How could you price your products ?
There are many business owners who got struggling with pricing, they do not know how to price them properly!
There are 3 steps to price your product more effectively:
Estimate if your customers are price sensitive
a. If you increase your price, will your customers drop a lot?
b. If you decrease your price, will your customers increase a lot? If you said yes to both of these questions, then your customers are price sensitive which means you need to be careful about raising your prices by too much.
Choose your pricing strategy
a. Value based – you set the price on what you think customers value your product, this is great for luxury products.
b. Cost + – you set the price based on the cost of your product plus a margin that you set. c. Competition pricing – you set the price based on what the competition prices their products at. This is a good strategy if you have a strong value proposition (see chapter 3) because you will then compete on value not price.
Set your price
a. You now know if your customers are price sensitive, you’ve chosen a strategy, now is the time to set a price. Remember, you can always change it, if you find it’s not quite right.