The secrets to pricing that most people ignore
Your pricing is critical to your success not just because it impacts how much money you make, particularly profit, but more fundamentally it impacts what people think of you and expect.
Here are three key areas to think about:
- What does your pricing say about your business?
- Encouraging people to spend more
- Who are you compared to?
1 What does your pricing say about your business?
Pricing is part of the marketing mix and it needs to reinforce/be consistent with how you are positioning yourself, be it luxury, quality, good value or bargain. But as 2 shows this does not mean there is an objective right price.
2 Who are you compared to?
The context in which you are pricing and how you explain your product will also dictate how people respond to your price. A coffee for £1.50 might be cheap in central London or an upmarket hotel but expensive in a roadside café in Sri Lanka. One company has managed to charge 8.5 times the competition for the same coffee just by changing how it is packaged. You can help to set the context as 3 shows.
3 Encouraging people to spend more
Both offering discounts and having a range of products/services with prices that go from high to low can increase what people will spend as your middle prices will look cheaper.
If you want to find out more about pricing and learn the practical steps to how you can apply critical psychological research findings to make your pricing more successful then our next business skills session on the 26th July will be for you. You’ll find out there how I increased prices overnight by 66% for a national firm and we got more sales. Plus lots more and practical tools to help you. You can only access the full business skills session if you sign up.