How often should you change prices?
Every business that wants to achieve a high level of profitability must plan its pricing carefully. In particular, you need to think about how often to change prices. Companies stick to the pricing strategy that suits them. Once you know something is right for you, would you like to change it? This is where you need to be vigilant. It is advisable to keep an eye on pricing because every aspect of the market fluctuates.
Various factors (competitors, customer demand, market situation) have a direct impact on the price of your product. Although prices need to be adjusted, frequent changes can both positively and negatively affect your business.
You should understand that there is no general rule when it comes to price changes. The market is very unstable and it is difficult to predict anything accurately. In addition, the size and goals of your company may also play a role in this discussion. For example, a small business may want to adjust pricing to increase its market share, while a large, experienced company may not need to change pricing frequently.
So, when should you change pricing?
1. Cost increase.
When a company's costs rise, it's normal to raise prices to compensate for changes in costs. This includes increases in the cost of raw materials, supplies and employee wages.
Today, prices in many countries are growing very fast, and in many developed countries prices are reaching a record high. Since inflation is a fluctuating aspect, it is advisable to change prices gradually to maintain profitability.
3. Low turnover.
If you have a lot of goods in stock that need to be sold, think about how you ended up in such a situation. Perhaps your price is not a market price and customers refuse your products. Then it makes sense to reconsider the pricing strategy and set the right price, instead of arranging sales. Customers should understand the value of your offer and choose you not only when the price has reached its minimum.
4. Low profitability.
If your business has stopped growing, you should think about a pricing strategy. You must create the conditions to ensure that your business is properly funded. A better margin will allow you to make additional investments that are important for the viability of the company.
When should you NOT change your price?
Sometimes you should take your time and keep prices the same, even if there are changes in the market. It is recommended to hold prices when the market change will not affect the majority of the company's income.
In addition, companies should leave prices unchanged until they have done proper research on how a price change will affect sales. It is better to leave things as they are than to make hasty, poorly planned changes that will alienate customers and badly affect your business.
It can be difficult to make a choice to raise or lower prices, but it is often necessary for your business to remain competitive. If your ultimate goal is long-term business success, it is best to use our solution – the 7-Price monitoring platform. We will help you analyze your competitors, customers, market trends, etc. in real time to offer you accurate price adjustments. Finally you will be sure that you are offering the best product or service at the best price that you and your customers can afford.