As well as lowering prices during the economic crisis, many businesses had their pricing structure incorrect to start with. They were providing too much value at too little cost, which resulted in slim profit margins.
(PRWEB) September 27, 2012
In a recent survey of 500 small businesses it was found that 58% still stated they were struggling in the current economy. Samuel Junghenn founder of Web marketing company Think Big Online says one of the major reasons businesses struggle is they don’t charge enough.
“When the economy tightened up businesses dropped their prices in an effort to stimulate new business. Unfortunately this led to a drop in the profitability of those businesses and the economy hasn’t strengthened enough to rise prices again. As such small businesses are struggling, but they shouldn’t have to if they can get the value equation correct.” Said Samuel Junghenn of Think Big Online.
When a consumer makes a decision on whether to buy a product or service they generally weigh up the cost of the acquisition against the perceived benefit. If a business can clearly show that the cost of acquisition is lower then the perceived benefits then a purchase occurs.
Business owners focus too much on the cost of their product or service and not enough on the benefit. By focusing marketing efforts on the benefit of the product businesses can overcome tough financial periods.
“As well as lowering prices during the economic crisis many businesses had their pricing structure incorrect to start with. They were providing too much value at too little cost, which resulted in slim profit margins. A business owner needs to understand their value and ensure they charge for it and get the maximum profit.” Said Mr Junghenn.
If you’re struggling during this economic crisis or would like some advice on how to set your pricing then you can contact Samuel Junghenn at: http://www.ThinkBigOnline.com