The right price for your product or service
will make all the difference between using red ink or black ink on your
accounting books. Unless you have a smart pricing strategy all your hard work of
getting your business up and running could collapse.
Here are some tips for how you should
approach your own pricing methods:
Not
All Prices Should Be the Same
A research study conducted at Yale
University found that when two of the same type of products were priced exactly
the same customers shied away from making a purchase as opposed to when the
items were priced differently. This doesn't mean you should mix up your prices
on the same products. Just understand the mind of the consumer. Perhaps it's
more about changing the pricing with an item that has a noticeable variant like
size or design. This idea also comes into play when stacking your product line
up against competitors. You should always keep an eye on competitive prices.
Try
Price Anchoring
Price anchoring taps into our tendency to
exclusively factor the first price we see when it is set against a second
higher price. Restaurants will use this tip when they are selling expensive
items together. The $50 lobster looks pretty good compared to the $75 Kobe
steak. The result? More lobsters are sold. The basic premise is that you're
creating a sense of value for your customer. In other words, give them
something to compare to.
To
Make a Sale, Decrease the Sticker Shock
What sounds more like a bargain: a
subscription for wine of the month club at $50 a month or $600 a year? They are
actually the same price, but the consumer thinks the monthly cost is more
affordable. This is the approach you should take in your sales campaign. A fee
attached to a product should be a "small fee." Bundle products
together into a single "great bargain package." Appeal to the grander
solution of a problem.
Use
the Number 9
The number 9 has become so ingrained on the
shopper's mind that it actually holds appeal. You can reduce a product from $80
to $60 but it might be stronger to go down to $59. It works every time!
Test
Your Prices
There is a trial and error when it comes to
finding the sweet spot of pricing. You might have to experiment with different
price points to see what works best for your product. If you start a new
campaign with a lower price point, make sure you get your marketing up to speed
so all your customers will know.
