Pricing strategies are an essential part of any business or marketing plan. Here are a few mistakes you would not want to make.
We all are aware that there are various aspects of marketing for any business venture whether it is online or offline. You have product, planning, placement and last but not the least pricing. In this article, we explain the most common mistakes that businesses and individuals make while setting price tags for their product or service. Pricing strategies are one of the most important part of your brand creation and its placement amongst other competitors. Following are some of the pricing blunders that are normally seen in businesses which fail to convert leads into sales.
- Cost over Value
Probably, one of the biggest blunders done is to base your pricing strategies purely in terms of cost while totally negating the customer’s perception of your product/service’s value. If you only keep in mind the total direct and indirect costs that you are bearing and target an estimated profit then you are going in the wrong direction. Care for your customers, take their perspective into account and see what value are you truly delivering to them and then price the product or service.
- What is the Market price?
This is another classic mistake. It is fine if you take a look at the market place to see what competitors are charging but if you make keen rough estimates as to what price you should have because the market is paying for it, is totally wrong. Market prices can be misleading and can confuse your pricing strategies as well; it is quite possible you end up charging higher than your customers expect or lower than what you could have priced it because of the high value it was delivering to the user.
- Not Varying prices
There are many companies which, to the anger of their customers, are not changing their prices even though times, economic policies or certain factors may have been altered since it was first priced. Example, if your product is manufactured using certain raw materials which became cheaper as the time progressed but you tend to maintain the price to make extra profits; this is definitely a terrible idea. Customers are not sheep; they are intelligent and will easily move to another product which practice better pricing strategies.
- Poor management of Pricing Strategies
Management is applicable even in the pricing strategies and good sound prices only come from those business which practice safe and well research pricing policies. There are companies which practice simple pricing strategies based on assumption and sources of data while others do extensive research into pricing to get it actually right. There are three things to cater to while pricing and those are; cost, price and sales volume.
If you avoid the mistakes that we have compiled above then we believe you will be able to evade all possible threats there are to your business however, there are details which could not be mentioned here. So we advise you take a look at different companies, their pricing tactics and the success they achieved to get a further in-depth understanding on the topic.