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Finding an optimized pricing strategy for your small business becomes much easier when you use an outsourced CFO that can offer a fresh, informed perspective.Read more
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Want to Optimize Your Pricing Strategy? Here’s How an Outsourced CFO Can Help
Posted by Lagerquist Accounting & Advisory
Today, we continue to the second blog post in our series about the benefits of enlisting the help and expertise of an outsourced CFO.
In our first installment, we covered numerous benefits, such as determining the profitability of small business activities and establishing break-even points for businesses.
In this article, we’ll focus on the benefits of a more specific reason to use an outsourced CFO: finding an optimized pricing strategy for your business.
The Benefits of an Optimized Pricing Strategy
How you price your products and services plays a crucial role in whether consumers will choose your small business over competitors.
The right price can become the fuel that drives your revenue. Choosing the perfect price requires walking a very thin line: If you charge too much, customers may look for a less expensive alternative; if you charge too little, you might not generate enough revenue to cover expenses and get a return on your investment.
Some of the benefits you can expect from an optimized pricing strategy developed with help from an outsourced CFO include higher conversion rates that make your brand more popular and attract more customers, a steady stream of products that will improve your relationships with suppliers, and increased profits that make it possible for your small business to hire the most talented professionals in your region.
Additionally, you could find that your optimized pricing strategy generates higher revenues that you can use to grow your small business through better marketing, eCommerce, tracking customer behaviors, and predicting trends. The more you can collect and analyze data, the more likely it becomes that you can stay ahead of trends and gain an advantage over your competitors.
How an Outsourced CFO Can Help You Evaluate Your Current Pricing Strategy
There are several steps you can take to find successful prices for your small business. All too often, however, owners are too close to their businesses to see their options clearly. The pricing strategies that served you well in the past might not work as effectively as your business grows. Outsourced CFOs can look at your previous strategy, consider new options, and make recommendations without letting older strategies influence their analyses.
An outsourced CFO comes to your organization with fresh eyes and an objective approach that isn’t unduly influenced by a prior course of action. Additionally, they come with experience gained from working with numerous other businesses. An outsourced CFO has a wider perspective that includes pricing strategies used in diverse industries such as retail, technology, healthcare, and professional services.
Common strategies for optimized pricing include:
- Value-based pricing: Setting prices according to what consumers believe your products and services are worth.
- Competitive pricing: Setting prices below those of your competitors to gain an advantage over them.
- Price skimming: Setting a high price when you start selling a product, then slowly lowering the price to attract more customers.
- Economy pricing: Setting a low price in hopes that increased sales will turn into higher profits.
Even if you have tried to implement some of these strategies before, you may not have had the right insight or experience to follow through in the best way, or to recognize when it’s time to correct course. An outsourced CFO makes it much easier to identify, test, and implement an optimized pricing strategy that suits your business’ unique position.
How an Outsourced CFO Can Suggest and Help Implement an Improved Pricing Strategy
Choosing a pricing strategy is just the first step — you still have to put it into action. Implementing an optimized pricing strategy requires ongoing research, analysis, and insight. Your outsourced CFO remains an essential guide and support throughout this process, paying close attention to your sales numbers, expenses, revenue, and profit, and helping you make adjustments as needed.
Lagerquist Accounting and Advisory has years of experience helping companies determine and implement an optimized pricing strategy. Lagerquist Accounting and Advisory specializes in forming a trusting relationship with clients so that it can provide education, insight, and value at every step of the process, from establishing, testing, and fine-tuning an initial strategy through reevaluating your pricing as your business grows and offerings evolve.
Find a Reliable Outsourced CFO for Your Business
Small businesses eager to achieve greater profitability will benefit from partnering with an outsourced CFO experienced in optimizing pricing strategies. Contact Lagerquist Accounting and Advisory to see how optimizing your pricing strategy can benefit your company’s bottom line.
In the next post of this series, you will learn about four key initiatives an outsourced CFO can help you navigate.
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