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Apply These 4 Pricing Tactics to Drive Major Revenue | Small Business Trends

Pricing is one of the most important aspects of running a successful business, yet most entrepreneurs give it very little thought or scrutiny. Why is this? And how can you change the way you view pricing in your own business?

The Problematic Pricing Plague

If you think about it, the price of the products and services you sell has a major impact on every facet of your business. If prices are too low, you’ll probably see fantastic sales volume, but you won’t be able to make enough profit to keep the lights on. If prices are too high, you might have a robust per-unit profit margin, but you’re only going to sell a fraction of the volume that you need to sell in order to pay your employees’ salaries.

The price of a product isn’t just a number. Sometimes moving a price just 75 cents or a dollar in one direction can have a significantly positive or negative result. Yet in most companies, pricing is something that happens independently. Often, prices are set rather arbitrarily.

“Pricing is a concept that transcends profit margins. It’s also a marketing tactic that can help your business boost sales volume,” respected entrepreneur Neil Patel explains. “When you think about pricing, you need to focus on more than what will cover your company’s operating expenses and pay the bills. You need to choose numbers that will compel your audiences to buy.”

Patel is touching on the real heart of pricing in today’s marketplace. While some consideration must be paid to profit margins so that you’re sure you’re turning a profit and covering operating costs, more attention needs to be given to pricing psychology and how it dissuades or compels customers to open up their wallets.

Sometimes sales slumps have nothing to do with the product you’re selling. While it’s easy for your mind to immediately jump to the conclusion that business is slow because customers aren’t interested in what you’re selling, it’s quite possible that it’s your pricing that’s all wrong.

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Apply These 4 Pricing Tactics to Drive Major Revenue.

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