Raise Your Price
If you are like most small business owners you are not charging enough. A sluggish economy has trained customers to shop for lower prices and ask for discounts. And many small business owners are choosing to comply to make the sale. But there is a better way. For example, consider the decision made by 37 Signals to charge $9.99 for their iPad application “Draft” in an industry where the average price is $0.99. Setting their price at 10 x the industry standard was calculated to manage the demand, and provide excellent customer service to clients who appreciated the...
read moreIt is All About Value
Do you know what your product/service is worth? Are you charging the right amount? Most small business owners, me included, struggle with this question. Why? Because we often confuse the cost of producing the product with the value it brings to the customer. Establishing a price for your goods or services has nothing to do with the production cost and everything to do with the value. A great example of this in action is software. A few years ago I bought a copy of the Adobe Creative Suite. I opened an attractive box which contained a CD and a small manual. There was less than $10 worth...
read moreOffer Choices to Raise Your Price!
I have seen numerous pricing studies, with the same results, prospects will often think your price seems high if they have no basis for comparison. So how does a small business get around this without sending prospects to a competitor’s site for a price comparison? Offer choice! For example: Model A includes 3 features and sells for $200. In comparison, model B includes 7 features and is only $250. In numerous research studies, when offered two choices, 90% of consumers will select the lower price alternative. However, when presented three alternatives, Model A and B as...
read moreSmall Business Profit Begins with Intelligent Pricing Strategy
What is the right price for your product or service? Most small business owners struggle with this question, because they confuse the cost of producing the product with the value it brings to the customer. When it comes to establishing a price for your goods or services, the value of your product has absolutely nothing to do with production cost. The value is based on how much you help clients save, increase, reduce or improve. If you can quantify these benefits, then you have a foundation for establishing an appropriate price for your goods or services provided by your small business. It is...
read moreMore Small Business Survival Strategies
Joanne Black wrote a good post, with tips on what small business owners can do in a lagging economy. While very little of her content was new, I enjoyed the post because of her tone, and passion as she wrote. Her posts described Eight “Killer Steps” to Attracting New Business in a Lagging Economy. I picked three of my favorites. If you want the rest of the list you will need to read her orignal post. 1. Broaden Your Perspective. - What business are you in? Redefine and reinvent yourself. Determine how you can create a leap in demand for your products and...
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