"Is this as good as it gets?"

In the movie with a similar title, Jack Nicholson asked this question of other patients sitting in their psychiatrist's waiting room. He was referring to their collective lots in life. He was portending that things would never get better. Cynical? Maybe. True? Possibly.

For business people, it begs the question: Will things ever get good again? Will we ever be able to raise prices again? Has deflation finally settled down? And what are the realities of this new economy?

In this tug-of-war over price, what are your alternatives? Will you hang on to the rope and risk being pulled into the mud pit of never-ending price cuts? Will you let go of the rope and walk away from bad business? Will you strengthen your grip—and resolve—and pull harder? Will you ever be able to raise your prices again? Yes. Will things get better again? Yes. Has the new economy created a different set of buyer expectations? Yes.

We live in a Wal-Mart world these days; that is the new reality of selling. Customers want "everyday low prices." Their job is to whittle away your profit margin, and your job is to not let them do their job. Who is doing a better job at their job these days, you or the customer? Raising prices is only one way for suppliers to boost profitability. Maybe the question we ought to be asking is, "How do we increase profitability in the new economy?" This opens the door to many strategies, not just price increases.

Consider, for example: expanding markets into new areas—products, segments and geographies; fully leveraging existing business relationships; changing your product mix to maximize more profitable lines; charging for value-added services; eliminating value-added services that customers don't want to pay for; increasing minimum order size; and—if you're really bold—raising prices.

When raising prices, you may need to re-think your market-share mindset. Is it possible that there are customers out there who will pay more for your goods and services, but you're failing to capture those extra margin dollars because you've locked on a market-share number and consider it sacrosanct? It's food for thought.

Consider the small boutique-type stores that compete successfully and profitably with Wal-Mart because they offer something special. When you're competing in a market and you can't buy as cheaply as your competitors, and your infrastructure is not set up for operational efficiency, you cannot compete as aggressively on price. In other words, you're not going to out-Wal-Mart Wal-Mart when it comes to price.

Expand your vision of other ways to build the bottom line of your business. Price increases help, but they are not the only strategies.