When you quote a potential customer for your product or service, either verbally or in writing, you’ll lose some business on price. You may not always know whether price was the issue. But suppose you could find that out, what proportion do you WANT to lose? Your first thought is probably “Zero of course!” but […]
You need to be losing 50% – 75% on price! Here’s proof
Here’s a very simple spreadsheet showing that as you put your price up the quantity sold drops off in an exponential way (the red line) Your turnover (or income) is price x quantity sold – the green line Your cost depends on how many you sell (the purple line) Your profit is turnover (income) minus […]
Three pricing charts for you to use
You might want to print these off – or bookmark this page for future reference. And make sure your sales people see this first chart before they give a discount!! for example, if you are making 5% profit and you give a price discount of 3%, you’ve got to sell an extra 130% to make […]
Think of it as a test
Putting up your price is scary, and you probably WILL lose some customers, although I bet you lose fewer than you expect. (And as we’ve discussed earlier, you may well make more turnover, more profit, or at least a better quality of life by doing this) But is IS a bit horrible when a customer […]
Pricing – how to work out what to charge
It’s easy to set your price so that you don’t lose any customers. But will this give you the maximum profit? Here’s a graph to help you think about it If we line up all our customers in order of how much they will pay (even though we’ll never know this for sure!) let’s imagine […]