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Are you fearful of losing current customers as a result of a price increase in your product or service? Price adjustments are a normal and, at times, necessary action that all small business owners must take to ensure the continued success and viability of their businesses.

In this episode of “The Little Big Show,” small business expert Denise O’Berry helps you overcome the fear of losing current customers when you decide to raise your prices.

Raise Your Prices Now — No Apology Necessary

AllBusiness.com presents The Little Big Show, a video series from small business expert Denise O’Berry. Watch Denise’s show each week to learn bite-sized tips that can make a big difference in your business bottom line.

Watch the previous episode:
Your Sales Letter Could Be Costing You Business

About Denise O'Berry

Denise O’Berry is a small business expert who’s been helping small business owners take action to build sustainable businesses since 1996. Denise has worked with hundreds of small business owners over the years and continues to be inspired by their enthusiasm and ability to overcome huge obstacles. You can connect with Denise at her website at www.DeniseOBerry.com, follow her on Twitter @deniseoberry, or connect on Facebook.

  • barry_NY

    If your goal is to never expand, then raising prices is a good way to suck dry your current customer base, hoping you can ride it out to retirement. Then blame the loss of your customers on the poor economy. You can always wave at your old customers shopping in the store that opened up across the street.

    In this internet world, new customers are attracted by price first. Plus growing international competition leaves the advice of raising your prices stuck in the ’70s.

    This used to be the rule of thumb in my industry until I turned it into a price driven industry. One leader in my industry told me “Your ruining this industry for everyone.” I responded “No, I’m ruining it for you. I’m makes lots of money”.

    So go ahead and raise your prices. I can always use more customers.

    • Ignominious

      You sound like someone who can sell so many widgets at a loss that you’ll still make a profit.

      • barry_NY

        Losing money was not the point that I was making. I am refering to the practice of raising prices “because we can”. Passing on uncontrollable increasing costs in a tight margin industry is one thing, but squeezing your customer base is another.

        Also, it is a lazy practice of automatically passing on cost increases instead of finding ways to reduce costs. When a supplier raises my costs, I begin to search for a new supplier, or redesign my process so that I no longer need to rely on a component whose costs can’t be controlled. Blaming the economy is easier than having to put in OT working on the budget.

        Raising prices can’t be totally avoided, but it should be looked upon as the means of last resort – not first.

        • Ignominious

          I was showing how extreme your first comment was. Too many businesses are terrified to raise prices and suffer for it while the customers likely suffer as the business slowly collapses. Many times there is no choice but being in a low margin business is like being on the edge of a cliff; one bad move and you’re done.

  • rajkumar

    Yes Barry_Ny is very right – But lets put a figure to where it matters
    it all boils down to what is your profit margin on a unit product after covering your operating cost which adds to the overall price – if it is more than 50% but you are still not making overall profit – it means that you do not increase your price but try selling more.
    Companies do not reveal how much profit margin they have on a unit product but the net profit on the overall sales they made which does not give the actual picture fully