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I have had some informative experiences recently regarding the price sensitivity of our products.

It’s our 50th anniversary, so, I used that as an excuse to drop our price for company registrations to R175. Just enough to cover the CIPC fees. The reason that I did this was a realisation that we make our money from servicing companies with registrations, bookkeeping, payroll, returns, B-BEE affidavits and a host of other services. So why not just give them away and that way we increase our potential client base for our other services.

We were inundated. I had to stop the special offer, because my staff just could not cope with the demand.

We replaced that special with another one. A 50% discount on trusts from R15 000 to R7 500 in line with the 50th anniversary theme. The effect? Zero. Except that on those trusts that we did sell, we made half the profit.

Why the difference? Because companies are usually for startups and trusts are for people who anticipate becoming reasonably wealthy.

So, before you start mucking about with your prices (as I have done), think carefully about (a) what is your objective? (b) the likely response of the target market and (c) whether the increase in volume will more than offset the drop in selling price.


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