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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
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