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Pricer’s Points: HOW TO DETERMINE THE RIGHT PRICE FOR YOUR PRODUCT OR SERVICE? | Alex Zveiris

As many of you know, the price of a product or service will depend on many factors. However, if I had to pinpoint the most important factor, I would choose the customer’s willingness to pay.

Cost is obvious. We want to cover our costs and make a profit. But how much a customer is willing to pay is the magic number that we have to identify. The way to pinpoint it depends a lot on the value that you are providing to your customer. That’s why it is very important to deliver the best value you can in order to get the best price for it. Many businesses will sell at prices that are probably too low, but there is nothing wrong with that. In fact, selling at high prices and providing low value will hurt the business more in the long-run than selling low and getting slimmer profits.

It is imperative to recognize that everything is based on value. For example, paying more for your vacation during a high-demand season will likely be acceptable by many people because it might be the only time of the year that they can take off from work. I bet you would be very price sensitive during a low season, looking for the cheapest possible price.

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HOW TO DETERMINE THE RIGHT PRICE FOR YOUR PRODUCT OR SERVICE?

Alex Zveiris

Founder, ThePricingTalk.com