Tip: Re-Evaluate Pricing for Small Customers for Big Results - Modern Distribution Management

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Tip: Re-Evaluate Pricing for Small Customers for Big Results

Small customers are often less price sensitive than large counterparts.

Raising prices is often viewed as a way to scare smaller customers away, but the reality is that small and midsize customers are often less price sensitive than their large counterparts. Don’t be afraid to re-evaluate your pricing strategy for smaller customers, says Jonathan Bein in Making Money with Small Customers.

Research from Strategic Pricing Associates shows margin improvement of 2 to 4 points can be achieved by getting small and midsize customers to pay 5 percent to 10 percent more for the noncore items they purchase.

If your business culture tries to please the customer at any cost, then it is nearly certain that you are offering unwarranted discounts, Bein says. And it’s also a sign that your portfolio is ripe for price improvement. Small changes can have a big impact. 

Read more about effectively serving smaller customers in Making Money with Small Customers.

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