One of the hardest tasks in business is to put a dollar value on what you do. Yet Price is one of the most crucial ‘Ps’ in your Online Marketing Strategy.
Pricing a service is harder than pricing a product, but both can put you in a spin. With a product, you can work out the cost of making it, add a percentage, and that’s your price. Sounds simple, right?
In reality, you also need to factor your competitors into that equation. If your overheads are higher than theirs, your price will be higher. And that is a motivating factor for potential customers.
Price Isn’t Everything
Pricing your product is particularly hard if your competitors manufacture overseas, but you prefer to keep it local. So, if you can’t compete on a cent to cent basis, you market your product as better because it is Australian-made.
The key is for your product or service to represent good value – not necessarily be the cheapest. Value is perceived in other ways and customers will pay more if they believe – or you convince them – that your product is better suited to their needs.
Targets and Budgets
Part of setting your price, is also setting your sales targets and budgets. For example, if your product price is too high because you are paying too much for your premises, it might be time to move. Can you make savings by switching phone provider? Are there talents amongst your employees that you are under-utilising?
The kneejerk reaction is to cut quality or staff – or both. Don’t be tempted. Find savings where you can, but maintain the factors which help make your product better than your competitors’.
Make Your Pricing Work
Consider how you can make your pricing work for the customer. Can you combine certain products or services with promotions or special offers? Can you introduce savings through a customer loyalty program?
Can your business accommodate a ‘buy now, pay later’ scheme, like ZipPay or AfterPay? While there are some costs involved with this, it will generate more – and possibly bigger – sales.
Today’s businesses need to work smarter, not harder, to capture their market share. And as a business owner, you have to totally believe in your product, and in the price you put on it. If you think it’s too high, so will your customers.
Self-belief and confidence go a long way towards success, and towards establishing you as an authoritative voice in your industry.