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As a new business owner or appointed executive, Pricing Erosion is one of the huge challenges to face and if addressed unskillfully, can lead to bankruptcy or business closure. As prices continue to fall over time, businesses may face major challenges, including shrinking profitmargins and a negative impact on their financial health.
If you set an appointment based on price promises, your close will come down to price—no matter what else you try! You’re not only losing revenue and cutting into profit to make price-based deals happen—you’re giving up on an opportunity to sell your product’s real benefits or your company’s value to the client.
You can’t afford to spend big money and time to acquire these customers because the profitmargin is already razor-thin. One is focused on quantity, an economy of scale, and tight profitmargins. Other important skills involve technical sales skills like: Appointment setting. The focus is on volume. Compensation.
Gotta keep those agents motivated and the profitmargins protected. And hey, let’s leave 50% of the profit for the team after covering costs. “Create a fair and performance-based compensation structure for real estate teams, keeping agents motivated and profitmargins protected. It’s a win-win.
But price your items incorrectly and you could damage your brand, ruin your profitmargins, and create cash flow and operational issues. Then, determine your desired profitmargin (or markup) and add that to the production cost. To set your selling price, add up your production costs. Don’t overcomplicate pricing.
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