Adjusting your current pricing strategy
Developing a pricing strategy can be tricky. If your price is too high, your customers will balk and go elsewhere. Therefore a lot of people in business price low in order to induce trial, gain awareness and build a solid customer base.
But once you’ve been running your business for a while, you may notice that these lower prices aren’t in line with the quality and amount of work you’re putting into the products and services you’re providing. If it’s time to raise your prices but you don’t want to kill your customer base, here are three ways to do so.
1. Who are you targeting?
Market to a more affluent demographic – you may have started out marketing to anyone and everyone who happened to be looking for a great deal in order to get your name out there and gain traction in the market. Now it’s time to take a more targeted approach; maintain your marketing outreach to lower-income customers, but also divert some of those marketing dollars and begin reaching out to more affluent customers. They can afford more and are more likely to pay your higher prices if the item provides substantial value.
2. Updating your image
Upgrade your clout and image – the difference in buying a name brand like Toshiba over a generic product is that an established brand is seen as a leader in the industry. Leverage your tenure, quality of product and respectability when pitching to a client or going head to head with a competitor. If customers have given you numerous positive reviews, mention that.
The constant reminder of your solid reputation can help customers justify paying a higher price for your service because they know it’s worth it. Also make sure your products and services are marketed in the best way possible – choosing a clean venue with attractive touches, engaging messaging and so forth – to show that you have invest, and put thought into how your business is perceived.
3. Presenting your product or service
Cross selling - A great way to increase your prices is by bundling your products or services together. Combining two related purchases, albeit at a slight discount, will still increase revenue. The slight price increase will be obvious if the customer opts out of the bundle, but the likelihood is that they will either go for the bundle because it’s a great deal, or go for the single purchase and feel that they’re saving money as it’s cheaper than the bundle.
Starting your business with low price points is fine when you’re first starting out, but you will eventually may have to increase prices in order to correlate with the level of work you’re putting in. If you’re producing high quality deliverables in a way that no one else can replicate, the price will always be worth it.