Perfect Pricing Advice For Your Product Or Service From A Top Business Coach
Let's cut to the chase: getting your pricing right is probably the most important factor in running a successful business. Perfect pricing is a dynamic mix of brand understanding, consumer psychology and market responsiveness. Don't panic though!
Complex as it may all sound, establishing a successful pricing structure that works for you is actually very achievable and can be set up in a very short space of time. An understanding of your market and research into your core demographic are key and getting it right can maximise your success and enable you to create a loyal customer base and dependable brand.
So whether you're just starting out in a new enterprise, or are adjusting the pricing structure of an existing venture, here are my top tips for perfect pricing.
Know what you are worth
As we all know, pricing is crucial to the financial success of any business. If you overcharge for your products and services, you can put off potential customers. But by charging too little you seriously run the risk of de-valuing your business and potentially appearing unprofessional.
Are you going to be taken seriously if you are just giving things away?
Tempting though it may be to lower your prices to secure a longed-for sale, it is important to know your worth. Remember that you are good at what you do and believe in your brand: your success depends on this. Don't sell yourself short by cutting your prices just to achieve a short-term sale. You are better than that!
Cover your costs
The key to avoiding getting yourself in a sticky situation is to plan, plan, plan. By preparing your pricing structure thoroughly in advance and sticking to it, you can appear confident and knowledgeable about your prices, long before you're sitting in front of a potential client.
You want to ooze a sense of reliability and professionalism, which is vital to creating a loyal customer base. To get your pricing right, ensure that you are first covering all of your costs.
You will need to take into account overheads such as office or warehouse rent, travel, insurances and delivery services before you can even consider paying yourself so it is vitally important that your prices reflect this. It may be that you intend to expand over the short to medium term. Again, ensure that these potential costs are integrated into your prices.
The psychology of pricing
Okay, now for the Science bit! Pricing is a strategy that transcends numbers and when deciding where to pitch yourself, you need to focus on more than just the base costs. It's essential that your pricing structure compels your potential customers to buy and this involves you developing an understanding of the psychology of marketing.
Who are you trying to sell to and who are your rivals? Whilst having an original sense of individuality in business can be a huge plus, it is also worth researching your rivals in order that you can pitch your own product appropriately and ensure that it is competitive.
If, on the other hand, your product is unique then you can be a lot more creative, considering a range of pricing structures. Your business will have unique selling points so make a feature of them through your brand advertising and have the courage to price accordingly.
Consideration of clients
Making sure that you stand out by creating a valuable and enjoyable user experience for your customers is even more important if you are selling a service rather than a product. Here, you are selling yourself and having frequent personal contact with consumers.
Understanding these markets involves a great deal of empathy and an awareness of the lives of your potential clients. If, for instance, your core demographic focuses on young professionals, you should have a good sense of how much free time they have and how they like to spend it, along with a crucial understanding of their spending power.
If, on the other hand, your client base is a lot more variable, you will have the opportunity to explore a range of different marketing and pricing options in order to maximise your margins.
Confidence is key
Once you are confident about your pricing, you can begin to implement it into your marketing strategy. Don't feel that your prices have to be concrete from the onset. Be flexible for the first few weeks and months as you fully get to grips with your costings. The key is having the confidence to know what you and your product or service is worth and sticking to your guns once you have found the perfect price.
Nadia's sucker punch
Now imagine you're sitting in a client meeting, just about to finalise your sale and the little voice in the back of your head suggests that you may not be worth the price that you're suggesting. Your confidence wanes, your resolve wobbles and the client has been so amenable that you are tempted to drop your price. As you can discover from listening to my latest podcast, however, there is another solution: a real sucker punch! You really don't want to miss this.