Time to Reconsider Your Pricing Strategy?

Reconsidering Your Pricing Strategies

The most expensive marketing mistakes are often those made as a result of hasty decisions based on inadequate market research or knowledge about one's industry.

Such business ignorance, coupled with a lack of self-confidence or a fear of losing sales (or not getting customers at all) may also cause novice business owners to charge much less than the market will actually bear, making business survival almost impossible.

If you've been in business for awhile, it's probably time to check your pricing again and consider how it might affect the way buyers are positioning you or your business in their minds.

If you entered the marketplace with prices that were too low to begin with (as is so often the case with new businesses), your customers or clients may think you less worthy than your competition, being naturally suspicious of anyone who would offer good products or services at too-low prices.

On the other hand, prices that are too high can just as easily position you in prospects’ minds as being totally out of their financial reach when these may be the very people you're counting on to build your business.

Thus, pricing becomes an important part of your overall marketing strategy, and you can't set the right prices without a thorough understanding of your costs, your industry, the economy, and a dozen other factors, not the least of which is your reputation as a business owner, entrepreneur or expert in your field.

There comes a time, I've learned from experience, when it's necessary to raise prices not merely because they are justified by increased inflation or the cost of doing business, but simply as a matter of principle.

During my years as a professional speaker, I gradually raised the fee I charged for seminars and keynote addresses not out of greed, but because the program directors I was dealing with naturally expected someone with my credentials to charge accordingly. I would have lost credibility as a business authority if I hadn't demanded prices similar to those of other professionals in my field. Now relate this logic to your own business.

If you do something better than someone else, don't be afraid to say so, and charge accordingly. Be prepared to lose a few customers, clients or prospects when you raise your prices, but don't fret about it because you will automatically attract a whole new audience of buyers who can finally relate to you because your pricing fits their preconceived notion of what a business like yours ought to be charging.

As water always seeks its own level, so too will a business find its own level (market) by the way it prices its products and services.

Excerpted from HOMEMADE MONEY: Bringing in the Bucks! - A Business Management and Marketing Bible for Home-Business Owners, Self-Employed Individuals, and Web Entrepreneurs Working from Home Base ©2003 by Barbara Brabec.

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