Pricing for Profit : How to Command Higher Prices for Your Products and Services

Many small business owners are trapped by industry pricing and market misconceptions, when they could be compensated for the true value of the product or service being offered. The low price they feel compelled to offer limits their ability to generate profits which, in turn, slows their response to changing customer needs. The good news is that a business can command almost any price it chooses by focusing on the value--not the cost--to the customer. Pricing for Profit shows businesspeople how to break out of the stranglehold of industry pricing and charge more for their wares (regardless of the competition) without alienating their customers. Readers will learn how to: - Quantify the value of their products or services - Distinguish between price buyers and value buyers - Bundle their offerings for competitive advantage and increased customer value - Craft a powerful marketing message that communicates value - Generate more unit sales and close more sales overall, at higher prices - Make more money with less effort Filled with easy-to-use formulas, sample scripts, clear examples, instructive exercises, and more, this accessible and practical guide is a must-read for businesspeople who want to be well-paid for the value they provide. Contents 6 Acknowledgments 12 Introduction 16 1 Ignorance Isn't Bliss: It's EXPENSIVE 19 Costly for You 19 Lost Revenues: Leaving Money on the Table 19 Productivity Costs 22 Wrong Customers 25 Other Hidden Costs 27 Staffing Costs 29 Quality Costs 29 Costly for Your Customers 32 Subprime Mortgages 32 WalMart 33 American Airlines 35 The "Big Three" Automakers 35 Our Lack of Name Awareness 37 Our Customers Only Care About Price 38 Our Competitors Won't Raise Prices 39 We'll Lose Market Share 39 Executive Summary 41 2 Know Thyself . . . and You'll Know Others, Too 43 Selling Styles Mirror Buying Habits 43 Know Thyself 44 Apparel 45 Appliances 45 Automobiles 45 Auto Repair 46 Food 46 Home Furnishings 46 Electronics 47 Business Equipment 47 Business Supplies 47 Business Services 48 Are You a Price Buyer or a Value Buyer? 48 Confirmation 48 Sales-Side Confirmation 51 Nature and Strategy 52 Know Others, Too 55 Evaluating and Recruiting Salespeople 57 Frustration 57 Wasted Training Dollars 58 Turnover 59 Matching Styles 60 Professional Management 60 Admired Companies 61 Sales Experience 61 Pricing Policy 61 Productivity 62 Outsourcing 62 The High Cost of Low Prices 63 Executive Summary 64 3 Elementary School Math: Quantifying Value 66 Value 66 Are Things as They Appear? 67 Are Customer Preferences Constantly Changing? 67 When Customer Preferences Change, Do Customers Expect the Price to Change? 68 What Customers Value 68 Calculating Value 71 Image 71 Innovation 79 Time Savings 82 Executive Summary 92 4 Customers' Delight: Discovering the Value 94 The Power of Discovery 94 What Your Prospect Values 95 The Degree of Interest 96 Little or No Interest 96 Some Interest 99 Genuine Interest 100 Your Ideal Prospect's Interest 100 Image 101 Innovation 105 Time Savings 110 Executive Summary 115 5 Icing on the Cake: Bundling for Greater Profits 116 What Bundling Can Do for Your Business 116 Sweetens the Deal for Your Customers 117 Increases Your Average Sale 117 Boosts Your Employees' Productivity 118 Reduces Your Risks 118 Creating Bundles: Examples and Exercises 119 Horse Trainer Example 119 Clothing Purchase Example 127 Computer Example 131 Consultant Example 136 Investment Advisory Example 141 Executive Summary 146 6 Avoiding No: Using Options to Close the Sale 148 Offering Options 149 Education 149 Budget Considerations 149 Delineating Options 150 Pricing the Options 157 Consulting Example: Value Calculation 158 Consulting Example: Price Calculation 161 Deciding to Sell Up or Down 162 Retail Product Sales: Home Theater Systems 164 Business Loans: Increasing the Close Rate 168 Executive Summary 180 7 Value as a Marketing Tool: Attracting the Right Buyers 181 Attracting the Right Buyers 182 Understanding the Value You Provide 182 Crafting Messages That Have Meaning for Your Buyers 183 Using Language That Conveys Your Value 186 Avoiding Price Language That Diminishes the Value You Provide 192 Creating an Effective Call to Action 193 Gaining Experience with Marketing Messages 194 Horse Trainer: Attracting the Right Buyers 194 Clothier: Attracting the Right Buyers 198 Executive Summary 202 8 The Value Trap: Avoiding the Pitfalls of Change 205 Identifying Pitfalls 205 Customer-Directed Change 206 Competitor-Directed Change 206 Self-Directed Change 207 Technology-Directed Change 209 Avoiding Pitfalls 210 Executive Summary 212 9 The Economy: It Just Doesn't Matter! 213 Why the Economy Doesn't Matter 213 The Right Way to Lower Prices 216 Executive Summary 217 10 Make More, Work Less 219 Bigger Isn't Better 219 Avoiding Price Competition 220 Executive Summary 221 Notes 222 Index 224 A 226 B 226 C 227 D 228 E 228 F 228 G 228 H 228 I 228 K 229 L 229 M 229 N 230 O 230 P 230 Q 231 R 231 S 231 T 232 U 232 V 232 W 232 Contents......Page 6 Acknowledgments......Page 12 Introduction......Page 16 Lost Revenues: Leaving Money on the Table......Page 19 Productivity Costs......Page 22 Wrong Customers......Page 25 Other Hidden Costs......Page 27 Quality Costs......Page 29 Subprime Mortgages......Page 32 WalMart......Page 33 The "Big Three" Automakers......Page 35 Our Lack of Name Awareness......Page 37 Our Customers Only Care About Price......Page 38 We'll Lose Market Share......Page 39 Executive Summary......Page 41 Selling Styles Mirror Buying Habits......Page 43 Know Thyself......Page 44 Automobiles......Page 45 Home Furnishings......Page 46 Business Supplies......Page 47 Confirmation......Page 48 Sales-Side Confirmation......Page 51 Nature and Strategy......Page 52 Know Others, Too......Page 55 Frustration......Page 57 Wasted Training Dollars......Page 58 Turnover......Page 59 Professional Management......Page 60 Pricing Policy......Page 61 Outsourcing......Page 62 The High Cost of Low Prices......Page 63 Executive Summary......Page 64 Value......Page 66 Are Customer Preferences Constantly Changing?......Page 67 What Customers Value......Page 68 Image......Page 71 Innovation......Page 79 Time Savings......Page 82 Executive Summary......Page 92 The Power of Discovery......Page 94 What Your Prospect Values......Page 95 Little or No Interest......Page 96 Some Interest......Page 99 Your Ideal Prospect's Interest......Page 100 Image......Page 101 Innovation......Page 105 Time Savings......Page 110 Executive Summary......Page 115 What Bundling Can Do for Your Business......Page 116 Increases Your Average Sale......Page 117 Reduces Your Risks......Page 118 Horse Trainer Example......Page 119 Clothing Purchase Example......Page 127 Computer Example......Page 131 Consultant Example......Page 136 Investment Advisory Example......Page 141 Executive Summary......Page 146 6 Avoiding No: Using Options to Close the Sale......Page 148 Budget Considerations......Page 149 Delineating Options......Page 150 Pricing the Options......Page 157 Consulting Example: Value Calculation......Page 158 Consulting Example: Price Calculation......Page 161 Deciding to Sell Up or Down......Page 162 Retail Product Sales: Home Theater Systems......Page 164 Business Loans: Increasing the Close Rate......Page 168 Executive Summary......Page 180 7 Value as a Marketing Tool: Attracting the Right Buyers......Page 181 Understanding the Value You Provide......Page 182 Crafting Messages That Have Meaning for Your Buyers......Page 183 Using Language That Conveys Your Value......Page 186 Avoiding Price Language That Diminishes the Value You Provide......Page 192 Creating an Effective Call to Action......Page 193 Horse Trainer: Attracting the Right Buyers......Page 194 Clothier: Attracting the Right Buyers......Page 198 Executive Summary......Page 202 Identifying Pitfalls......Page 205 Competitor-Directed Change......Page 206 Self-Directed Change......Page 207 Technology-Directed Change......Page 209 Avoiding Pitfalls......Page 210 Executive Summary......Page 212 Why the Economy Doesn't Matter......Page 213 The Right Way to Lower Prices......Page 216 Executive Summary......Page 217 Bigger Isn't Better......Page 219 Avoiding Price Competition......Page 220 Executive Summary......Page 221 Notes......Page 222 Index......Page 224 B......Page 226 C......Page 227 I......Page 228 M......Page 229 P......Page 230 S......Page 231 W......Page 232

pricing Is One Of The Most Essential, Yet Least Understood, Aspects Of Running A Profitable Business. Many Business Owners Treat Pricing As An Afterthought, Assigning A Hard Figure To A Vague Idea About What The Market Might Bear, Or They’ll Mimic Their Competitors’ Prices. But The Cost Of These Pricing Strategies Can Be More Than Just Lost Revenue—it Can Spell Financial Disaster.

 

pricing For Profit

Opens Your Eyes To The “high Cost Of Low Prices” And Equips You With The Knowledge And Confidence You Need To Charge More For Your Products Or Services By Focusing On Their Value. If You’re Offering Superior Value, You Can Charge A Higher-than-average Price That Will Drive Your Sales And Increase Your Profits. It’s The Small Business Owner’s Most Powerful Strategy For Making More Money With Less Effort! pricing For Profit Gives You The Tools You Need To Make It Happen, Including:

• Buyer Profiles To Help You Distinguish Between Price Buyers And Value Buyers, And Create A Profile Of Your Ideal Customer

• Formulas For Calculating The True Value Of Your Offerings

• Scripts For Helping Your Customers Discover That Value

• Bundling Strategies To Sweeten The Deal For Your Customers And Increase Your Profits

• Sample Marketing Messages That Communicate Value To Your Market, And Much More!

Furtwengler gives you the crucial number-crunching skills you need to determine your ideal price, looks at both the tangible and intangible elements that affect what people are will to pay, and gives you tips for tapping into the values and emotions that motivate people to pay more