More Margin! More Profit!
This BDM is so named because in our experience too many business people fail to appropriately pass on price increases and thus see their margin and profits evaporate. It’s also our experience that when owner/managers do increase prices, they invariably experience the following:
- Very little customer comment about the price increase
- No customer loss due to the price increase
- The absolute simplicity of implementation
Perhaps there is one other telling comment which clients have made after they have successfully been pushed into implementing a price increase: “I just don’t know why I was so worried about the impact of the price increase. I wish I had been more forthright with prices years ago… instead of absorbing the supplier increases. It’s all about price justification.”
The purpose of this BDM is to
- Explain the logic and basic business commonsense of increasing prices to cover CPI and supplier price increases.
- Explain the damage which discounting does to net profits.
- Encourage owner/managers to immediately consider the possibility of increasing prices of goods/services in order to “claw back” lost margin.
- Dispel the commonly held misunderstandings which owner/managers harbour as to why they cannot easily increase prices.
Increased prices = Increased profits and cash