Howe Marketing Consultants

Let Craig Williams and Neil Howe help you finally get taken SERIOUSLY in your market!

The Number One Thing You Can Do To Increase Profits Is….?

March 11th, 2014

 

There are many things you can do in your business to increase profits like, sell profitsmore stuff, improve your marketing funnel, increase conversions, generate more traffic – these things are all the process and are the least effective in generating more profit for your business.

 

This is where the vast majority of businesses spend their time and money. It is where you are competing with your competitors over price of service as well as price of advertising on PPC (pay-per-click) SEO and marketing.

But, it is NOT the best place to start.

There is something much quicker and easier that you can do to increase profit.

 

The fastest thing to affect the bottom line is PRICE!

Get more money for the same sale.

Think about it. If all things remain the same and you doubled your price, you would more than double your profits.

So, price is worth working on.

 

There are three things you can do to control the price.

 

First, is Supply and Demand. Think of the gold market. the value goes up and down. If there is a demand for gold, then the value of it increases. If there is no demand, then the value falls.

How does this relate to your service? Is there a demand for your service?

 

Let’s move on to number two and three because these are the really big ones that you can control.

 

Second, we have Positioning and third we have Value. So, let’s look at these closer to see what we can do to increase the price of your service.

 

The Value equation goes like this:

Practical Value (PV) + Intrinsic Value (IV) = Total Perceived Value (TPV)

 

Let’s look at them deeper to determine why this is.

 

Practical value is the thing that your stuff does. If you have a car, it gets you from A to B

Intrinsic value is the unseen perceived value that is created mainly by positioning and promotion.

You add these together and you get the Total Perceived Value

 

When you understand this, you will see that the money is in the intrinsic value.

 

Let me explain.

 

Let’s consider the practical value of a car.

It gets you from A to B faster than walking. It keeps the rain off you in bad weather. You don’t have to take the bus. You can put your stuff in it.

These are all practical values.

Let’s look a little closer at the higher spectrum of cars.

We have a BMW 750. A luxury car for many at a price of maybe just shy of $100,000.BMW_750Li_2008_Dub_Dirty_Dog_Wheels

What’s the practical value of this car?

Well, it is very well equipped.

It has nice leather.

It’s very dependable.

It rides well.

It looks good.

and of course, it gets you from A to B without having to take the bus, etc..

 

Now let’s look at the Rolls Royce Ghost2013_rolls-royce_ghost_extended_wheel_base-pic-3609785005183323252

It is very well equipped.

It has nice leather.

It is dependable.

It rides well.

It looks good.

And, get’s you from A to B without having to take the bus.

 

So, practically these cars are about the same. But, why is the Rolls Royce priced at $300,000 and the BMW at $100,000?

That is a 300% increase for the same practical benefits.

When you consider that BMW owns Rolls Royce and the cars are built on the same chassis can there really be a reason for a $200,000 difference in price?

Of course, because THIS is the Intrinsic Value 

Because Rolls Royce is Positioned as the best.

 

The fastest and easiest way to increase your profits is to increase your Total Perceived Value through delivering a quality and consistent product or service as well as positioning you or your business as the best in your market.

 

Want to be the Rolls Royce of Your Market?

 

Contact me for a consultation today.

 

 

 

 

 

 

 

Howe Marketing Consultants

Let Craig Williams and Neil Howe help you finally get taken SERIOUSLY in your market!