Increasing prices can greatly increase profitability. That’s why we do it.
Sometimes it takes more than just increasing prices on individual products or services. It may take a change in the pricing structure of the entire company – both in what is offered and how it’s offered.
Recently both JC Penney and LinkedIn made innovative pricing changes. JC Penney made a move to go towards an “everyday low prices” philosophy and got rid of sales and coupons. LinkedIn moved to increase the number of “paid” service packages aimed at four distinct target markets.
The changes have been disastrous for JC Penney. The changes have brought very positive results for LinkedIn.