OnDemand WTP Pricing Research

Setting Prices in a Small Business – An Agonizing but Critical Task | The Business Therapist

Whenever I start into a discussion with business owners about pricing – especially implementing price increases – I encounter a considerable degree of resistance. I hear things like “Are you nuts? – My customers won’t pay a penny more!” or “My competitors are cutting prices and I am forced to discount to keep the business”. The pricing discussion is therefore critically important and directly affects the business’s profits. It is worthwhile to consider the following facts about pricing and differentiation.

Why do customers purchase from you? Customers buy based on value perceived

Customers don’t make their purchasing decisions based on price alone – they make the decision based on value perceived for the price offered. If you are getting price resistance, it is because the customer doesn’t appreciate the value offered or because you haven’t differentiated your product or services properly. Differentiation is the way you position your product or service so it is different from your competitor and the difference has an added value to your customer.

Read complete article here:

Setting Prices in a Small Business – An Agonizing but Critical Task.

Post a Comment

WP-SpamFree by Pole Position Marketing