The decision for increasing and lowering the price of any product or service is one of the most important factors for any business. But the important thing that matters a lot is to decide on how to bring about this change. Suppose, there are two companies and both are changing the price of a similar service or product by the same ratio will achieve diverse results and it is due to the implementation of the new change.
One factor on which an entrepreneur needs to pay attention is the timing while decreasing and raising the product price. It means you should know how to make an impact on the perception of the customers. For this, you need to do careful study and foretell the reactions from the end of your competitors in an accurate manner.
What do you need to consider before lowering or raising prices?
Before making any decision of price change, you should consider its effect on the profit of your business.
Two main questions that you have to analyze:
- What impact will be created on the profit per sale?
- What impact will be observed on the sales volume?
With the rise in price, your business profitability can improve in the case your volume of sales is going down. If you have decided to raise the price of any product, then make sure to explain this to your customers that why have you decided. By giving the best explanation, you can create a strong bond with your customers.
If it is possible, then always avoid deciding about the decreasing of the product price as it goes in parallel with the bad quality service. And, this kind of image is not acceptable by any entrepreneur. Focus on generating profits instead of lowering the prices for increasing sales.
Here is an example through which you can understand clearly:
Now, we are going to talk about a leading entrepreneur Edmond Masjedi, who runs a famous frozen dessert brand SnoBar. In this, a wide variety of cocktails are available in the premium quality but you want to know about the price. Well, it is affordable as their main concentration is on providing the unmatched quality to their customers and offering them maximum satisfaction.
This businessman knows about all the strategies of business and it does not matter from what it is related to. The main thing is that he implements them in the best manner so that whatever business he is doing, it can go on a greater height in the whole world.