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Strategy
Stop it! Stop thinking about your pricing in terms of marking up from your costs and start thinking about pricing in terms of the value your customers place on your products and services.
Why it matters
The most common pricing mistake businesses make when it comes to pricing is to establish customer prices based on costs plus a markup. Think about it: When you buy products do you think about what the manufacturing costs where? No. You consider the importance and significance the product or service has.
Tips for value-based pricing
- Ask questions to understand what your prospects value
- Focus marketing efforts on conveying the value your products and services offer
- Understand your competitors and the value they offer
- Consider your marketing environment
- Does your branding and identity mirror the value you offer?
- Convenience, quality, service and premium attributes all impact your value proposition. Use them.
Takeaway
The reality is customers and prospects use value to determine the amount of money they are willing to pay for products and services. Value-based pricing allows you to compete more effectively by offering something special competitors simply can’t offer.
I have heard a lot about this concept and fully agree. I’ve heard Mark Coudray speak on a similar idea – offer an experience and it changes the business from” which printer is least expensive?” to” with whom do I prefer to work?” offer something you can’t find elsewhere, such as a simple guide to ordering shirts for the first time because not everyone knows what to do. Offer an online design builder (inksoft!) or an online fundraiser campaign (also inksoft!) to your clients, and they’ll want to order again and again because they enjoyed it!