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Small Business Help Customer Quality

Below is a table showing what percentage of units a business must sell to generate the same profit following an increase in price.

SME Customers

Table 1: Impact of a Price Increase

Summary of Key Points

 

    • Not all customers are good customers
    • Know who your good customers are and who is causing more trouble than they are worth.
    • Never compete on price alone as this strategy can attract problematic bargain hunters that chew into the margin.
    • Buying decisions are rarely made on price alone so focus on your point of difference and other strengths.
    • Never criticise the competition instead draw attention to the benefits of your offering in comparison to them.
    • Decide on your pricing strategy, set it in stone and hold your ground.
    • Focus on profit not revenue or turnover when building your business. Selling fewer at a higher price is often more profitable than selling more at a lower price. You need to do the numbers.



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