There’s no denying the fact that the pricing process can be one of the most overwhelming aspects of a business. Many business owners are spending too much time working in their business and not on it. Often leaving it too late and waiting until they’re running into issues before looking at a pricing strategy.
Your pricing strategy needs to be competitive and delight clients at the same time. Let's find out how to make that possible.
How Do You Select The Optimal Level Of Pricing?
The price you charge for your goods and services can have a monumental impact on the success and profitability of your business. This makes it all the more important to regularly review and adjust your pricing according to market trends.
Many businesses study their competitors or the market when deciding their prices. It’s also important to account for inflation, wage growth, increased costs of supplies/materials and any other cost increases. Keeping an eye on market conditions and client movements can allow you to be one step ahead and pivot your pricing accordingly.
However, when reviewing your prices, it's so important to remember that:
- In our experience, customers aren't as price sensitive as you think.
- Price only matters when all other things are equal. Always find ways to improve the client experience and differentiate yourself.
- Review your offering and provide more value for your clients to entice them to pay more. If you improve the experience, charge the client accordingly.
Why Should You Have a Precise and Calculated Pricing Strategy?
We’re currently in a period of inflation, so its important that your pricing takes this into account. Evaluate where your current pricing is at in comparison to the inflation rate and ensure that inflation is worked into your fees.
Having a clear pricing strategy has numerous benefits, which will only improve the overall profit of your business. Those benefits include but are not limited to:
Price decides the value – Customers typically link lower prices with subpar production standards. The value of a product generally correlates with its price.
An excessively high price is a deterrent – If your pricing isn't competitive, it can turn off customers and discourage them from buying your goods or services.
Give customers a reason to believe in you – The right mix of pricing and value can improve people's perception of your brand and inspire trust in your products and services.
Increase your Brand Value With Perfect Pricing – A Case Study
We recently worked with a hair and beauty business. Unfortunately they weren’t charging in line with their value, so weren’t as profitable as they could have been.
We adjusted their price list, changing the prices for their services and products by an average of 10%.
This resulted in a increase of net profits by over 37%. See the breakdown below.
A solid pricing strategy helps determine reasonable yet profitable prices for your products and services and ultimately determines your business’ success.
Schedule a call with us, and let’s talk about how we can help your business.
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