If you want to increase your profits, focus on providing value in your Strategic Pricing®. Businesses aim to improve revenue. That is just the nature of business. Keep in mind that your customers do not care about your bottom line. They care about getting value and that can mean many things to them like meeting their goals, getting (their perception) more than the money they paid you for what they negotiated with you, and making their jobs easier. When you provide more for your customers than they thought they were going to get, you give them more value. They benefit from working with you and you benefit as well. Hopefully, it translates to more business and revenue. With each opportunity to increase revenue, you gain the potential to increase your profit margin whether that was your objective or not.
How You Improve Profitability?
How does this snowball for you in terms of increased profitability? The more value you give, the more you reap profitability rewards such as:
- more new opportunities and customers are drawn to you
- greater potential for converting current work into more for the same customer
- higher and better name recognition
- improved ability to compete with bigger competitors
- more opportunities to team with others who see you as a gem in the industry
- greater opportunities to be invited to bid when you had not planned on it
- more potential to be asked by customers who are new to you – that translates to market growth
Providing Value
Best of all, when you deliver value, you are tending to your own business. Funny, isn’t it? But minding your own business means that you are focused on delivering the best value you can. And then some. You have to focus on committing fully to delivering value. This is the most important thing you can do in making your efforts reap the highest profits. It does not come from driving your profit margins up without any other thought. It comes from the quality you give and how you deliver it. That is value.
For more reading about this subject see this article https://online.hbs.edu/blog/post/how-to-increase-profit-margin
