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The 7 pricing strategies every business owner has to know | StartUps

“How much should I charge customers?” For any new business, answering this question and deciding a price point for your product or service is no easy feat.

On one hand, you want to attract your customers to purchase your product or service while on the other hand you want to price accordingly so that your business can generate a profit.

Getting this balance right all depends on the pricing strategy you adopt and the type of business you’re running.

Before we explore the pricing strategies on offer to your business, you should consider the seven following pricing tips raised by Leigh Cauldwell, behavioural economist and pricing expert, in the book The Psychology of Price:

Pricing should be based on the value to the customer, not the cost to you.
Pricing should be tangible, so your customers can see what they get for what they pay.
Prices should be comparable – on terms that you control.
If you want to change your prices, you must reframe the product or service.
Price differentiation is the key enabler of profit.
Pricing communication shapes the customer’s perception of value.
You must be prepared to lose some sales in order to increase profits.
Once you have these key pricing principles in mind, you should explore the following pricing strategies that businesses implement when setting prices.

We’ve outlined each pricing strategy below, along with an example of how this strategy works in practice…

via The 7 pricing strategies every business owner has to know.

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