The Perils Of Underpricing As A Creative
Pricing is a big issue for businesses of all shapes and sizes, and there are a lot of individual factors involved. You don’t want it to be too high or too low for obvious reasons. However, the real struggle comes when you price yourself too low. This is a huge issue with creatives in business, and it is very challenging to recover from underpricing. If you are a startup, you may be tempted to price things low – perhaps as an introductory offer to get people in the door. It is understandable – you’re new in business, you want to make people happy, and you are not quite sure how much people will actually pay for your services. You may even look to undercut the competition, again quite natural for startups and those new to business. Price is not always the most important aspect While some of your customers will be concerned with the price, others will be more interested in whether your product or service meets their needs. If you do, then the price will be less important. But if you price yourself too low, people may assume that you don’t have much to offer your clients. If...
Read MoreSmart Pricing Strategies For Entrepreneurs
Effective pricing can be a difficult thing to ascertain. While you want to offer a great rate to your clients, you also want to make sure you are covering your costs. And then you have competitors to think about. Here are some smart pricing strategies for entrepreneurs and businesses alike. Introductory Offers An introductory offer is a great way to get your clients to try before they buy. It could be an offer of something for free or a heavily discounted product or service. Once you have your customers in your sales funnel, then you can slowly work your way up to achieving larger purchases. Competition-led Pricing When you are less experienced in the business world, it can be difficult to discern how you differ from your competitors. You may need to charge the same as your competition to make sure you are starting out on an even keel. Once you have been in the industry for a while, you can then work out whether your prices need to go higher or lower than your competitors to start seeing a real difference. Loss Leaders Is there one product that you can offer at a low price to bring your...
Read MoreHow Consumers Think About Pricing
They are a funny thing, numbers. Often thought to be unemotional, when attached to a dollar sign, the opposite is closer to the truth. When it comes to pricing goods and services, market experts have a lot to say about how numbers connect to consumers’ feelings, and how they think about pricing as a result. A study by researchers in the US found that consumers are more drawn to rounded numbers ($100 even) when making ‘fun’ purchases, for gifts, holidays or recreational purposes, but were more drawn to odd numbers (say, $97.56) if the purchase was for a functional, professional or serious purpose. For example, someone picking up a bottle of wine to take to a friend’s place might choose the $30 one, thinking $30 exactly must be some kind of sale. Someone catering a business lunch might be more inclined to buy the $32.75 bottle, figuring that to be a ‘proper’ price. Deals on many items, or deals available all the time, like in a discount store setting, are seen as less valuable to consumers than less frequent sales such as those specialty stores conduct. It is also important to note that comparisons to the competition in your...
Read MoreThe Price Is Right
Picking the right price point for your products and services is critical for your success, but it’s a challenge that is often easier said than done. Other than trial and error, how can you know when the price is right? Most popular financial gurus say that the ideal price for products and services is one that covers costs, maximises profit, and is at a rate that is still attractive to clients and prospects. While this is good advice to follow when you are first developing your pricing strategy, it doesn’t take into account intangibles, such as consumer behavior. Consumer behaviour is often motivated by emotions and feelings as well as logical step-by-step analysis. In general, shoppers tend to make a purchase when they feel that they are buying something of value or getting a bargain for their money. Regardless of the motivation behind the purchase, many consumers rely on an inner sense of what they feel things should cost when they are shopping. They then make the decision to purchase based on whether or not the price feels right to them. Understanding your target customer’s feelings about when a price is right is the key to setting the perfect...
Read More3 More Steps To Managing Pricing: Lessons From The Restaurant Industry That Can Work For You
This week we are following on from the last post and bringing you some more steps to help stay afloat, even in a challenging economy. Consider Price Bundling to Draw in Budget Conscious Customers and to Make a Profit Who doesn’t love a deal? Many individuals refuse to spend money unless they think they are getting a deal. Once persuaded that they are getting a “good buy,” they will often spend more money that they originally planned. Successful restaurants know this, and so they offer bundled deals, such as the buy two entrees and get one of equal or less value for half price. Most other types of businesses have the ability to offer a modest discount to those who purchase more than one product or service, and can therefore reap the benefits when they increase their sales and earn the chance to impress new customers. Love What You Do and Delegate the Rest It’s important for many reasons to find joy in the work that you do. It’s also important to have a keen understanding of the costs and expenses as well as the revenue flow from your operation. This can be difficult if you are like many...
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