A Higher Price: Your Competitive Edgee

Whether you are an exporter or you are competing with a vendor across the street your competitive edge, contrary to popular belief, is a higher price.

If you’ve ever built a sandcastle and helplessly watched the incoming tide lap at the walls and turrets until they crumble, you understand how an exporter feels as her country’s currency inches upward in value. You can empathize with a company battling competitors for whom price is never low enough. If low price is the primary attraction to your product or service, what’s holding up your castle?

Price, over everything else, determines:

your company’s perspective and its physicality.
the quality of what you sell and your level of after sale support.
the level of value your customers perceive and receive.
who your customers are and how they treat you.
how you treat your employees, employee turnover and their loyalty to you.
how you treat your suppliers and how they respond to you.
your profit margin, stress and longevity (yours and your company’s).
your outlook on life.

Lower your prices and these attributes suffer. Raise your prices (above the market average) and watch these attributes, your volume of business, relationships with your customers, suppliers and your bank surge. Market on the basis of low price and a miserly dynamic pervades, exuded like pheromones, attracting miserly, cynical clients. Your lowered price challenges your competitors to do the same, further devaluing your industry in the eyes of your market. Raise your price and suddenly your traditional competitors evaporate. When was the last time you laid awake nights worried that your competitor might raise his prices?

The point of raising prices is not more cash in your jeans. Raised prices become the generator of a new financial energy that permits you to do more for your customers – adding value – making the experience of doing business with you a sensation they (your customers) can’t get enough of.

So … do you raise your price-point tomorrow and sit back and wait for the telephone to ring? It’s not that simple, that’s why so few do it. Raising prices demands a strategy and the answers to these questions:

Who would I like my clients to be?
What more can I do for these clients?
What added value would they appreciate?
How many more customers can I comfortably serve?
What more can I do for my suppliers?
No … you haven’t misread the final question.

Give it careful thought. The inspiration behind this last question, if embraced, is the secret.