Apple made 1 billion in sales in 2021 – PER DAY.
Small businesses (SMEs), raise your prices.
Diverse Suppliers, raise your prices.
Sell your product or service on the value you add, not on how cheap you can be.
Yesterday I talked about the cost of goods rising across the UK. So far, according to the poll, 80% of people are seeing an increase of between 10 to over 20% on their weekly shop.
But many Diverse Suppliers or SMEs may not know HOW to raise their prices accordingly. Allow me to introduce you to the:
📈 RPI = Retail Price Index
📈 CPI = Consumer Price Index
When I was in Sales, each of my auto renew contracts increased by the RPI rate that year.
The RPI inflation rate was 7.1% in November 2021
The CPI rate rose to 5.1% in November 2021
As the cost of running businesses increases, negotiating the terms & conditions of your contracts can be a difficult conversation, and having the skill inside your business is an asset.
Unfortunately, what I see most often is that Suppliers get beaten up on price, in order to secure the deal, and wind up competing with other businesses in what is often referred to as a ‘Race To The Bottom’.
When negotiating with a prospect or existing client, add a line item that includes a price increase at the CPI or RPI rate upon renewal.
This addition in revenue will help support your business and go towards covering the increase costs you'll incur.
Closing thought
Just think, where would my business be in 3 years time if we increased our prices with existing clients by 3%-5% each year. What could we build, what could we solve, who could we hire if our revenue grew and was invested back into the business.