In Australia, the new financial year commences on the 1st July. Many companies use this as an opportunity (or an excuse) to increase their prices. After all, that’s what the Accountant, the Budget or the Business Plan (sometimes all three) says you should do.
However, the changing of a day, from the 30th June to the 1st July is one of the weakest possible reasons to raise your prices. Here are ten much better, and easier-to-justify, reasons to review your pricing, which have absolutely nothing to do with a calendar:
- When your business launches a new product or service;
- When your business adds or subtracts value to/from an existing product or service;
- When your competitor launches a new competitive offering;
- When your competitor adds or subtracts value to/from an existing competitive offering;
- When a new market, geography or customer segment is identified;
- When a merger or acquisition occurs in your industry;
- When a competitor enters or leaves your industry;
- When a major technology implementation or breakthrough occurs in your industry;
- When a key business process (e.g. supply chain) is outsourced, or;
- When a recall or safety warning is launched
The other thing that’s wrong with new financial year pricing is that it’s too late. Your clients are preparing next years budgets in advance of the new financial year. And guess what? They are making assumptions around what your prices will be next year, even before you’ve even started to think about your annual price review.
If you’re not talking to them right now about what prices you’re charging next year right now, then they will decide what prices to use in their budget, and you will be a price taker, not a price maker.
Have you missed this opportunity to change your prices?
Contact Us here for a confidential discussion on your pricing strategy or challenges.
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