I’ve been doing some research on pricing lately because pricing is on everyone’s mind with inflation, economic uncertainty, and cost of living challenges.
In business, pricing seems to be one of the most vexing issues that people deal with and too many marketers run straight away from the pricing decision.
For that matter, too many people, run from the decision.
This afternoon I wanted to lay out a few ideas to help you set better prices.
Never set your price without some research: It goes without saying, but good price setting requires good research.
Don’t wed yourself to a “benchmark”: You might want to price according to what you consider your competition. That is likely a bad decision since competition in the customer’s mind isn’t linear and what they consider the alternative might not be the same thing as you think it is. So you don’t want to “benchmark” because the important idea is value and that is in the customer’s head.
Understand value through the eyes of your customer: Go deeper here. Know the equation “Price = Value”. Remember, you don’t define value, your customers do.
Recognize that there isn’t one RIGHT price: There is no absolute when it comes to price. You have the right price for right now. That may be different than the price you would have received earlier or later and it might be different than what you set…price is a moving target.
Realize that pricing is a process: The 3 Ps of Pricing are Process, Price, Promotion. Know the 3 stages and prepare to have a way of using all 3 of these moments to your advantage. They all work together.
Don’t Discount…Discounts are For Dummies! Discounts steal your profits. Discounts undermine your brand. Discounts teach your customers to wait. All of these are bad outcomes for you. So, just don’t do it.