In the February issue of Inc. Magazine, an article entitled "Flexing Your Pricing Muscles" asserts that many businesses may be able to raise their prices without losing a significant number of customers. They quote statistics that a growing number of companies are raising their prices – which represents a change from the recent past. The article uses an upscale New York City health club as an example: the club was charging less than competitors despite offering a comparable experience. When they raised prices (by 16 to 20 percent), no one complained and membership numbers remained steady.

On the other hand, after a long period of virtually no inflation, customers are used to getting a bargain. And companies that raise prices risk giving their competitors an advantage.

So what should you do? The article doesn’t say, but we believe we have the answer. It’s important to remember that price is not necessarily the most important factor in the decision to buy. Rather, when customers don’t have any other information to help them make a purchase decision, they go for the lowest price. You disagree? "Customers always shop price," you say? If that were the case, then every car on the road would be a Hyundai!

Companies need to uncover customers’ "hot buttons" – the things that are important to them in making a purchase decision – and then craft marketing communications that address those points. Once a customer understands that your product or service is right for them, they may even expect to pay more than they pay for the competition.

We can conduct the research to find your customers’ hot buttons.   Call us at (818) 752-7210 to uncover ways you can increase your company’s profits.

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