Pricing is a topic that makes business owners sweat. Am I too cheap? Too expensive? It’s all relative and it’s a complex issue, here’s my tuppence worth.
Too cheap – you can be too cheap; I was a lookalike (Brad Pitt*) and decided to add a zero to my pricing to see what happened. No surprise, I got fewer bookings. Big difference was I generated more income. Initially I was seen as “cheap” – and cheap = low quality = bad act. Higher price gave me more weekends off and I made more money!
Too expensive – the fee for calling a trade at 3am on New Year’s Day can take the shine off celebrations. Many trades charge premium pricing at busy times – and why not? It’s demand versus supply. But a word of warning – if you hear a customer say “too expensive”, that may be just that customer. Not everyone values everything the same.
Matching competitors – a recipe for disaster. It’s a race to the bottom – no-one wins, not even the customer. When budgets are tight you’ve very little room should things go wrong, leading to short cuts and headaches all round. Unique selling points generate a premium.
Ignoring competitors – Completely ignoring the competition will leave you unsure of the ballpark you are playing in. Knowing what the competition does and understanding your point of difference allows you to uplift your pricing accordingly. Research local pricing.
Assuming a maximum price point – Sometimes you’re just too cheap, as a famous beer brand states: “Reassuringly Expensive”, higher pricing reassures certain customers.
Apple don’t (initially) compete on price, why should they? Apple products are a premium product. Can you add a premium service or product?
Pricing is a challenging subject, I can’t promise to increase your pricing tenfold, but if it’s a topic you struggle with, give me a call on 07968 756595.