🍦 Your obligation to review your pricing

Hey friend —

Profits are one of the most important aspects of running a business. It can impact what you can (or can't) do within your business. Whether you can afford the lifestyle you want, remunerate your employees well or have the right products, systems and software within your business.

There are three ways to increase your profit.

1. Lower your costs

2. Increase efficiency

3. Increase turnover

Lowering costs is usually a non-starter. You see, on paper, it's simple. Lower costs, keep revenue the same = profits increase. That said, it rarely works like that. Usually, once the business starts cutting costs, they are seldom around in 12 months.

Sometimes, you need to spend money to make money, and stripping back costs leads to you juggling more tasks and responsibilities, fewer efficiencies, and your turnover will suffer. I'm all for removing the subscriptions or products you don't use, but too often, only so much can be cut down.

With efficiency, this is a great option to increase. Still, you will usually need the systems, the team, the processes and the tools to allow you and your team to scale

and build a well-oiled, efficient business - allowing you to get more done in the same amount of time so your capacity increases. This is more like what to do next when you feel ready to scale rather than a first step. The foundation needs to be solid before this step happens.

So, increasing turnover - we're left with the last one, which has two options when you break it down. You either win new customers or you increase revenue from your existing customers.

Winning new customers is a more challenging task, and there's always the saying that your best customer to sell to is the one you already have.

They've already placed their trust in you. They've already had the experience with you; there's room to add more value.

This isn't to say just go and overcharge everyone. There are two things to ensure with your current clients;

1. That they are being charged the correct price for the value and service/product that you provide

2. They are getting all the services/products they need or fit within their budget.

You need to ensure that your pricing is reflective of your business today. Not three years ago.

This impacts your ability to invest in your systems.

This impacts your ability to ensure your team are on great packages that represent the value they bring.

It is the lifeblood that will allow your business to grow and thrive so you can continue to invest and deliver an excellent service or product.

Pricing should be ethical, fair and transparent.

• Not based on psychology, scare tactics or FOMO (fear of missing out)

• Fair for both parties that you're receiving a great price and can deliver an excellent service/product

• Clear and transparent so that two identical customers with identical issues and sizes should have the same price. Breaking down how your pricing works so there's no ambiguity.

This will help you to stand by your pricing. In the future, we'll cover pricing techniques, how to face rejection, handling discounts, etc.

At Cone, we practice this using GoProposal, which helps us standardise our pricing. It removes the emotion from pricing and instead leaves it to deal with the facts. How big is the client, and what support is required? What services do they need? What goals are they trying to achieve, and how can we help? This is what our discovery calls are for, so we can create a proposal that aligns the pricing with their needs.

I'll leave you with three questions to ponder;

When was the last time that you reviewed your pricing?
Do you feel like you are charging your value?
Could you be more transparent with your product or service?

Written and edited by Ben Nacca