How to increase prices when tied into fixed price contracts

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Some clients who start working with us on the journey to multiplying their profits feel that it’s an impossibility for them to increase their selling prices because they are tied into fixed price contracts. They can envisage saving a little from their costs to squeeze a little extra profit from their sales, but can’t envisage how it’s possible to multiply their profits as they can’t increase prices.

There is a way to solve this problem and I illustrate it to clients with my true story:

The Initiation

In early 1980s, long before formally working as a profit mentor, I was a doctor running my own hospital in India. The fees for a consultation with me were 100 rupees which was the maximum the general population would pay to see a doctor at that time.

 

One day as an experiment I altered the sign hanging above the reception desk so that it read: “Fee for consultation with Dr Chopra: 100 rupees. Fee for Special Consultation with Dr Chopra: 1000 rupees.”

 

Patients would ask me what the special consultation was. I told them that as well as dealing with their medical problem, they could also talk with me about any life problem for which they hadn’t found an answer to date. It was the beginning of my mentoring services.

 

To my surprise, from then on a percentage of patients every month requested the ‘Special Consultation’, willingly paying ten times the normal fee for what they saw as a premium product.

 

Strategy

Many profit mentoring clients have used the principle of my story to increase their profits. They have maintained their current product or service as their basic level offering. They have then developed an additional two to four quality premium products or services across a varying price range. These have been offered both to existing clients or customers where they have fixed price contracts, and to new potential clients. A percentage of customers and clients will not be as price sensitive as others, and will opt for the premium product or service with its superior quality and benefits, thereby increasing your revenues and profits.

 

It’s a principle that you’ll have seen used in many different areas of retailing and public service, from ready meals to handbags, from petrol to cinema seats, from hairdressing to air travel. Are you using the principle in your business to help increase your profits?

 

If you don’t already have a premium product or service on offer, what could you develop that would be your version of ‘the Special Consultation’?

 

To book a Profit Strategy Session, contact Dr Chopra by filling in the form http://www.angloindia.co.uk/book-your-profit-strategy-session/