5 New Year’s Pricing Tips

At the start of a new year, one topic that people ask about is pricing.

Why pricing?

In my work, pricing is the MVP moment of marketing because the price setting moment is when you have the chance to capture some of the value your marketing should have been creating throughout the customer’s journey through your funnel.

For most of the people I talk with and work with, price setting is confusing or they feel like they’ve underpriced for so long that they have no chance at capturing their true value.

To give you a boost at the start of 2023, I’m going to share 5 tips that I teach folks to get the most of their pricing decisions.

Remember the formula: Price = Value:

Keep this formula in mind at all times.

Don’t focus on your costs or your needs, focus on what the customer gets.

Low price isn’t a good way to generate demand:

Introductory pricing usually fails.

Why?

Because it suggests that the only thing that matters is that something is cheap.

Remember the formula above, price = value.

In most cases, a low price is more harmful than giving things away. A low price also sets an artificially low perception of value.

And, there’s no data or examples that show that low prices lead to more sales for things that people didn’t already want.

Lower prices on products or services that people already want might work to generate “pops” of demand, but those aren’t really sales promotions…they are PR stunts.

There is no perfect price:

There is only a perfect price right now.

Variables impacting price can change what is the right price. External circumstances can change the price you can receive.

More and more.

The key thing to remember is that there is not one perfect price in any situation.

You set the price that is right for you or right for the current situation.

You can always change your prices, but you’ll never find the perfect price.

Pricing demands research:

This is the key to all of my work in marketing and strategy.

I’m by no means telling you to go nuts and never get out of research mode, but I am telling you that you need to pay attention to the market and go into the market from time to time with well thought out questions to figure out what is going on.

Like every part of your business, pricing benefits from a bit of research.

The best pricing organizations have a pricing philosophy:

WCG is built on value-based pricing.

A company like Apple doesn’t discount and positions everything as premium.

Google seems to try and go free as much as possible because you are the product.

The path you pick isn’t as important as that you have a lens through which you look at your pricing decisions.

The big key is that you have an organization-wide position on pricing that helps you focus on making the right pricing decisions for your organization.

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