Businesses would be better off raising rather than dropping their prices in this recession even if it loses them clients, an owner-manager adviser has recommended.
Enterprise gurus at Cranfield School of Management say a price hike is preferable for owner-managers who clearly convey what is distinctive about their product or service.
Despite pressure to reduce prices, business owners who defy expectations and put them up, while continually stating their unique selling point, tend to be better placed.
The price increase is preferable “even if means losing some of your customers,” as they are “probably the customers who don’t really value your distinctiveness at all”.
Moreover, it may even be that such clients are “costing you money to service them,” added Gerard Burke, of the school’s business, growth and development programme.
His advice for owner-managers to be “distinctive” in their offering, and “strong” in their decisions, such as shedding unprofitable customers, was aired in an online video.
Posted on the school’s website, the broadcast reveals six traits that winning companies typically exhibit during a slowdown in business and economic activities.
Alongside ‘strength’ and ‘distinctiveness’, the four other characteristics of firms that triumph in straitened times will be presented shortly at a series of free briefing events.
They are ‘control;’ ‘confidence;’ ‘readiness’ and ‘wisdom’ – with each quality said to be particularly noticeable in established, high-growth, ambitious companies.
The events are on June 4, 24, 15 at Cranfield’s Bedfordshire campus; June 10 and July 6 at the Institute of Directors’ headquarters in London, and on June 29 in Leeds.
May 28, 2009
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