1 Minute Marketing Secrets-Pricing
Pricing your product or service can be tricky. First you should identify your value proposition to determine where you fit into the market you are targeting. Do you provide handcrafted originals, low value mass produced products, or something in between?
Next, perform a market survey. Look up your competitors on the web; secret shop them and call them on the phone. How do they communicate their value proposition and what are the prices of similar products and services? Enter this information into a spreadsheet so you have it for reference. And don’t forget to keep it up to date – watch for promotions, specials and changes in pricing – both up and down.
Spend time developing and understanding your customers. What age, gender and economic brackets do they fall into, and what outcomes are they looking for? Consider how and when they purchase from you; being the cheapest tow truck operator is a losing value proposition because people generally use your service in an emergency and are unlikely to price shop.
Test your prices in a variety of ways. Start by setting individual prices, but also experiment with variable and “bundled” pricing. This gives you multiple price points to test simultaneously. For example, when developing prices for the The Steelhead Only fly shop I had some flies at $2.49 and some at $2.95. I combined these into 4 packs for $9.95 and 45-count river sets for $119. This creative pricing change increased my average sale from $90 to $120, and also provided a simpler experience for my (mostly male) online shoppers, who appreciated “one-stop shopping.”
By testing price points based on the outcomes that your customers are looking for, you also generate the data you need to capture maximum profit from each sale.