Jean Chatzky did a great job filling in as host for the consumate JJ Ramberg. But, to be perfectly honest, I wasn’t crazy about the other guest. I didn’t find him particularly gracious as will be evident when you watch the episode.
5 Comments »How to be a superhero
My 5-year-old son, Jake, looked at the cover of Seth’s new book, Linchpin, which was sitting on my bedside table, and remarked, “Daddy, does that book teach you how to be a superhero?” I smiled and said, “Why, yes. Indeed it does.”
4 Comments »
