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Testing
prices is a major source of surprise for many people. Different prices on
the same product often outperform one another by an enormous margin.
It's
not a matter of increasing prices — it's a matter of testing them. And
testing can be done imperceptibly.
One
consultant we know advised a business owner to increase his prices. The
owner did not welcome the idea at all.
Like
most business people, he rejected the idea as ridiculous. "I'll lose
all my customers," he said.
So
the consultant devised an interesting test. "Let's take the slow
moving items," he said. "They represent about 30 percent of your
$450,000 revenue. Let's test increasing the price of those items by just
10 percent. And, of course, let's measure the results."
The
result? No decrease in sales of slow moving product lines at all and an
extra $13,500 on the bottom line.
Of
course, the client would not have realized that gain had he not been game
to test.
Reluctance
to test is something you can expect to deal with — particularly when it
comes to testing prices.
But
deal with it by measurement.
Measure
the results you get for each incremental change.
And
remember, you're not committing to changing forever.
You're
simply committing to testing. |
