You’re ready to rock, can’t wait to hit the
streets with your new product or service, but what should you charge? Hello, I’m Peggy
Collins and I’m here to help you price your product. It’s often said that the right price
for anything is what the customer will pay. But that’s really oversimplifying a bit. You
want to evaluate the market place conditions and establish a profitable but competitive
pricing structure. The place to start is to research your competitors, not just prices
but what they offer their customers. You may choose to be the low price leader but you
want that to be a deliberate decision, a marketing strategy you can live with long term. If so,
claim it. Own the position in the pecking order. Promote it and make it work for you.
If you can add value for your offerings or packaged products and services, you can also
build on that in a competitive situation. If in doubt about pricing and you’re unable
to find out about competitors rates, the Internet can be a valuable resource. You may find lots
of information, competitors in other parts of the country to compare or even blogs that
address pricing in your particular industry, or networks and forums that allow you to exchange
ideas with other business owners. A key piece of advice would be, do your homework. It’s
always better to set prices a bit high than too low, as you can always reduce prices or
offer promotional discounts to stimulate sales. It’s much more difficult to go back and raise
prices. So you can get stuck in the bargain basement and have to live with lower profits.
I’m big on packaging your products and services to create pricing advantages and keep new
projects in the funnel. There are economies to be enjoyed by both you and the customer.
Bundled services and packaged discounts serve two purposes. They allow your customer to
save money but they also allow you to sell more one product or service at a time; guaranteeing
you a regular flow of work and more consistent revenue for your business. For example if
you sell apparel, you might discount the shoes or jewelry to match, if they purchase both
at the same time. The bonus here is they look well coordinated and represent your store
in the best light, and they tell their friends where they bought the great outfit. If you
sell services, like photography, you might offer a discount on the larger size photos.
Or if they want a child’s portrait,you may get additional work by offering a family portrait
or a second child in the same sitting. The customer saves money, you save time and make
more money in the same customer transaction. If all else fails, research can help. Survey
your customers or potential client to determine what the product or the service you provide
is worth to them. It’s all about value really. You might be surprised. They may set values
higher than you imagine and that’s an indicator, you might be under pricing. Invest some time
on this aspect of your business. Ultimately, your product is worth whatever a customer
is willing to pay for it. That’s always the right price. These are just a few tips on
how to price your product. Wishing you good luck and good business, I’m Peggy Collins.