Pricing is a continuous struggle for many Nashville small business owners. If you don’t get it right, it can mean the failure of your business. Here are 3 ways to improve your pricing strategy.
1. Know your cost. This is said often and I agree 100%. I personally don’t see how anybody can claim to have accurate pricing without clearly understanding their cost. Think about it. If you are charging $99.99 for something and your cost is $91.99. You are only making $8 a product. Your profit margin is a mere 8%. Immediately people think they need to raise prices. However, you should also explore your expenses. They maybe way too high.
2. Keep it simple. People are simple. They like simple pricing. $1199 is more attractive to customers compared to $1,199.00 or even 1,199.
3. Know what you are worth. There are many pricing strategies and my most highly recommended is perceived value to the customer (although a mixture can be used). So you have to know what value you provide to the customer. And then let the customer know what you are providing.
The Knoxx Group