How To Unlock Higher Profits by Pivoting Your Pricing Model

Saturday, December 09, 2023

Ever felt like your pricing model just doesn’t resonate with your market? I've been there, and here's how I paved a way out.

When I started my restaurant call center business, I initially pitched an hourly pricing model. And the feedback wasn’t great. No one bought it. The perception from the market was handing restaurants another expense on their P&L. The aha moment came when I recognized the need to come up with a pricing structure that resonated with the restaurant industry. I decided to adopt a per-order model because that’s how restaurants wanted it priced and thought about it for other offers. So I did some math and started, pricing it at $2.50 per order. This shift was not just a change in numbers; it completely changed our positioning as an ROI service instead of an expense service. Restaurants started seeing us in the same light as they viewed platforms like Uber Eats or DoorDash. I learned form this that packaging and positioning your pricing on a consumption basis that can provide is an ROI is a much better strategy.. Rather than letting clients view it as another cost, it's about making you offer resonate as an investment with an ROI. You have to truly understand and communicate in your customer's language especially in today’s economy. Now if you want to learn how to test new ways to position your pricing here’s the steps. You want to use first principles.

Deep Dive into Your Market: Ask yourself why your pricing model isn’t resonating?

Brainstorm New Models: Ask yourself other pricing models that you can apply that could make you the same or more money. For example a per transaction model or a tiered pricing model.

Do The Math. Run the numbers and see if it would be profitable

Test itTrial and Feedback: Roll out your new pricing model to a couple of potential clients and see how they react.

Implement and Prosper: Once you’ve got something that resonates, standardize it.

If you want more help on coming up with a pricing strategy then grab my free cheat sheet at the link below that will help you reshape your business model and position your offer as an ROI rather than an expense.

Get The Art of The Enterprise Sale Book

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