Pricing is one of the most pressing concerns faced by Entrepreneurs, small business owners, and freelance service providers.
Pricing is also one of the most troublesome and ongoing concerns of anyone in business.
Business owners are always concerned that a price increase might price themselves out of the market by alienating their customers.
Any entrepreneur, small business owner, or freelancer will tell you that pricing is a delicate balancing act.
They know that even a small increase can have a big impact on customer perception and their bottom line for better or worse
As a result, business owners must carefully consider all of the factors involved before making any decisions about pricing changes.
What is the best or fair price to charge for your products or services?
This is not an easy question to answer.
In this series of articles, you will pick up a variety of proven methods that will help you not only pick a price but pick the best one.
No matter what you’re selling, price is vitally important.
Small changes in pricing can produce dramatic results.
You may be losing revenue you could be earning because you are under-charging for your products or services.
Alternatively, you could be losing customers and sales by charging too much.
Pricing is the factor that has the largest impact on sales and your profit.
According to studies, when prices increase by more than 10 percent, demand begins to drop off noticeably.
This is because price hikes of this size are often accompanied by an increase in the cost of living, which can further erode consumers’ purchasing power.
As a result, you should be wary of price increases that exceed 10 percent, as they are likely to lead to a significant decline in sales.
A Harvard study found that if companies raised their prices by just 1% while demand remained constant, their profits would increase by 11% on average. What would an 11% increase in your net profit mean to you?
This small, hardly noticeable 1% price change to your customers could mean a huge change in your profit.
What could you do with an 11% increase in profit without any additional work on your part?
An effective pricing strategy will not only help you sell your products or services in the short term, it will also increase your profitability and sustainability over the long term.
The key is for you to understand the fundamentals of pricing and what value you offer to your customers, your target market.
And you easily and clearly articulate the value of your product?
In future articles, I’ll go into more depth into how you can use your understanding of the relationship between pricing and perceived value by your customer to increase your profit.
Now look at your last year’s sales and increase them by one percent and see what a difference that would have made to your bottom line.
Always strive to live your life according to your vision for your life.