Whats My Price?

What’s My Price?



The price of your product should be determined by several factors:

Do your market research. Check out other companies in person or research online to see the current price point of products/services. Ask existing customers about products & pricing by using surveys, customer feedback forms etc.

 
Perceived value:

 
Is this a product easily accessible everywhere – if so pricing must allow you to still make a reasonable margin when marketing the product at a price similar to other places stocking the same thing. But your perceived value may be higher. For example: If a lotion is sold in a 5* spa it may be perceived by the consumer to be of higher value than the very same product sold on a supermarket shelf. If it is a service, maybe your after service or technical support for example is far superior so therefore the ‘value’ to the customer is greater. As a business owner or sales person it is our job to show the ‘value’ of the product or service to our client. Fashion is a good example if suddenly an item becomes a ‘must have’ because it is seen being worn be a celebrity then the price rockets.

 Costs

 
Your price is also determined by your costs: rent, wages, production, petrol, packaging, cost of production, marketing etc. More production means buying or producing more volume, which brings costs down. The more a customer buys the more discount he should attract so if you buy & sell products in business you should work with your supplier on an 'economy of scale' discount system.

 
Alignment


 
Anybody buying anything needs to perceive the price they pay is in line with the value they will obtain.  Maybe that’s not a conscious decision but it’s always there. If the price is greater than their perception of value, it’s too high. Notice: ‘their perception of value’ , not yours. Simplistically you have to align your price with the value your customer thinks they will obtain.
 
Establish the value

 
Very often you can’t control the price, but you can control the value. That makes the challenge to ensure your customer or client appreciates exactly how your product, service or solution fits their situation.

You get there by understanding the impacts your solution will deliver & working with your client to establish the financial benefits they will enjoy.

It’s then a fairly straightforward step to building a return on investment (ROI) case with your client & the value is proved.

 Economics

 
The problem is people get hooked up on the ‘price’. In my experience stating the price alone frequently results in the ‘way too expensive’ response.  The secret is to express the price in the context of its ‘Return on Investment’ & not allow the two to become separated. Shift your thinking from ‘presenting the pricing’ to ‘presenting the economics’.

For example: A product with a five year parts & labour guarantee commands a much higher ‘perceived value’. In other words, people expect to pay more initially for the ‘value of’ not having to pay out several times in years to come if the product breaks down. ‘You Pay For What You Get’.

The same goes the other way round when we ourselves become the customer. As businesses we all use services & no matter how ‘cheap’ a service appears to be, whether it be your accountant, solicitor ,advertising or staff, if that service does not meet a high standard in bringing results or adding to efficiency or saving you money then you have still wasted money & time & will still not have received the service or the benefits from the service you required. You may therefore conclude it is better to spend more initially for a service that is clearly superior & get a better, more professional service sooner.‘Speculate to accumulate’.




 

Whats My Price?
 

 

You can find articles like this in www.daximagazine.com

 

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