One of the questions I’m often asked is ‘how much should I charge for a product or service’. This is typically the starting point for most discussions on pricing strategy. But the question you should be asking is ‘How much do customers value the products, services or other intangibles I provide’.
There is no right or wrong when it comes to pricing – but your profit margins will ultimately reflect the pricing strategy you choose. So it actually depends on your goals and objectives.
Three Things Your Pricing Should Do
- Achieve your financial goals and profit objectives. The key here is to have objectives and know your true costs.
- Fit the realities of the market. Will customers buy at that price based on value and competition?
- Support your positioning and other elements of your marketing, such as distribution channels, promotions, and product uniqueness.
The first two are obvious and most small businesses incorporate these into their pricing decisions. But often they overlook the third one. In doing so, they often lose profit and sales.
So as you set or change your prices, make sure you consider all three elements. To learn more about pricing strategies, check out my article, Pricing: 6 Common Mistakes to Avoid.
Ready to Put Your Business on the Path to Success?
Would working with a business coach help you take your business to a whole new level? Then let’s explore the possibilities with a complimentary consultation. It’s a chance to get to know each other, discuss your goals and the obstacles that hold you back. Together we can determine if there is a good fit between your needs and my services.
To learn more or schedule an appointment, call me at (856) 533-2344 or drop me an email Joan@HybridBizAdvisors.com