Sales are down, lets raise our prices!

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It’s common practice during tough times for companies to play with pricing. Common business sense tells you during tough times it is easier to survive servicing current customers rather than investing in acquiring new business.

With these two thoughts an observer of the VoIP market place would expect to see rapid price decreases. VoIP companies dropping their shorts to meet the demands of existing customers to save on their acquisition expense.

Would you be shocked to hear that the opposite is happening?

Alright, so you already knew that. My title gave it away.

 Everyone’s sales are down and some have raised their prices.

Over the last five months for a number of stated reasons – none of which I fully believe – a few VoIP companies have quietly increased their costs to existing customers. In the face of one of the worst economic periods ever they raised their channel partners product costs.

You probably didn’t see it. No one informed the gritty VoIP streets either.

Price precedences had been set long before. Savvy end users and volume purchasers don’t care to hear they have to pay more today then they did a month or even a day ago for the same thing.

Best work with their lack of hearing then deafen the ringing of your register.

The channel partner now gets it at both ends. The street has a long memory and their vendor a short one. The guys who are always promised the fat margins are actually the ones getting the squeeze.

It fly’s in the face in the logic for most. You’d think that working with channel partners to drive business – rather then milk additional profits from them – during these times would be the consensus strategy, but for many it’s not.

As frustrating as it is to watch there is hope for the middle men of VoIP.

A growing contingent of vendors are emerging who are giving their channel customers more margin through marketing programs, rebate opportunities and even cost decreases. Their cutting in other areas in order to do everything they can for their existing customers.

It’s working and their winning – both with renewed channel loyalty and an increase in profits. But you wouldn’t have thought investing in your existing customer would actually work, right?

After all sales are down, just increase your prices.