Double Dip Sales Strategy: Raise Your Price!
Since we're apparently in for a "double dip" recession, here's a creative strategy for surviving the slog: raise your price.
That sounds counter-intuitive when you're fighting for every sale, but sales success is all about making a profit, not about closing every deal. Raising your price makes each sale that you DO make larger and more profitable. And it often takes less effort (and creates more profit) to close a single $20,000 deal than to close two $10,000 ones.
The trick, of course, is raising your price without losing customers.
One way to do this is to make your customers feel like they're getting greater value than they thought. To do this, find elements of your offerings that 1) don't cost you much to provide, 2) add value to the customer, and 3) aren't currently on the customer's radar. Then you get those elements on that radar, before raising the price.
For example, suppose you have research showing that your customer's customers think the products they're buying from your customer is higher quality because your firm is part of the supply chain. If you can convince your customers it's of value, you can charge extra to let them put your brand on their product marketing materials. Or charge them extra to be included, as sample customers, in your trade advertisements.
Another way to raise price is to wait until you introduce a new feature. Of course, you need to make the case to the customer that the value of that new feature justifies the higher price.
Yet another painless way to raise price is to fold it into a new business model. For example, most software firms are now trying to get their customers to pay subscription fees rather than buy perpetual licenses. The customer ultimately ends up paying more in the long run, but less up front, making the price increase more palatable to the customer from a cash-flow standpoint.
Similarly, I've seen consulting firms switch customers from a fixed-price model to an hourly model. As long as their average project consumes more time than equivalent revenue they get from the fixed price, the consultant ultimately makes more money.
Yet another way is to raise price is to offer financing, in which case the interest payments increase the overall revenue and profit.
Needless to say, changes in pricing have to be handled diplomatically, and require the attention of a trained sales staff, along with some tactical support from the marketing team. However, if done wisely and well, there are few methods that are equally effective in painlessly bolstering the bottom line, even in hard times.
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