Saturday, March 30, 2013

Pricing Your Products

Around this time every year businesses tend to reconsider their current price point. Usually, and in relation to the 04/15 tax deadline, companies are looking to raise rates. It can be a risky move. So, how will your customers react?

Well, customers hate too many choices. You would think the opposite would be true, but it isn't. In fact, according to various financial data- customers find too many choices overwhelming and end up not buying anything. My advice, if you're going to raise rates- do so without offering several contract terms or price points.

Provide a deal. If you have to raise your rates make it worth your customer's investment. For example, if you have a product or service that sells for $200, and you're going to raise rates to $250, try selling three of the same item for $700. This tactic has worked for decades.

Finally, be honest. If your customer threatens to walk because of a price hike- let them go. Otherwise, you will have an angry and cynical customer to deal with. Instead, find someone who is willing to appreciate your product or services- at the higher price point- and move on.

Until next time,

Twyla

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