Do you find yourself in a position when you don’t know what to do when it comes to choosing the right pricing strategy for your products and services? Probably you have a lot of pricing questions. Don’t panic, it happens to most of the entrepreneurs.
Setting up the right price for your products and services or choosing the right pricing strategy is one of the most sensitive things you need to do in your company. It is normal to have different pricing questions you will need to answer.
If you have the low prices you will leave money on the table and what is more important you risk to lose profitability and a better future for your company. If you set high prices you will start losing some of your current customers.
So, the pricing dilemma is always reality to you. What to chose? How to decide in order to not make a mistake?
When you find yourself in a position of pricing dilemma at that moment everything you look at the possible direction for your company will seem to you as right and wrong direction.
Here, I would like to share with you some pricing questions that you will need to think about the answers when you are in a pricing dilemma position.
1. What Do You Sell to Your Customers?
The first question from these four pricing questions is related to your offer, or better said your total offer. What you sell to your customers? Think about this as a first thing before any other decision related to your pricing strategy and pricing dilemma you are experiencing now.
If you sell only products and services that solve basic problems without any additional value added services, then you can choose the low price strategy. But, if you sell high level products that solve important problems for your customers packaged with additional value adding services, and total customer’s experience than you can think about premium pricing strategies.
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2. What is the Uniqueness Level of Your Products and Services?
The next question is related to the uniqueness level of your products and services which you want to set prices. This uniqueness level can be shaped with several elements, some of them are the following:
- Uniqueness of the problem that your products and services solve to your customers.
- Uniqueness of the customer’s needs that can be satisfied with your products and services.
- Current existence of similar solutions on the market.
- The level of a customer’s desire for the solutions that your products and services offer to them.
If the uniqueness level is high for your offer, then you can simply choose the premium, or high level pricing strategies.
3. What You Want to Achieve With This Product or Service?
Many times pricing dilemma can be removed if you know what you want to achieve with the specific products.
If you have prices of products and services that represent your front-end product as an entering level than you can setup lower prices. With these products and services, you are attracting customers in order to offer them high level back-end products with the higher price.
4. Who Are Your Target Customers and What They Really Want?
Do you know your target customers? Are they someone who can afford themselves to pay higher prices for your products and services? These questions and their answers are important in removing yourself from a position of pricing dilemma.
If your target customers can’t afford high level pricing strategies, than you will need to think about other pricing mechanism or simply change your business model.