hat your price is adequate:
Posted: Sun Dec 22, 2024 9:46 am
Am I charging too little? Should I have sent a quote with a higher price? Did he not buy from me because I was too expensive? Surely you have asked yourself these and other questions when defining your prices, since a common problem among entrepreneurs and small business owners is defining the “ideal price” for their products or services.
This is not an easy task, because no one tells us how to set it and so we start philippines business mailing list “inventing”. Here are 3 tips that you cannot miss to ensure t
Your price should at least cover your costs: Although it seems obvious, this is a recurring problem since many times we do not calculate all the costs associated with a product or service correctly. This one can't fail, because if not, you are losing money! Your price should never be less than the unit cost, and it is very important that you look at how much margin each sale leaves you. Tip: If you have a production company, keep in mind that you must consider all the inputs you use to produce a unit, and of course you must consider the labor (yours or whoever provides this service).
Look at your competition: Analyze your direct competition and see what price range they are in. Your price should be within this range…close to the highest prices if you want to convey a “premium” proposition and close to the lowest if you want to convey convenience (Be careful! Don’t exaggerate, we don’t want people to think your product is of dubious quality).
How much are your customers willing to pay? : Why charge $2,500 if the customer is willing to pay $3,000? Knowing this is not easy because, as far as we know, nobody is telepathic yet…but you can use techniques that help you identify your customers’ willingness to pay, such as:
– Conduct surveys (by email or at your store).
– Talk to and observe your customer’s behavior
. – Define a pricing strategy (that is, if you want to “penetrate the market” at more convenient prices or you prefer a more premium strategy, selling to a smaller segment but at higher prices) and test your customer’s sensitivity to some price variations, such as promotions, packs, discounts, seasonal advances, among others. NOTE: Don't change your prices too often, as this will create distrust in your customers (Nobody likes it when the corner store raises the price of bread every week!)
This will help you to "test the waters" and find out more or less how much your customer is willing to pay. You're sure to get some surprises!
Remember that prices are dynamic: your costs change, your competition increases and your customers' preferences are not always the same. Review them and analyse your environment constantly… This way you will learn from your customer and the market you are in!
This is not an easy task, because no one tells us how to set it and so we start philippines business mailing list “inventing”. Here are 3 tips that you cannot miss to ensure t
Your price should at least cover your costs: Although it seems obvious, this is a recurring problem since many times we do not calculate all the costs associated with a product or service correctly. This one can't fail, because if not, you are losing money! Your price should never be less than the unit cost, and it is very important that you look at how much margin each sale leaves you. Tip: If you have a production company, keep in mind that you must consider all the inputs you use to produce a unit, and of course you must consider the labor (yours or whoever provides this service).
Look at your competition: Analyze your direct competition and see what price range they are in. Your price should be within this range…close to the highest prices if you want to convey a “premium” proposition and close to the lowest if you want to convey convenience (Be careful! Don’t exaggerate, we don’t want people to think your product is of dubious quality).
How much are your customers willing to pay? : Why charge $2,500 if the customer is willing to pay $3,000? Knowing this is not easy because, as far as we know, nobody is telepathic yet…but you can use techniques that help you identify your customers’ willingness to pay, such as:
– Conduct surveys (by email or at your store).
– Talk to and observe your customer’s behavior
. – Define a pricing strategy (that is, if you want to “penetrate the market” at more convenient prices or you prefer a more premium strategy, selling to a smaller segment but at higher prices) and test your customer’s sensitivity to some price variations, such as promotions, packs, discounts, seasonal advances, among others. NOTE: Don't change your prices too often, as this will create distrust in your customers (Nobody likes it when the corner store raises the price of bread every week!)
This will help you to "test the waters" and find out more or less how much your customer is willing to pay. You're sure to get some surprises!
Remember that prices are dynamic: your costs change, your competition increases and your customers' preferences are not always the same. Review them and analyse your environment constantly… This way you will learn from your customer and the market you are in!