Using Pricing to Play to your Advantage

One of the most frequent questions that I get from women business owners is – “how do I price my products or services?”

If ever was a question that became like that mystical question asked by the Sphinx this would be it. The more you ponder on the answer  the bigger the question becomes.

I’ve had my struggles with that question and the answer I always end up with is I DECIDE! what is the right price for my products and services. There is no way to determine what is the value of my services or for a product.

How can you put a price tag on your time? How can you put a price tag on your creativity and care? How can you put a price tag on the value that you can give to your clients?

Remember – your CLIENT will always determine the value! So here we are back to square one – how should I price it?

Did I say already this is like those old mystical riddles?

However, being a practical girl as I am I’ve also came up during the years with some tips and concepts that helped me define my pricing.

Here are my tips for it:

Focus on Value

Most small businesses build their brand and their success on the value they deliver. Value is so much more than price, it embodies the product, your team, your leadership, and customer service – and it can help differentiate you in a crowded and competitive market.

If you have testimonials of satisfied clients, if you’ve build for yourself a name and a good reputation for quality and value it would speak volumes and clients would be willing to pay that little bit extra for good work.

Selling on this value instead of price will consistently differentiate you for the long term despite the temptation to fall into a price war with the competition.

How do you do this? Know your target market, your competition, your product and your advantage.

Create a Unique Customer Experience 

Once your realize that your pricing is driven by the value you give your clients make sure you deliver for them a unique customer experience. The first 10 years of the 21-century was the information age, people paid for information. Today we live in the experience economy. People pay for experience and they search for a unique experience.

As a small business owner you are in a unique position to create valuable customer experience. Your products and services serve a specific niche, your target audience is very defined and your business operation is small so you can respond quickly to the demands of your clients. You are not tied up to regulations and corporate rules and processes you can change quickly according to what is needed.

If you deliver your clients a buying experience where they would feel that someone knows them by their name, knows and understands their challenges, worries, needs and truly cares for them, they would not check the price twice. On the contrary they would be willing to pay more for that experience.

Price higher than you think you would

I’m willing to bet my money that if I come and check your prices 9.5 times out of 10 I would find out that you are charging much lower than what your clients would be willing to pay.

The question is how to charge it in a way that it would not look either too expensive for your clients or too cheap.

The solution is – give them a reference point. Usually when you give people too many options to purchase you lose sales.

However if there is a product or service that you are interested  they would purchase make sure to put next to it another option that would look much more expensive so they would go to the one that you anyway wanted them to choose for.

And finally…

Positioning

The truth is that all there is about pricing is how you position your price in the eyes of your clients. It is all a matter of HOW you present it to them in a way that they would FEEL that they are getting a GREAT offer.

For this there is a simple mathematical rule (that even someone who is scared of numbers. like me) can get it.

The rule is – the 100 percent rule.

Sounds mystical – I’ll give you an example.

Let’s say you sell a shirt for €20.

What would sound to you a better deal 25% off that shirt or €5 off?

I’m sure you agree with me that 25% off sounds like a much better deal.

However, in reality they are both the same. In both cases you pay only €15.

However, let’s say you are selling a €1,500 coaching program.

What would sound to you a better deal 25% off that program or €500?

I’m sure you’ll agree that the €500 is a better deal – also in real money it is!

That’s the 100% rule!- under 100 position it in % over 100 position it in amount of money they would save

(and thanks for Jonah Berger for enlightening me on this issue)

Now it’s your turn…

What is your experience? What worked for you in pricing and what didn’t?

Give us your tips, suggestion or advice on how to price in a way that would be profitable and attractive.

Share with us your tips, ideas and solutions on pricing in the comment box below.

If you find this article inspiring, please SHARE it on Facebook, LinkedIn or retweet it, by pushing the button on the left, for the right channel, so more women could benefit from it.

Please share this article with your:



- LinkedIn connections
and blog readers...

Have a magical week! Vered