Whether you are a sole trader, an SME or a corporate, your pricing strategy will contribute significantly to the ultimate fate of the enterprise. Implementing a premium pricing strategy could well be a very profitable move for you…<\/p>\n\n\n\n
All too\noften when business plans are drawn up, entrepreneurs look at the lowest prices\nprovided by potential competitors and assume that by beating those, they can\nwin business in their sector.<\/p>\n\n\n\n
This is a common fallacy which suggests that customers can cherry pick your service or product and ignore any added value which you may be offering. Successful business marketing is about far more than simply beating the lowest price.<\/p>\n\n\n\n
You should\nnot be looking at a competitor\u2019s pricing in isolation, but at the package they\nare offering. Do you offer warranties, better day-to-day services or other\nadded-value and how do the competitors compare?<\/p>\n\n\n\n
Rather than\nlooking at the lowest price, look at the ceiling price within your sector and\nhow competitors maintain that price. Also, remember that the current highest\nprice may not be the top price which customers are prepared to pay if they can\nsee a better service or product on offer.<\/p>\n\n\n\n
The price\nelasticity in many markets demonstrates that customers are prepared to pay more\nfor a service or product if they feel they are getting value for money. Your\nmarketing strategy must take the dynamics of your sector into consideration and\nset a price accordingly.<\/p>\n\n\n\n
Never\nunder-value your product or service, otherwise, why are you in business? You\npresumably believe that you have an edge over your competitors through the\nbenefits your business can provide to customers or the value add-ons you can\nprovide. Clients are prepared to pay for this and you should set your prices\naccordingly. A niche place in the suppliers\u2019 market is always available. An\nin-depth understanding of the market and demand will allow you to refine your\ncost structure and profitability.<\/p>\n\n\n\n
Once you\nhave the strategy in place, stick to your guns and don’t get embroiled in a\nprice war. You can avoid this by providing exclusive services post contract,\nand ensuring that your offer provides protection against falling prices in the\nmarket. At the same time, it is important to continually review those extras\nyou offer. If they are not being taken up by customers and the overheads are\nsignificant, be prepared to drop them and concentrate on those add-ons which\nare positively affecting the bottom line.<\/p>\n\n\n\n
A business\nmarketing strategy involving solid company branding will also stand you in good\nstead in the event of a competitor-initiated price war.<\/p>\n\n\n\n
It is\nimportant to understand the risks of price variation. If you set prices low to\nbuy market share at the outset, you could affect the standing of your brand.\nThe danger is that you may need to increase prices and existing clients tend to\nshy away when asked to increase their own outgoings. Even where your internal\ncosts mandate an increase, clients will expect increased quality or service as\na justification.<\/p>\n\n\n\n
If you aim to provide a premium product or service, ensure that this is reflected in a premium pricing strategy from the outset.<\/p>\n","protected":false},"excerpt":{"rendered":"
Whether you are a sole trader, an SME or a corporate, your pricing strategy will contribute significantly to the ultimate fate of the enterprise. Implementing a premium pricing strategy could well be a very profitable move for you…<\/p>\n","protected":false},"author":22,"featured_media":5473,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[777,775],"tags":[],"class_list":["post-5555","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-marketing","category-tips-tricks"],"yoast_head":"\n