Denny’s recently opened a new restaurant in Manhattan’s financial district…

Along with the standard fare, guests will also be able to select from a custom cocktail menu, partake in Dom Perignon champagne, and order the Grand Cru Slam combo menu for $300.

So, if even Denny’s can offer premium priced options, isn’t it time you started evaluating your own pricing?

Let’s take a close look at the benefits of a premium pricing strategy, and how higher prices can benefit not only your business – but your customers’ lives as well.

Delivering An Exceptional Product

If you are working with razor thin margins, it’s virtually impossible to deliver an exceptional product with fantastic customer service…

When you have healthy profit margins, though, you have the wiggle room to provide your customers with top-notch service.

Nordstrom would find it difficult to create the same shopping atmosphere and level of service if they were charging Wal-Mart prices…

Apple can invest heavily in design and provide popular services like the Genius Bar because they charge more than the competition.

In a world where product reputations can be built or destroyed via social media, offering a great product is arguably the best marketing you can do.

Increasing Sales AND Prices

The main reason businesses are reluctant to raise their prices is the possibility of losing customers…

If they only understood…

Often the opposite is the case! Pricing acts as a signal of quality. The bold Denny’s move likely brought in some new, curious buyers!

When consumers are faced with two products and equipped with no additional information, they will usually assume that the higher priced product is also higher quality.

Low prices can indicate to consumers that the product or service is in some way inferior… Almost like it’s being sold at a discount to “apologize” to the customer.

Imagine you are buying a blender…

If all of the other blenders are priced over $100, but one has a $20 price tag… you are probably going to assume that the cheap one isn’t going to last.

Of course, some customers will opt for the cheaper options, but that’s not a deal breaker because…

You Don’t Need To Sell To Everyone

Even if market share does decrease as a result of raising your prices, it can still be well worthwhile if margins rise…

A McKinsey study of Fortune 1000 companies in the 1970s demonstrated that, on average, a 1% increase in prices led to an 11% increase in operating earnings. In contrast, a 1% increase in sales volume only produced a 3.3% increase in profits.

The facts are clear: you don’t need to sell everyone. Most businesses see more benefit from providing more value to their best clients, rather than constantly chasing new ones. Someone is buying that expensive Denny’s meal… And that’s all it takes.

Retaining The Right People

When you charge premium prices, it’s both easier and a necessity to retain the best people on staff.

If you are working with limited margins, it can be difficult to attract top flight talent, but fatter profit margins give you more room to hire the right employees (and they will help keep customers coming back).

Also, if you have a reputation for selling the best products, you’ll find it much easier to attract the superstars of your industry.

According to an IDC study, Apple smartphones only make up 12% of the market. Despite these numbers, app companies find it much harder to attract developers to work on Android apps (which has 80%+ of the global market). The fact is, most developers prefer to work on iOS.

The idea of raising prices can be daunting, but it’s also one of the best ways to boost profits, engage your employees, and improve your customer’s experience.

Hopefully the Denny’s story can inspire you to consider what’s possible for any business…