How to Stay Profitable Yet Well Priced

Yes you can operate your business profitably even in a tight economy. The key is to understand your customers and to understand your marketplace. I have found that doing a market analysis is something that is well worth the time and effort before you consider raising your prices.

Several years ago when we restructured our blogging program, I did a market analysis. I priced out seven different blogging firms to identify what they offered, how they offered their services, and what their price structure was. What I found out was that our own services were so far below the market average that we had real room to not only pay our writers more, but to make a sideline business a core business for our firm.

Our approach has always been to offer great service but at an affordable price; one typically below the market average and when I restructured our blogging services I maintained this same model. Although we have had a few price changes and word count changes over the years, we have continued to show strong growth in this sector of our business.

Most recently one adjustment we have made is to move our older blog clients to blogging prices at a higher rate if they were not purchasing writing services for a minimum of three days a week. In this case, several clients have chosen to move back to a three day a week schedule instead of staying at the two day a week schedule at a slightly higher per post rate. Not only does this help the writer with more income and increased productivity, but helps to cover our overhead costs to monitor and manage client blogs with increased income.

By making sure that you provide great value and responsive service and are still priced below your competition you can increase your pricing to improve your own business profitability. Just make sure that you understand your marketplace and have differentiated your services clearly for the consumer so that your desire to improve profitability doesn’t end up chasing away new customers.

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