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What happens to your profits if you change your prices?
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Pricing Effectiveness Quiz

Are your prices too high? Too low?
Take the Pricing Effectiveness Quiz and find out for sure

One of the most difficult things for many business owners to do is determine how well they're pricing their products and services. Setting prices too high drives off customers while setting them too low causes companies to leave large portions of their profits behind, costing them money they can never recoup.

Answering the following 28 questions will give you a very good indication of how close you're current prices are to where they should be to maximize profit. Each question can be answered with a yes or no. The more yes answers you have, the higher the likelihood that your prices are too low. The odds are 9 out of 10 that they're too low, so don't be too surprised when you have a lot of yes answers. Place a circle around each yes answer and total the number of yes's when you have completed the quiz.

1. Is your gross margin declining while sales volume is staying flat or rising?
Yes No
2. Is your net income dropping?
Yes No
3. Are your prices lower than your competitors?
Yes No
4. Do you get a lot of comments from your customers about how good you are or how much better you are than your competitors?
Yes No
5. Do less than 10% of your customers complain about your prices?
Yes No
6. Have your prices stayed the same over the last year?
Yes No
7. Do customers buy without asking for discounts?
Yes No
8. Do your customers often buy without even asking the price?
Yes No
9. Are you getting a lot of new customers for no apparent reason?
Yes No
10. Have you had a sudden increase in sales volume without any action on your part?
Yes No
11. When your customers have a problem, do they insist on you fixing the problem instead of asking for their money back?
Yes No
12. Have your costs increased?
Yes No
13. Do known price buyers buy from you?
Yes No
14. Do you have a large backlog of orders?
Yes No
15. Does your backlog exceed the industry average or your competitors' backlogs?
Yes No
16. Are customers buying more than they need or would normally buy?
Yes No
17. Are you having to take more collection action?
Yes No
18. Is your percentage of past due accounts receivable increasing?
Yes No
19. Are the number of requests for price quotations increasing while industry volume is flat?
Yes No
20. Is your success rate on winning bids increasing while industry volume is flat?
Yes No
21. Does the percentage of bids you win exceed your industry market share?
Yes No
22. Are your competitors' sales reps starting to complain about how you do business?
Yes No
23. Do customers quit buying from you and then come back?
Yes No
24. Do customers tell you they can get your product somewhere else cheaper but continue buying from you?
Yes No
25. Do your customers insist that you quote their jobs?
Yes No
26. Do your customers ask “is this price list still in effect” or “is this quote still good”?
Yes No
27. Do your competitors sometimes buy from you?
Yes No
28. Are you too busy?
Yes No



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Are your prices too high? Too low?
Take the Pricing Effectiveness Quiz and find out for sure

What happens to your profits if you change your prices?
Enter your data into the Price Change calculator and find out