When To increase Your Prices

Has it been a while since you increased your prices? When was the last time you evaluated your prices to check they are still relevant?

It’s a good idea to review your prices periodically – quarterly or bi-annually should be sufficient.

You should increase your prices if;

You’re experiencing excess demand

You can influence demand through increasing your prices. If you have too much demand make incremental price increases until supply meets demand.

Customer value is higher than price

If your customers place a high value on your products and services then you can afford to charge a little more and demand should be mostly unaffected. You can test ‘price elasticity’ by increasing prices and monitoring sales.

Costs have risen

If your costs have risen it is prudent to increase your prices to maintain your profit margin.

If you have good market share and want to maximise profit margins

If you have built good market share by keeping prices low then now might be the time to raise prices by a small amount to increase profit margins. You may experience some drop off in demand but you will be left with clients who are happy to pay for what you offer and more profit