Stop on a Dime
Pick the right price point to pull in profits.
Forget about searching for that one perfect price for your product. Instead, says pricing expert Rafi Mohammed in The Art of Pricing (Crown Business, $25), aim to find approximately right prices for several of your major customer groups. Offer discounts to some; charge premiums to others. Bundle to create high-priced packages for those who value them; use bare-bones bargains to attract new customers. Urge employees to sell higher-profit items, and limit their ability to give price breaks.
If you've been consumed by cost control, consider thinking about pricing instead. Moham-med cites a cross-industry study where raising average prices by 1 percent meant 11 percent higher profits, while a 10 percent average price hike increased profits 100 percent. This conversational, easy and informative read is worth paying attention to.
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