Pricing that Sells

Pricing that Sells:from Business 2 Community by Elinor Stutz
One of the most difficult issues facing entrepreneurs when they first begin is the value that should be placed on their offerings. Notice I did not say “price” but, instead, “value”.
Think about the expertise you bring to the table, the energy you put behind the creation of your business and your business’ unique approach.
Determine the cost involved in developing and producing your product or service when setting your price. If you are a coach or consultant, value your time on an hourly or project basis.
Ultimately, you must show the value of your offering to your prospect at a price that also makes you profitable.

Experience is a great teacher.

Spend time researching similar offerings and competitors to get an idea of price range. Then consider where you would like to be in the range. Do you prefer the bottom of the range with the goal to make more frequent sales with less profit, in the middle where you can play it safe, or at the higher end of the spectrum making fewer sales but with greater profit?

Create a Pricing Chart

For any decision there is always a plus or minus attached. Create a spreadsheet for the possibilities of where to price your service while listing the pros and cons. See which appeals to you most and which appears to be most profitable. This is where priorities need to be revisited along with your visionary long-term goal.
Remember, when you price items on the lower end of the scale, you will still need to supply excellent customer service to build a returning and referring clientele. And the paperwork, effort, and costs involved in your process will still be the same. Therefore efficiency systems will need to be in place before you set your prices and begin getting the word out.
Thoughtful pricing comes to mind because of two recent experiences:
The first vendor at a Farmer’s Market offered an item at a lower price per unit for purchasing two versus purchasing three. This made absolutely no sense and worse, potentially limited her sales by 1/3.
Incident number two came about at a well-known cheese factory. The total price for three small wheels of cheese was several dollars less than if the customer only purchased two. While this encourages higher volume sales, it defeats the bottom line.
Whether you sell fruit, cheese, design services, or your advice, from these two stories, you get the idea how important it is to monitor all the variables of pricing.

• Will you occasionally be offering sales and how deep a discount will still let you have a profit?
• Will you offer returning clients a discount?
• Are you considering joining forces with Groupon?

Your bottom line is at stake when it comes to pricing and remaining in business. And confidence knowing that what you have to offer will benefit the client-to-be is a key component to successful selling.

High or Low Price

So the last step to consider is at what price range are you comfortable selling?
Again, there are pros and cons.
If you price your offerings at the lower range of the market, some consumers might believe your offering is not as good as a more expensive one.
On the other hand, will you be confident enough to wear a smile while explaining your offering is one of the more expensive and because…? You must show value!
In order to sell your product or service at the chosen price point, be able to convey how yours is different from the rest. Create a 1-2 minute personal story of why you are excited about your business and how your help your clients. In particular, if you are at the higher point of price, enthusiastically explain why your approach to business should be taken into consideration. When you speak, the words need to be compelling but also believable. This is when your audience will begin to “buy-in” to what you are relaying to them.
Once you have all of these questions answered, you will be headed for a Smooth Sale!