Example 1: Massive Underpricing
A national company selling a distributorship opportunity for its unique products had been in business over twenty years. With a modest print advertising presence they were selling from 10 to 20 new distributorships each month, and were very pleased with this sales pace.
My marketing analysis determined that this company's buyers would be willing to pay more for the distributor package than was being charged... up to double the price, in fact. I also determined that a substantially higher price would separate this company's offering from a number of lesser offerings in the same marketing channel, and would result in attracting more motivated, higher-producing distributors for the company's products.
The company has since partially followed my advice, and has raised their price by 50%. Their sales pace has remained the same. The quality and productivity of their newer distributors has indeed gone up. But the revenue from distributorship sales has gone up by 50%, and profits have gone up by 125%.
The increased profit from just one distributor package sale under the new pricing more than paid for the entire cost of this company's consulting fees.
