Finally, we like numbers, so let us throw some at you. Sticking to our caffeinated theme, let’s pretend you are a coffee shop that does $1 million per year in sales at your store. Your average consumer spends $4 on your java jolt, which means you had 250,000 customers walk through your door last year ($1 million / $4 each). Your goal is a 5% increase in sales for next year (a $50,000 increase in sales).
You have two main options to achieve this goal:
Get More Customers in the Door
If you take this approach, you need to somehow get an additional 12,500 customers in the door ($50,000/$4 each). That’s about 34 extra customers every day. Not an easy feat for a store that has a stabilized traffic pattern of customers.
Alternatively, You Can Raise Your Prices
With this approach, instead of charging everyone $4.00, you would charge them $4.20 (a 5% increase). And then you wouldn’t need any additional customers to achieve your goal! Instead of focusing on finding more customers, you can then focus on making your current customers even happier and bringing them back more frequently. This increases the value of your product, which your best customers will truly appreciate.
So… go ahead, raise those prices, no apologies necessary!