If your competitors prices are below, and close to, the perceived value and yours are still lower your revenues may benefit but you re giving away unnecessary margins. Not raising prices is one of the costliest errors in business. If someone offered you a sure-fire way to double your profits, you d jump at the chance. And if you knew that a 10-percent price increase would double your profit margin, you d undoubtedly go for it. Doubling their margins is exactly what would happen if the typical U.S. business raised its prices 10 percent.
Right pricing can dramatically improve profit margins for minimal cost.
Companies may be timid about raising prices for fear customers will look elsewhere. But if the new price is in line with buyers perceptions of its value, such fears are unwarranted. If the time is right, you have nothing to lose and everything to gain.