Testing Your Price Ranges

Vince DiCecco is a dynamic and sought-after seminar speaker and author, with particular interest in business management/development and marketing subjects. With over 20 years experience in sales, marketing and training, he is presently an independent consultant to businesses looking to sharpen their competitive edge. Vince addresses a wide range of topics focused on nurturing customer loyalty while improving profitability. He may be reached via email at vince@ypbt.com.

First, accept that you will have trouble determining “all the market can bear” until you’ve actually gone to market and sold something. Periodically, don’t be afraid to raise prices to test the waters. Have you ever, mistakenly, overcharged a customer for an order, only to find the error after the invoice had been paid? The customer never challenged the price, but instead gladly paid you.

I’m not saying such a mistake should go uncorrected, but it should teach you something. In an indirect way, you have just tested the market for all that it could bear. Of course, a “test” with a sample size of one does not mean you should immediately raise your prices. Still, it is an indicator that you may be able to fetch a better price on some products — particularly promotional products that historically do not command premium prices. 

Perhaps a more likely example is when a prospect asks you for a quote, pauses, and then leaves saying, “Let me think about it. I’ll be back.” Sure enough, two weeks later that same prospect returns and places the order. He might say, “You know, I checked other places, and this is the best deal.” You should interpret that as — for that combination of quality, service, and delivery and quantity — there are others out there selling it for more. —Vince DiCecco, Your Personal Business Trainer