Pricing your service is one of the most important aspects of your marketing strategy. It helps you determine what to charge in order to maximize profits on sales over the long term. Prices can be practical tools for making ends meet or they can be methods for communicating something about the quality of your offerings.
There are a number of approaches out there, but we’ve narrowed it down to the four pricing methods we commonly recommend:
Method 1. Premium Pricing
When you’re introducing something new, premium pricing is the way to establish in the minds of consumers that your offer is of better value, providing higher quality and distinct advantages over similar services… therefore worth higher prices than what they would normally pay. Through your marketing and promotion strategy, you sell your unique customer experience, brand and image. Companies like Rolex, Apple, Samsung, Nike and Starbucks take full advantage of this strategy. So do boutique businesses that build a name for themselves in local markets through their branding and promotion.
Method 2. Competitor-Based Pricing
With this strategy, you set a price that’s in the same ballpark as other services in your niche. This works best when there are several competitors in your market selling similar offers. Think Coke and Pepsi. Or walk down any grocery aisle in your local supermarket. Everyday prices on popular items will be very competitive. We help businesses to eliminate their competition enabling them to charge premium pricing.
Method 3. Introductory Pricing
When launching a new service, we recommend offering a low initial price to attract customers. The idea is to get more people to try your offer and to quickly increase market share. Once you start building a reputation and clientele, you can start charging more. Your loyal fans will continue to buy what you provide at the higher price – think Netflix.
Method 4. Bundled Pricing
Bundling is an effective approach where you market a set of services for a lower price than what you would charge for each of these services separately. Customers like purchasing services in groups, for the cost and time savings as well as the convenience. They also appreciate it when you create a set of services specific to their particular needs, making those services relevant to them.
What’s YOUR Price?
It’s one thing to decide what to charge initially to get your brand out there in the market, attract buyer attention, and get the sales rolling in. But your pricing strategy typically cannot be fixed. Your costs, customers and competitors can change, and you will need to shift your pricing to keep up with the market. At Impagination, we help you work through your initial pricing analysis and determine which option works best at the time of market entry; and later, how to adapt your strategy to changing market conditions.
How do you ensure THE PRICE IS RIGHT for your business and your clients?