We always have to hear the mantra “close more deals.” You’ve seen it on a FB ad somewhere, right? It’s always seen as the primary promise of someone scaling their company. It urges entrepreneurs and some sales teams to “focus on volume.” The issue is the fact that it overshadows the equally effective, yet less voiced, approach to charging higher prices.
Higher profits always fall between two choices:
While the former is commonly seen as a battlefield (companies strive to streamline operations, reduce expenditure, etc. You’ve seen the layoffs?), the latter also harbors a potentially more lucrative upside that many companies never explore…
For some, charging higher prices is something to worry about. “What if I charge too much and I won’t close any deals?” Well, what if you charged higher amounts, had a better clientele, and had less deals to actually deal with? Higher prices can be seen as a moat around the business. Most companies will race to the bottom just by undercutting their competitors' prices to attract the customer. If you choose to not got this route, you can then brand your services and yourself as a premium provider. All in all, this will allow you to justify the price hikes. As we said with “better clientele,” taking this route will allow you to target and attract a different set of customers.
The Upside of Increasing Prices
To successfully implement a high-price strategy, consider the following steps:
When you boost pricing, an opportunity to further your business from your competitors becomes greater. You can make multiple moves; reinvesting in hiring, improving product offerings, and expanding market reach. Everyone will work to get to the bottom, meaning they’ll decrease their prices until they overdo the competition.
It’s an essential part of your business to just close more deals. However, developing a strategy around charging prices offers an untapped profitability potential. When you boost prices, you position yourself as the premium choice.