3 Times You Should Look at Your Pricing

When is it time to look at what you are charging for your products or services?
First, review it annually. Why? In a word – inflation. Every year the value of the dollar changes. In a good year the inflation rate is 2 — 3%. In tough years it can be 12-15%. For every 1% the inflation rate rises, your dollar looses that percent in value. Let’s say you charge $100. If the inflation rate was 5% and you again charge $100 it’s only worth $95 in buying power in the new year. At a minimum you should consider adjusting your prices every year or two in response to inflation.

Another time to check your rates is when people are complaining too much or not enough. The rule of thumb is that about 20% of your prospects should complain. Too few complaints may indicate that you are priced to low. Too many complaints may mean you are overpriced for the market you are targeting.

A third key time to look at your pricing is in response to the economy. In a down economy such as we have been experiencing you may have to shift to a survival mode, cut costs and lower prices to capture more market or add more value to existing packages to entice reluctant customers. As the economy recovers, as it is now, you can begin to raise prices back up again.

I [put several strategies in place over the last two years.  I stopped charging for an initial assessment and offered it at no charge.  I offered three hours of service for the price of two.  As the econonomy improves these programs will come to an end.

What did you have to do with your pricing or service packages to keep business moving? Are you coming out of this downturn with more clients than you had going in or fewer?

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