Raise Your Prices…And the Value You Provide

Our company likes a good bargain, and we are not alone. Entire organizations have been built using business models around the simple premise of selling products for less. With the economy continuing to lag, there remains considerable downward pressure on pricing.

I sometimes struggle with the notion that “cheaper is better.” We all know that’s not the case. More often than not, it’s about value for the dollar more so than the actual dollar figure. Can we provide more quality and value to our customers, making them more successful? Can that value give them the ability to survive even better in these times?

photo by speedM, Flickr

Think about a good steak, a fine bottle of wine or a comfortable pair of shoes. You usually get what you pay for. The same is true with performance and customer service. I feel if you treat customers fairly, and doing whatever is needed to get the job done correctly and on time, that can be more important than the bottom-line cost.

Make no mistake about it, I watch to keep our price in line with our competitors, but what we have always done is sell beyond the price. We sell value in our performance, which in turn helps our customers increase their bottom line.

I have found the following works for us in this regard:

Communicate regularly with your customer relationships. The best way to learn how to improve your customer service is to make sure they feel good about the relationship.

Shape your business to meet your customers’ needs and preferences. Ensure you are doing a better job than your competitors at satisfying the deliverables.

Bring the price you charge in line with the value you provide. Quantify your services to figure out the tangible value they bring to the customers, and then set your pricing in line with that value.

Obviously, nobody wants to overpay for a product or service. But folks will pay extra for a good product and quality service if it helps them. With the right performance pricing, you can keep your customers happy and raise your revenue in the process (which will help feed and provide for your team in the process). Everyone wins.


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Merrill Stewart is Founder and President of the Stewart Perry Company, a commercial building contractor based in Birmingham, Ala. Contact him via email.

Comments

  1. Another great post and timely at that.

    It seems our society has been conditioned to think in terms of pricing…and low pricing specifically. In the end, value per dollar is the measure we should and need to focus on. Selling on price alone is a race to the bottom. Inevitably marketing on low price leads to sacrifice in quality…which leads to dissatisfaction…and everyone loses.

    Your final point states the solution well:

    “Bring the price you charge in line with the value you provide. Quantify your services to figure out the tangible value they bring to the customers, and then set your pricing in line with that value.

    Obviously, nobody wants to overpay for a product or service. But folks will pay extra for a good product and quality service if it helps them. With the right performance pricing, you can keep your customers happy and raise your revenue in the process (which will help feed and provide for your team in the process).”

    Everyone wins.

    Thanks!

    • stewartperry1 says:

      We always look for ways to help make our customer more successful. In the process, to me, both seller and buyer will be more successful. In other
      words if we are allowed to intergrate more vertically into the process our customer wins and we get the oppertunity to increase the price or revenue
      because of the addtional value provided and the customer in turn gets more out of it as well. Merrill

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