We Are Sunshine

Know Your Worth: It may be time to consider a strategic pricing overhaul

Wednesday, August 11th, 2021

Typical economic conditions make it inevitable that businesses of all types will need to gradually increase prices for their products and services over time. Just like milk doesn’t cost what it did 10 years ago at the supermarket, if you’ve been in the industry long enough, it’s unlikely that you’re selling tanning for the same rates you did 10 or 20 years ago.

You’ll have to adjust prices eventually regardless, but, right now in particular, many states have seen, or will soon see, significant hikes in minimum wage that greatly increase payroll expenses. Most businesses in any sector are also currently experiencing a hiring crisis, as companies scramble to rehire enough workers to stay operational after the economic fallout from the pandemic. That means, even paying a higher minimum wage might not be enough to retain a well-qualified staff.

Whether you’re struggling to keep up, or you’re just looking for ways to increase profits, it may be time to consider whether a comprehensive or partial pricing overhaul could be part of the solution. Just because your competitors want to compete on price doesn’t mean you have to or should. You can’t compete based on price with gyms that offer tanning for $10 a month, so most professional tanning businesses today need to compete on quality.

The key to succeeding without competing on price is understanding and utilizing your “unique value proposition” – what sets you apart from your competition. You don’t have to be cheaper, if you are better and therefore provide better value for the additional cost. In an article for Entrepreneur Magazine, International Sales Expert Grant Cardone explains why you shouldn’t be afraid to raise prices as long you’re confident in the value you provide. He suggests that you should only be concerned if you believe your customer buys only on price, you have lost a sense of your value-added proposition, or your team lacks sales skills and closing techniques.

With a strong sales team, quality equipment in place, the right strategic adjustments, and the ability to explain your worth, an increase can actually be a win-win for your business and your customers.

“Higher prices are good for your company,” Cardone wrote. “Higher prices allow increased compensation for your people, the chance to keep up with higher operating costs and hopefully greater margins for you to increase services to your clients.

Click here to read the entire article in the latest issue of Smart Tan Magazine online.