OnDemand WTP Pricing Research

How Does Your Business Shape Your Pricing? | SmallBizClub

Harsh reality: Sometimes you have no choice. Economic conditions, market saturation, inventory issues or some other element of your business may force you to modify your prices, either temporarily or in rare cases, permanently. There is no such thing as forever when it comes to business strategy. We must all evolve or die, and pricing is certainly one aspect of your business that may change over time.

Revenue goals: We often assume that there’s only one reason to be in business, which is to make money. But there are many shades of grey within that. Are you trying to make the most money possible in the short term? Or would you rather make less money every day but have the sale live on for longer? Are you trying to maximize profits or are you reinvesting in something else – be it your company or your community or some population of people that you serve?

Static or elastic: For some organizations, it makes sense that once you set your pricing, it remains the same for an extended period, until inflation, demand or some other combination of influences triggers a one-time price shift. On the flip side, you may sell a product or service that has a lot of elasticity in its pricing. You might run sales or promotions on a regular basis to drive traffic to your location or site. You may have a seasonality factor. If you sell Christmas trees, they’re at a premium price the day after Thanksgiving and at a deep discount price on December 24th.

These elements are the business realities that have to be factored in as you think about your pricing model. Next week we’ll dig into how to think about pricing through your marketing lens.

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How Does Your Business Shape Your Pricing? | SmallBizClub.

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