Q: I'm worried that I'm under-pricing myself out of business. How do I raise prices without alienating customers?

A: While it's only natural to worry that higher prices will drive customers away, it's important to be able to raise your prices if you want to maintain healthy profit margins as your company grows.

It's true that customers may initially balk at a price hike. The key is to overcome your fear and ferret out the reasoning behind your customers' buying decisions. While price is always an issue when making a sale, many customers consider quality, reliability and service to be more important. That is especially true of loyal customers who've worked with your company for many years.

According to Joe Fulvio, a market development specialist at the Third Coast Partners consulting firm in Doylestown, Pennsylvania, "Customers shop price when they perceive little or no difference between you and your competitors or when they perceive differences as unimportant to their buying decision. Failing to discover the real reasons behind a customer buy decision is where most sales are lost."

The same holds true whether you're selling to consumers or to other companies. The best way to differentiate your company from your competitors, Fulvio says, is to discover your customer's "pain points"--his or her needs, desires and motivations--and then, during the selling process, address and satisfy the need that led the customer to you in the first place.