Pricing is about so much more than creating revenue.

Work Smart Not Hard Tip No. 53 in a series written for Indie Cambs

When you examine your business and decide you need more profit, one of the easiest ways to do this is to increase prices. This usually brings up the issue that a price increase may drive away customers.

Most small, independent businesses don’t sell on price. We don’t advertise our goods or services as the cheapest or best value in the market. Our customers aren’t looking for the lowest price, and as long as they are satisfied that they get good value overall, a price increase doesn’t usually put them off. Sometimes, the perception of value that higher prices creates will attract people who like the association with quality, exclusiveness and reliability.

Sometimes it works in a different way. A barber shop close to where I live has been advertising free back-to-school haircuts for boys whose parents are struggling with all the other expenses they need to meet and the effect on their business has been dramatic. Lots of regular customers are adding extra tips to help the owner cover the cost of the free haircuts because they really like what he’s doing. He hasn’t put his prices up to cover the extra costs, his customers are doing that for him.

This is a different take on how businesses make their customers feel special by association.

When you create more profit it means that instead of trying to save money, cut corners and use cheaper ways to deliver, you can add a little extra. Charging more gives you room to create delight – and that is what customers talk about and encourages them to recommend you.

Using your time in the most efficient way to make more profit means you can invest in your business, donate to charities, and do more of the things that made you start a business in the first place.

Sometimes the way to attract more customers and make more profit are not the most obvious. Yes, some people are struggling to make ends meet but overall there is no lack of money in the world. Our job as business owners is to get creative in how we attract the people with money to spare and then we have a choice about how we help other people. That’s a power worth having. Just making ends meet because you’re undercharging restricts all of your choices.

Money is an emotive subject for a lot of people but it’s essential to get pricing right for whatever type of business you want to build. If you have any issues with this please get in touch and we can talk about it!