Who’s controlling your business’s destiny? Here are some simple questions to assess how much control you have over your business.
- Who dictates the pricing in your business, you or your customers?
- How frequently do you monitor your competitors’ pricing?
- How do you use your knowledge of competitors’ pricing?
- Who is more likely to initiate a price increase, you or your competitors?
Recently I met the CEO of a staffing firm. He asked what I did. When I told him he said, “That’s great if you’re in an industry where you control your pricing. Our customers dictate our pricing.”
Obviously this man is not in control of his destiny. Sadder yet is the fact that he doesn’t respect himself. The reality is that we can’t expect others to respect (and value) us if we don’t respect (value) ourselves.
If you find that you’re regularly caving to customers’ price demands, discover your value. Get help if you must, but find that value. Until you learn to say “No” to those who don’t value what you offer, you’ll never master your destiny.
How much time do you spend monitoring competitors’ pricing? My experience is that there is a direct correlation between the amount of time a company spends monitoring its competitors’ pricing and how reactive their pricing is. Why?
The intense focus on pricing makes it the focal point in leadership’s mind; inevitably, the value perspective gets lost. I’m not suggesting that you be ignorant of your competitors’ pricing, but don’t let that knowledge dictate your pricing.
Using competitors’ pricing
Understanding how you respond to competitors’ price changes will help you assess the mastery you have over your destiny. These questions will help you make that assessment:
- Do drops in their pricing cause you to respond in kind or, worse yet, with ever greater discounts?
- Does their pricing cause you to be reactive instead of proactive?
- Does your mind go to “I have to lower prices to retain market share.” or “They must be struggling to lower prices so dramatically.”?
When a competitor drops his/her price, it should trigger the thought “How do I capitalize on this price move to demonstrate the value of our offerings over theirs?” In other words, what is their customer giving up to get the lower price?
Initiating price increases
If you’re not the industry leader when it comes to pricing, you have no control over your own destiny. Interestingly many of your competitors are praying for someone to be bold enough to raise prices so that they can raise theirs as well.
Know your ideal customer profile, what it is they value and how much they value it and you’ll be very confident in initiating price increases. You’ll be in control of your own destiny and the envy of your industry.
If you’d like to increase your prices, profits and customer base, call Dale at 314-707-3771.