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.
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