OFFERING PRICING OPTIONS
Most of you are already doing this, although perhaps not to the extent that’s necessary. Nobody likes giving discounts, but if you’re resourceful, we’re sure you can pull it off. Why? Let’s sort it out:
- COVID CHANGED EVERYTHING: I think we’re tired of hearing this, but it’s true. We know being shut down was a killer, and cost us all a lot, but much was reimbursed by the government…but as a long-term cost, we will see.
- RAMPANT INFLATION: The U.S. Treasury printed $5,000,000,000 to get us through COVID, and then another $1.9 trillion was printed under the American Rescue Plan Act in March 2021. There were no tax increases to pay for either.
- 9% INFLATION: U.S. inflation hit 9% in June 2022, according to the Bureau of Labor Statistics. This was the highest level in 40 years, with a 9.1% increase in the Consumer Price Index for All Urban Consumers. Inflation continues today at around a 2.4% level.
- INFLATION IS THE CRUELEST TAX OF ALL: Famous American economist Milton Friedman once stated this, as it erodes the value of money.
- THE POOR SUFFER: A regressive tax is one that creates a larger burden on lower-income taxpayers than on middle- or higher-income taxpayers.
- PRICE OF A DOZEN EGGS: The current average price of a dozen large, Grade A eggs in the United States is approximately $5.90. In January 2020, prior to COVID it was $1.50.
- THE “$5 DOLLAR MEAL DEAL”: This was supposed to be a July 2024 promotion by McDonald’s. They have never been able to end this discount, although they have changed the name several times.
- SO WHAT DOES THIS MEAN TO YOU? This is the state of the consumer today. Whether rich or poor, they feel this. Therefore, we recommend offering them a variety of pricing options or packages. It will save many sales, and possibly increase the number of people who are even considering your product or service.
Large price increases for materials and labor are likely to remain in place. Just like high financing rates. Get used to it. We’re going to have to suck it up.
Onward & Upward!
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