The price is right (or is it?)
If you are running any type of business, then chances are one of the hardest things that you will have to get to grips with is the price of your products and services. It isn’t the easiest thing to master and the bad news is that pricing can make a huge difference to your profits and the success of your business too.
Set your prices too high and you may scare off potential customers, set them too low and people may think that you only offer a low quality. So, how can you get it right? Let me help you to make sure that your prices are always right and that you get the very best from your sales.
Take a look at your competitors
One of the simplest ways to check whether or not you are in the right pricing range for your products is to take a look at what your competitors are charging. Setting your own prices near to theirs is a great way to stay safe, however, it is important to remember that you also look at your own benefits and what you can offer your customers that they perhaps can’t.
Don’t be afraid to price a little bit higher
As I have already covered, once you know the prices that your competitors charge, the easiest thing to do is to set your prices at the same level. However, you could be missing out by not charging a slightly higher price. This is all to do with giving the impression that your particular product is better quality then the others out there, even if the price is only just above the others around you.
But equally, know when to discount
Whilst you may be able to charge a higher amount, that doesn’t mean that offering a discounted price isn’t going to work (see the problem with pricing strategies now). The best reason to offer a discounted price is that you are trying your best to get a slice of the market share, often because your service, product or even brand is new to the market. Sure, you will be sacrificing short-term profits on those particular sales, but you will also find that over time your volumes grow and so does the profit that you make, as well as your popularity and brand awareness.
Pricing an entire range of products
For the majority of businesses, a range of products or services is much more commonplace than just offering one. However, with this comes a whole new part of pricing, pricing across an entire range.
The main thing to always focus on is that you are consistent. In doing this your customers will feel that there is value across the entire range. Of course, much like many other businesses, you are likely to have some premium products or services and some that are lower down on the scale. There is no harm in this, however, if you do decide to do this then you need to make sure that you are transparent about their differences.
Getting pricing right isn’t easy, but it is important. The thing to remember is to take your time and do plenty of research into different pricing options, before seeing how they work out with your audience and potential customers. And if all else fails – read this book The Psychology of Price, I found it a most productive read and went into so much more detail than I ever can in a blog!
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