10 Common Pricing Mistakes ….

What a great topic….with today’s upward pressures on the prices of many commodities…and the continued devaluation of the dollar all but assuring us of an inflationary period on the horizon.

I just received and read a white paper on the 10  Common Mistakes that Companies make in pricing their products and services by Dennis Brown….with contributions from others….and yes, as

always I am adding my comments.    It is a good thought provoker as “Price Strategy” in volatile economic times can not only impact your bottom line…but the viability of your company!
Mistake #1 )  Basing your PRICE purely on your COST… without consideration of the Customers Perception of VALUE.   Costs should ONLY be considered for the LOWER BOUNDRY of your PRICE!  VALUE should set the UPPER limit and your regular business transactions will find a median in between…..but do NOT base price completely on COST.  You can’t win that game!

Mistake # 2)  Basing your price on the “marketplace”  …or the collective judgement of the value.  If you use this method…you will be asking for and accepting the commoditization of your product.

Mistake # 3 ) Maintaining what YOU feel is a fair margin across ALL product and service lines.  That simply is unrealistic and dangerous…you will lose some product lines all together as you will be priced out of the market….and others you will be selling for too little…. This is further complicated by the fact that you should have “different prices” for different customers….one size does NOT fit all.

Mistake # 4)  As above ….the last sentance….”one price does NOT fit all”  do not FAIL to segment your customers and their respective pricing levels.  You must consider the factors of EACH customer.

Mistake # 5)  Holding prices …no matter what….even if costs go up or down…or clients change in size or ability to pay.  Educate your clients about the market…prepare them for price increases by sharing the information….it makes accepting the increase much easier if they have seen the documentation for months showing the raw material increases.

Mistake # 6 )  Incentify  your sales force on REVENUE and not CONTRIBUTION!   If you do NOT base your commission plans on CONTRIBUTION…you can quickly grow yourself BANKRUPT with a couple of superstar reps!

Mistake # 7 )  Changing prices without any consideration of what the competition is doing.  If you find yourself raising prices just as your competitor rolls out a major discount….well..you can understand your customers reactions.

Mistake # 8 )  Spending insufficient resources managing your pricing.  Don’t get caught in the “set it and forget it” program…. you must have several sets of eyes working with pricing…estblishing, checking and verifying.  Use HARD DATA from the field and from professional resources.

Mistake # 9 )  Failing to establish internal procedures to optimize prices.  A hastily called “price meeting” is a great way to lose money.  Discipline your approach, research, review, prepare and then provide the data and analysis to support the pricing you institute.

Mistake # 10 )  Spending most of your time servicing your least profitable customers.  Why does this happen?  But we all fall victim to it….it is probably our insisting to ourselves that we can “turn it around” over time….but really what ends up happening is that we get RAN OVER time after time.  Know when to fold um…..

And the BONUS # 11….Don’t only rely on your sales force and customer service people to provide you with the VALUE PERCEPTION of your clients.  Customers simply will NOT BE FULLY HONEST with their reps….they LIKE THEM..and as such will “sugar coat” ….. Employ a  trained professional or organization to establish these values from time to time.  The VALUE to you and your organization will be multiplied many times over.  You will get the REAL STORY!

With the above considerations when you are working with prices are included and implemented, your “pricing strategy” will be far more PROFITABLE and VIABLE over the long-term
Ok that is it for this week….Havea  wonderful rest of the weekend….  till next time !

Euby

Love and giving someone what they want…..or need…or both….

It has always amazed me how things come together almost magically from various sources once we adopt a theme for our annual kick off….and this year was no different.

Suncoast prides itself on our customer service and showing our customers and prospects the “love” of the Suncoast team…so this year we  are going

with LOVE as our annual theme…we even have added a “heart” into the SMI logo for this year!  Look for it around….we will be featuring it all year !

With that backdrop… we have regular email news letters from Ross Barker of Quantum software and this months featured his thoughts on “Love Conquers All”……and how “love makes the word go around” ….great old saying that you do not hear as much today !  Ross broke LOVE down as:      L = Leadership        O = opportunism       V = Vision       E = Effort      Makes a lot of sense when you think about it…. all are required to show love either in personal or professional endeavors…As Euby has always said…there is really not a huge difference in the process and implementation of LOVE between personal and professional …just in the perception of the two.  Ross finished by quoting the late great Roberto Clemente who died in an effort to get relief supplies to the Carribean…..”Anytime you have a oportunity to make a difference in the world and you don’t, then you are wasting your time on this earth” !  Thanks Ross….great quote!

That was followed by Bruce Cameron of Frontline Marketing and his news letter “Sparks Fly”!  His writings were on “Giving someone what they want…is the best thing you can give them.” !  However, discovering what they really want can be difficult and even tricky. It may appear too easy …so easy in fact you might dismiss it.  But to really give people what they want you must find the Lowest Common Denominator….for most that is KINDNESS….and if you search for the LCD of Kindness it is awareness.  The state where we are conscience of events and able to perceive and to feel what they want.  You do not have to agree with them or even understand them…but you are inclusive of them, and their ideas, thoughts and beliefs.  It is inclusion in another’s reality.  Your ability to share that genuine kindness elicits a positive feeling in others.

Turning that “personal kindness” into “marketing kindness” can be tricky ( ok …you knew I would get around to this business application side ) but it can be done.  Studies show over and over that people buy because of a “feeling” that they develop for a product or service.  It is the positive emotional link that activates the buying response.   Do not lose sight of “love” and “kindness” in business….. it is your ally in building your business…not a sign of weakness.  Tenderness and Kindness are not signs of weakness and despair, but manifestations of strength and resolution.  kindness creates Love !   Make it a “success” resolution in 2013 to show more kindness….and “feel the love” it generates!

Till next time…. wishing you “all the best” in 2013 and beyond….        Euby

 

Voice Mail that will HELP you sell ! ( or get your calls returned….the selling is then up to you of course ! )

 

Good Tuesday morning !

I just finished a great read in Print Professionals July edition…. by Kelley Robertson on Voice Mail….THAT SELLS….

 

We are all faced with the “lack of response” to our voice mails….and just possibly,  it

is…….as the old Jimmy Buffett song so eloquently  states….”our own darn fault”….!!

 

Take a moment and review these 5 quick tips that Kelley pointed out…and of course

I made my own observations on afterwards ( don’t I always! )

 

1)       The message must have focus and clarity !  Don’t sound “surprised” to get

their voice mail….don’t you most often???  Keep brief and to the point ! They

are too busy to hear you drone on and on!  ( YES I know……I am guilty as charged!! )

 

2)       Do not make the message difficult to understand.  SLOW down… if you have a

heavy accent… try to speak as “generically as possible”….repeat yourself on the

important points of information …..especially your call back number.

 

3)       Do not leave your contact information as a “lightening round”…SLOW down and

leave your contact information clearly and REPEAT your number and / or email  a

second time to make it easy for them to write it down accurately.

 

4)       Leave a HOOK to get them to call back……a compelling reason…..NOT “hay if

you need something give me a call”….say “I have some very interesting news  to share

with you about……”

 

5)       Do NOT be generic…be SPECIFIC…again they are too busy to “guess” what

you are calling about….or if they really have a reason to call you back!

 

Sounds pretty simple…right?   Good luck….you might want to “practice a couple of

times” before you call….. and don’t be afraid to follow the prompts, delete and start

over. That is what it is there for….

 

Remember…technology will NEVER replace people, we all still need that “human

touch”….but people who embrace and use technology  PROPERLY will replace

those that do not!

 

That is it for now….thought it was worth sharing…  Have an outstandingly

successful week !

 

Randy  aka “Euby”

 

4 th of July and our business freedom….

Happy “Almost” 4 th of July !

I recently read an article on “Quick Tips to improve your small business” at the about.com website.  As I read the 10 points …and thought about small business in the US and how it is the major engine of our economy…my thoughts turned to our freedom to have a private small business and how many recent events have impacted them.

Not only have we had to contend with the longest protracted recession since the great depression….we have also had to withstand increased taxes to offset the governments loss of income due to the economic downturn,  heavily increased regulations,  a “health care overhaul” that looms over all of us as we “learn” how much it will cost small businesses down the road ( not to mention the army of new IRS agents being trained to implement and enforce it ) and an ever-increasing international competition on every business front!  And while many people missed this headling…Euby did not…even with it being buried on the back pages of the news…our current administration is reviewing the “elimination of the Small Business Administration” as an independent department and folding it into another department !

The purpose of my blog today is not intended to sound “politically charged” in favor of any party…..but in favor of the “Small Business Party”!  When I see our freedom to run our small businesses being attacked…and even taken away….my level of concern rises….and the week we celebrate our Independence Day in this great country of ours felt like the “right time” to voice those concerns.  I trust you will share my concern when you review the “hits” the small business person has taken the last 3-4 years…and the others that are pending in the months and years to come.

I think it is time we spoke up as small business citizens….and I will start now by forwarding this blog to my senators and representatives as I wish them a Happy and Safe 4 th of July and polity remind them it is “Independence” we are celebrating….and not “interference” !

Have a Happy and Safe 4 th of July !

Euby

P.S.  The 10 tips were 1) Keep scores of your financial performance   2) Set Goals and rate your performance  3)  Use HIGH impact marketing ( love this one ) 4 ) Master your presentations before presenting  5)  Monitor trends and adjust as needed  6)  Sharpen your SALES SKILLS  ( love this one even more )   7)  Find your BEST PRACTICES and LIVE THEM   8)  Motivate your staff…show them the love !  9)  Know your limits and don’t over step    10)  Take a break….you need it !  ( I am writing this blog from Cocoa Beach !  so I got this one !