Nothing has a greater impact on your profit margin than getting your prices right, or wrong! Raising your prices by just a few percentage points can have a dramatic positive effect. And raising prices is often much easier than finding and winning more customers. Knowing this I am often surprised at how little effort is applied trying to find ways to raise prices. To me, this search is vital. I always want to discover what I call Perfect Prices - the highest price your Customer will pay and still feel that they're getting great value.
Now I know that you will think that you're already getting the highest price you can. You're in a competitive market and you're fighting to win your business. You have very clued-in customers who know the market rates. And your profit margins are good. What's the the problem?
Well let me say that I was in the same position, I've been there. But I was wrong. It took a while to dawn upon me. But I was most definitely wrong, and when I embraced that fact and worked with my team we realised some dramatic results. We were able to increase our prices AND increase our sales AND increase customer satisfaction. That's the holy trinity for successful business.
So I'd like you to ask yourself. Do you know all your customers really well? Are your sales people motivated to avoid giving a discount? Are they motivated, and skilled, at finding ways to add value and increase the rental rate? Do you avoid offering a fixed price list even for your largest Customers? Do you instantly and dynamically vary your prices based upon your stock and demand? Do you program and plan future pricing variations based on upcoming holidays/events/occasions? Do you understand why your Customer chose you and how likely they are to recommend you to others? If you answered 'Yes' to all of these, Bravo you're starting a better place than I was. But I have more questions.
When I was working through this with my team we were stumbling in the dark; unsure of the next steps. But you don't need to be. Just see my upcoming posts on Personas, Value Add, Sales Motivation, Commissions, Marketing and Fleet Management. These all intersect at pricing and result in Perfect Prices and higher profits.