Beware! This syndrome is hitting the business world hard. And few are able to overcome it. Finding and fixing the right price is a make or break move for your business. Let’s get into it.
Abdullah Ali-Ahmadi in his book by Axent Publishing entitled “Pricing for Profit” drew some insights on the basic mistakes people are doing in setting up prices, he said:
“Pricing goods and services is always one of the difficult tasks in business. Varied and complex factors affect price. One of common mistakes by owners and managers of small businesses is the failures to get the prise right. There are tendencies by SME’s to fall under following traps:
Over-pricing, that is the price is over and above customer’s expectation,
or
Under-pricing, that the price is far below customer’s expectation and seems too cheap, so not to be trusted. “
Many budding businessmen and other enterprising minds have fallen to the trap of setting the right price for their products or services. And you could end on the wrong side of this phenomenon as well, luckily we have some pointers to get you over the pricing hump!
Here are some of Abdullah’s key pointers in setting up your pricing for a product or services from the Pricing for Profit book:
Useful pricing reminders
1. Contrary to popular expectations, there is no set formula for pricing. No two businesses are the same; products are sold in a variety of contexts therefore there is no one system or formula that would be appropriate to every context. Pricing is a complex, multifaceted and composite of issues affect and influence setting up price, therefore it require a great deal of research, diligence and rationalisation.
2. The ultimate determinant of price is value. Value like beauty is in the eyes of beholder. Value is highly subjective and personal. Remember two points when you price goods and services:
Goods: Overall when consider setting up price for physical products; focus on compatibility of quality, image and price
Services: When determining price for an intangible product or service, consider compatibility of service provider’s reputation, customer service and price.
3. If you aspire to be the best and offer premium priced products; beware of the following:
Goods: Your goods must enjoy the highest quality of material, exceptional workmanship, uniqueness and exclusivity with excellent after care and customer service
Services: For your service to enjoy premium price; focus on increasing your own value by becoming an authority in your field, making your service the best in your field and focus on delivering the highest result for your customers. When you aim to become a premium priced service; gradually stay away from hourly and daily rates. Hourly and daily rates are for beginners and mediocre businesses.
Understanding how to set proper prices for your business could spell success for your enterprise. Looking into the deeper sense of the value of your services and products is vital in every move that you make for your business. Learn more about pricing and other marketing topics with Abdullah’s business books here: http://amzn.to/2mFqA54
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