What prevents companies from raising prices?
What prevents companies from raising prices?Avoid the typical mistakes that prevent most businesses from raising their prices.
This was how the newsletter The Ask praised a business book Oversubscribed in their newsletter. It got me curious and read the book. The book had valuable insights on how you can make your business more profitable and make sure that your services are in high demand. There are some actors who make millions, while most of the actors are barely making ends meet. Some lawyers, personal trainers, or consultants make many times more money than the average person in their industry. This book teaches why some businesses can charge so much higher than the average. What prevents you from raising prices?Many businesses would want to raise prices, but the risk of upsetting customers and losing business prevents that. There are many cases where your business might actually suffer from such price increases due to customers leaving. Raising prices requires leverageYou want to be in a situation, where it doese’t hurt your business at all if your customer leaves because of increased prices. Why this is so hard for businesses?Most of the businesses fail to gain any pricing power because they don’t even aim to be oversubscribed. The typical way of optimizing your business is to scale your capacity hand in hand with your supply. How to get oversubscribedSome might think that in order to be oversubscribed you shouldn’t scale your business but it’s not true. It just means that you need to scale your demand faster than you scale your capacity. I write about growth and startups. Go and subscribe if you haven’t done it already ↓ If you liked this post from Jalopinion, why not share it? |
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