Tuesday, April 8, 2014

Pricing to market

     Free daily advice for people in small business
     from someone who has been there, done that.

     Pricing the goods and services you sell is very important. Setting prices tells the market who you are, what to expect.

     Price higher than your competition, and you're likely to miss sales opportunities. Price lower than your competition, and you run the risk of going out of business.

     When you are setting your prices, think market. Think what segment of the market you want to address, appeal to, pull into your operation.

     Your clients and customers get to know you in various ways. Your prices tell people just where you fit among the brands out there.

     This is true in every small business--florists and attorneys, hair salons and home improvement specialists, social media consultants and plumbers. 

     No matter what business you are in, your prices contribute mightily to the brand you are building. Your prices are like a neon sign flashing to the world and attracting the market segment you target. 

     Example: You run a florist. Your competitor sets prices for flower arrangements trying to compete with national florist services. You decide to raise your prices--significantly. You emphasize your uniqueness, superior design, quality, free delivery, customer service. You post pictures of new designs daily on Facebook. You happily furnish references and close sales with new customers, customers who happily pay your premium prices. Meanwhile, your competitors languish, struggling with customers who shop everywhere for the best price.

     This same example can apply to bakers (offer custom high-end cakes), landscapers (we use only organic mulches and sprays), appliance stores (free deliveries and 24/7 repairs), hair salons (we are color specialists), and so it goes. You separate your business from the competition by offering more, by higher quality, by caring for customer concerns--and by the prices you charge. 

     Example: Attorneys, accountants and tax specialists, consultants--these businesses tend to price as high as the market will bear. Prices communicate your value. Reputations are at play here, and clients expect top talent to charge top prices. 

     Example: Gift shops define the types of customers they attract by the prices they charge. Of course, the quality and uniqueness must be there. Hand-made works by artisans naturally command higher prices than mass-produced items. And they attract higher end customers--think jewelry, clothing and accessories, and even furniture. 

     Your pricing can telegraph your brand, your name, your reputation. Pricing can go a long way in building a loyal following, repeat clients and customers who swear by you and tell their friends. In pricing your goods and services, small businesses can take a valuable page from successful big operations--just consider what Steve Jobs did with Apple. 

     Questions? Email me direct at: AlWarr16@gmail.com and put BLOG in the subject line.
     I am retired, and I'm not selling anything. Your privacy is always respected.  

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