53. What does your price tell your customer?
With effective, intelligent pricing, you can out-maneuver, out-market, and out-sell your competitor and get a bigger share of the market.
1. More products fail because of a price that is too low, than because of a price that is too high.
2. It is easier to cut prices than raise them.
3. "Prestige" pricing can often build your perceived value.
4. One particularly effective strategy is to start out with a relatively high "prestige" price, then cut the price later. The result is a high perceived level of quality, plus a "value" look.
5. A low (or "defensive") price can discourage new competitors.
6. Price testing with a sample group of customers is an excellent way to get important information. Check for positive or negative reactions at various price levels.
7. Price in such a way that you build up your bottom line.
8. Do not get involved in price conspiracy or price fixing agreements.
9. Your pricing strategy should attract customers and confuse competitors.
Price is a vitally important element in your market strategy. You can usually change it quickly, unlike your product or its packaging.
Comments:
I think when looking at pricing, we need to keep in mind what it means to us when we are out personally shopping for products. Sometimes low pricing makes us think that it is poor quality; higher prices sometimes represent higher quality. People will often pay more for well known, quality brand names, or specialty items and not question it because they are aware of its value. Always being at the lowest point is not necessarily the place to be. Like you said sometimes it’s better to start higher and negotiate down, rather than being at the bottom right off the bat.
Kristen Storer
I think the key here is “perceived value” by the customer. If they believe that they are getting more for their dollar they will pay a higher price. But if you don’t meet their expectations based on what they paid it will be a one time sale.
What really confuses the issue is when a new competitor comes in and is prepared to lose money by buying the business. Some customers find that irresistible but, in the long run, they usually come back to the overall best value.
Crocker Smith
These are some great strategies to use in any market of sales. Usually price is the main issue when it comes to making or closing the deal. You have to use these strategies carefully though! This can come back to haunt you later. To low of a price can make a potential client curious or weary of making the purchase. Be careful when messing around with price. Find out what is competitive in your market and go from there!
David Bradley
I believe that price is a good selling point to get your clients attention. If you price your product to low it lessens the value, and if your price is to high it will turn them off. The trick I think is to price your product at such a point that the client will say to them selves that it is a bit high but they must have a good product to be so confident to charge at this price point.
Brian Spraggins
Its true, if we go too low what does that tell our client. They will think one of two things; wow that’s a real deal or wow what’s wrong with your service you can offer it so cheap. We need to be willing to start out at a price that we fill is competitive in our market and stand by it letting our service and dedication prove it to the client. We also have to remember that it is very difficult to have a customer be ok with us constantly increasing prices, and that’s what will happen if we start too low. Costs go up every year, we need to give us a little padding to grow as well.
Brandon Sanchez
You’re price will say a lot about you. In anything that I buy personally, I am very leery about buying something that’s much cheaper than competitors. To me, it raises the question, “what’s wrong with it?” On the other hand you can’t out price yourself right from the start. People will pay more for better service, but if it’s that much more they’ll just stick with what they have. If you know that your price is higher going into a presentation, sale them on the benefits before anyone can even mention price.
Matthew Thacker
Some customers might feel prices are unfair and it is very hard to correct those perceptions. Even when we use certain techniques to remind or educate customers about our company’s costs or benefits, we can only change a small percentage of their opinions. Our price could tell a lot of things to customers, our job is to investigate their opinion and reactions to the price. For example, high prices originated from high quality seem to be fair to some customers, but high prices based for other reasons are usually less fair to other customers, and some customers are just willing to pay more than others. The reasons they base their buying decisions is what help us see what they think of our price. If we know what they think, then we can compete in the market.
Yessie Narvaez
Our lives revolve around price and negotiating prices, from buying a new car, to selecting a high speed internet plan. We are surrounded by choices of prices. We must know our client before quoting prices. Boils back down to research. We don’t want to seem to high, or too low.
Kimberly Burgess
When presenting a high price always have the ability to justify, then if necessary you are able to lower. When quoting the high or standard price it shows your confidence in your service / product. When starting with a lower price, buyers will question the quality of the service or product. It will raise doubts in their mind as to the actual benefits of purchasing or what is wrong with this picture. Plus once you start lower you can’t go anywhere but down.
Carla McCrea
It is difficult to deal with low cost buyers, the ones who will buy the cheapest, because it’s cheap with no consideration on any other factor. If they do eventually buy your product they are so cheap they will nickel and dime you to death. Also I don’t’ want you to want my product because it’s cheap, I want you to want my product because it’s the best, and I am the best.
Morgan Frazier
"Price is a vitally important element in your market strategy. You can usually change it quickly, unlike your product or its packaging."