Is Your Price Right?

 

The price of the product or service you offer has to be right for you to get the maximum number of sales. See the role pricing plays in the sales process below.

Perceived Value

priceThe perceived value of your service or product is often influenced by the price.

In most people’s minds, something that is free has no value even if you tell them the real monetary value of the item.

An item that is priced too far below the price being offered by your competitor usually makes prospects wonder what is wrong with the product or service that’s making it so much cheaper.

If the amount you charge is considerably higher than that of your competition, your prospective customer may think you are greedy unless you can clearly demonstrate to them why the price is higher.

One man I know that used to have a carpet cleaning business clearly stated in his ads that he was the most expensive service in town and if you wanted to know why call and ask.

When prospects called, they were told that all employees wore uniforms, were bonded, were trained, were using top of the line equipment and that the job was done properly the first time. His guarantee was that if it isn’t done right the first time the customer didn’t pay.

Many of his competitors were just as professional and their staff and equipment was at the same level as his but they didn’t have enough faith in their employees to offer the guarantee that he did and to boldly price their service at a level where they could make decent money and pay their employees more than the industry standard.

Know Your Business before You Price

You have to know the cost of your product or service, what all of your expenses are and how much you want to pay yourself before you can properly price any of your products or services.

Make sure a marketing budget is included in the overhead that you have before you set a price and make sure you account for any taxes or fees that need to be paid by your business when you set your price.

You must also know what your local and national competitors are charging for a similar product or service.

Additionally, the more you know about your customers and their expectations the better chance you’ll have at creating a price point that meets their expectations.

Do You Have Any Product Or Service Add-Ons?

Add-ons can be used as upsell’s are as a justification for a higher price.

If you choose to use an add-on as a justification to charge more for your product or service, make sure the add-on complements the product or service and that it increases the value as perceived by your customer.

Share this with friends and colleagues then leave your thoughts below.

 

Is Your Price Right?

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