At the weekend I was at the School of Business in Leicestershire. One of the points raised was ‘What do you do to your pricing during a recession?’ Well, so far I have reduced mine to help my customers. But it was suggested that we should increase our prices.
What! How does that make sense. There is less money around and we should put our prices up!!
Actually, it makes perfect sense. There is less money around, that much is true. Which means that to keep our cash flow up we either have to increase our prices, or sell more at a lower price. To sell more at a lower price would require us to reduce the quality of what we do. So basically we need to increase our prices so that we can keep up our cash flow with the lower amount of work that is available.
Now, I don’t want anyone to worry. I haven’t actually increased my prices in 5 years, so it is about time I did. That does not mean that tomorrow my prices go through the roof. A small, realistic increase is sensible in these austere times.
What actually got to me about this advice is that it feel counter-intuitive. It feels wrong. We hear ‘tighten your belts for the good of the country’ and we think that this means that we have to do more for our money. But actually, I am better at my job today than at any time in the past. The sum total of my knowledge is constantly increasing. I am worth more today than I was yesterday. I should not be embarrassed to charge what I am worth.
And here again we have that counter-intuitive feeling. The feeling that we should be humble and not go about blowing our own trumpet. Oh yes, I am good at what I do, but I am humble with it…so please walk all over me…I think not!
So, I am now sitting with my spreadsheets, looking at my cash flow (or lack there of), and working out what I need to survive.
Often over the years a single throw away comment has made me re-think my strategy. Today I hold my head up high and say ‘I am worth every penny I charge, and from now on I will charge more and not undersell myself’.
I hope this rambling makes sense. I am open to comments…
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