Pricing Is The Problem

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The company has an outstanding product. The delivery is superior and even adds a twist to accommodate customers.

But. . . They are having a profitability problem. Net income is anemic.

Reviewing the business operation the answer jumps out. They are pricing the product based on the competition – not on the value they are delivering. My advice - Raise prices 25%.

The owner is concerned that business will walk. An analysis shows the hole will only get deeper. With trepidation the price is raised.

As the dust settles, 98% of the customers remain. Many who stayed said they are happy with the service even at the new price.

Bottom Line?

When price reflects the value to the customer it’s a win-win

Jim is an expert business coach and a respected advisor management and financial executives. He draws on his long-term business leadership background to help CEOs grow revenue, increase profits, improve performance.   

Jim’s Musings - Contemplating the Tea Kettle

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Here the teakettle sits on the stovetop polished to a gleaming reflection. But it’s lonely. No one pays any attention to it. It sits unused as a relic from the past.

In current day life when hot water is required the microwave (right above the kettle) heats whatever is needed in less time and using less energy. Yet the kettle remains more out of habit than necessity, perhaps reminiscent of earlier more relaxed days when life was slower.

But now there is little need for the kettle. Yet it occupies valuable space and in fact is put aside many times as the need for more usable utensils are pressed into service. It would be more efficient if the kettle were stored in the attic or garage rather than cluttering up the workspace.

As I survey my surroundings I wonder how many teakettles I have:

·      There is that paper calendar that I print out faithfully every Friday to plan the next week’s work and never thought of again while I consult the calendar on my laptop or iPhone.

·      ·Of course there is the desk clock that I check daily to ensure it is maintaining the same time as the computer.

·      ·How about that software long forgotten and unused

·      Then there’s the old PC that’s creaky and only used because it houses historical Quick Books info

·      Side by side with the PC is the printer that only works with the old PC

Some day I’ll put that teakettle in the attic. . .

Jim is an expert business coach and a respected advisor to management and financial executives. He draws on his long-term business leadership background to help CEOs grow revenue, increase profits, improve performance.   

What’s the distinction between Vision and Goals?

 Vision -in a strategic plan is a crystal clear picture that provides strategic direction of where you want your company to be in the future.  

Crystal Clear - "In three years we are the company's top producing region” – with that focus there’s no doubt where they’re headed. (Notice I said “are” not “will be” – more on that later)

No marshmallows -  "to attract customers we will offer superior service"- you’re doing What to attract Whom?

 Goals - Are the action plan of specific accomplishments that fulfills the vision.

Specific Accomplishment – “We will increase sales to Fortune 500 companies 10% each year for the next three years.” That provides sustainable growth.

Marshmallow - "we will raise our sights to improve market share". Really! What does that mean or accomplish?

Any company that has a definite objective and has thought through the means to achieve it is well on the way to success.

Jim is an expert business coach and a respected advisor to management and financial executives. He draws on his long-term business leadership background to help CEOs grow revenue, increase profits, improve performance.