Pricing Strategies

Posted by: Rod Kurtz on April 15, 2008

Want to price your product right? Start by going shopping. Find out what your competitors are selling, and for how much. If you can, buy the competing products, take them home, and do a direct comparison with your products. You may want to do professionally run focus groups to see how people who are representative of your customers respond to your products and those of your competitors, as well as gauge their price resistance point.

If you have room to be aggressive on pricing, take the risk by moving the suggested retail price of your goods up over several weeks, while tracking sales. Sales will drop when you reach the bottom of the sales resistance price (be sensitive to seasonality, however). If you are selling a bundled product or service, explore whether your sales will increase by unbundling and pricing each part separately. Often the separate parts are priced higher than the bundled product/service so you can more easily up-sell all your product or service to each customer.

It’s psychological. The more control you give your customers, the better they will like it. And the more you understand your own pricing structure, the more confidence and control you gain, and you will like that.

Marilyn J. Holt
CEO
Holt Capital
Seattle

Reader Comments

Judi McDonald

April 17, 2008 2:30 AM

Hi Marilyn
I am in the process of writting my business plan for a nursing agency. I have done market research but am finding it very difficult to gain information on what my competitors charge. I want to suppy AINS and RNS to nursing homes with staffing shortages. Im a nurse recuitment agency.
What do you sugest i do to find out the market price? The other agencies wont let me in on the secret. I dont want to charge too much and i dont want to charge to little. I have emailed and called a number of places with and they just wont help me.

Thank you
Judi McDonald
Australia

Post a comment

 

About

Want to improve the way you run your business? Entrepreneurs, academics, and consultants from diverse industries offer practical advice on a variety of topics each business day.

To submit a tip for consideration, first check our archive of previous tips to make sure you're not repeating a tip someone has already contributed. Then send the tip to Small Business channel contributor Michelle Dammon Loyalka. Because of the volume of material she receives, she may not respond to each individual.

BW Mall - Sponsored Links

Buy a link now!