Pricing Proficiency Assessment

Figuring out how much to charge for your products and services is one of the most important decisions you have to make as a business owner. If you’re like most other owners it’s also one of your most difficult. Set them too high and you drive off customers. Set them too low and you leave a major portion of your profit on the table, costing you money you can never recover. Money that is often the difference between rousing success and barely scraping by on the edge of bankruptcy.

At an even deeper level, what you charge is a major component of the image your company presents to its customers, prospects, and the outside world. Generally speaking, higher prices tend to create an image of quality and prestige, while low prices often leave a second-rate impression.

Taking this quick assessment will let you know how close your current prices are to where they should be to earn maximum profit. Armed with this information, you’ll either know that your pricing decisions are right on, or that you’re letting large amounts of cash slip through your fingers that can never be recovered. Improved pricing skills will lead to higher profit and improved cash flow almost overnight.

Follow the directions at end of the quiz to read and evaluate your assessment.  As an option, click the ‘Submit My Answers to Chuck’ button at the end of the assessment if you would like Chuck to contact you to discuss your results and some potential ideas and/or solutions.

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1. Is your gross margin declining while sales volume is staying flat or rising?
yesno

2. Is your net income dropping?
yesno

3. Are your prices lower than your competitors?
yesno

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?
yesno

5. Do less than 10% of your customers complain about your prices?
yesno

6. Have your prices stayed the same over the last year?
yesno

7. Do customers buy without asking for discounts?
yesno

8. Do your customers often buy without even asking the price?
yesno

9. Are you getting a lot of new customers for no apparent reason?
yesno

10. Have you had a sudden increase in sales volume without any action on your part?
yesno

11. When your customers have a problem, do they insist on you fixing the problem instead of asking for their money back?
yesno

12. Have your costs increased?
yesno

13. Do known price buyers buy from you?
yesno

14. Do you have a large backlog of orders?
yesno

15. Does your backlog exceed the industry average or your competitors’ backlogs?
yesno

16. Are customers buying more than they need or would normally buy?
yesno

17. Are you having to take more collection action?
yesno

18. Is your percentage of past due accounts receivable increasing?
yesno

19. Are the number of requests for price quotations increasing while industry volume is flat?
yesno

20. Is your success rate on winning bids increasing while industry volume is flat?
yesno

21. Does the percentage of bids you win exceed your industry market share?
yesno

22. Are your competitors’ sales reps starting to complain about how you do business?
yesno

23. Do customers quit buying from you and then come back?
yesno

24. Do customers tell you they can get your product somewhere else cheaper but continue buying from you?
yesno

25. Do your customers insist that you quote their jobs?
yesno

26. Do your customers ask “is this price list still in effect” or “is this quote still good”?
yesno

27. Do your competitors sometimes buy from you?
yesno

28. Are you too busy?
yesno

Now count the number of “Yes” answers:

  • If your score is 5 or less you’re pricing more effectively than most and little or no action is required.
  • If your score is between 6 and 15 you can improve your company’s profitability by learning to become a more effective pricer.
  • If your score is greater than 15, you’re losing a lot of money right now. Learning how to become a better pricer now will close this huge profit drain and you’ll see significant, immediate increases in both profitability and cash flow. Your company’s at risk of failing and you simply can’t afford to sit still while its bleeding cash.
Click on Submit Answers if you would like Chuck to get in touch with you to discuss your results.