Pricing is a strategy used in business- and has been since the conception of the startup company. The consumer market sets the price, but costs impact what your customers end up paying. It is safe to say that the market directly influences and determines the price.
Pricing is a strategy. Here are some common ones:
Dominate the Market
Be a leader in whatever market you are part of. Lower prices periodically- even if it results in short-term losses. Attract and maintain loyal consumers, which will help you build a reputation that enables you to dominate your market.
Charge a Premium
Are you able to market a premium product? This could manifest in a subscription service or higher quality offering than what you normally offer. This will set you apart as a premium brand, which may attract more consumers. Also, offer free trial periods or other incentives to lure new patrons to your brand.
It is a bit of a paradox since most buyers want the best deal possible, but there is a perception of getting more when paying a little higher price. What are your buyers willing to pay? If you are going with a maximum price strategy for pricing, you will need to know this. Do some market research to find out. When you offer a better, above-par, or premium product, you can usually fetch a higher price. It is that simple.
Lower the Price
Who doesn’t want a deal? Another pricing strategy is to offer a sale. That is, gradually lower your pricing over time to continuously attract and maintain customers. Take a little off the top to retain consumers- their loyalty will pay off over time and yield revenues.
Which pricing strategies do you use for your business? While pricing is a strategy in and of itself, consumers and costs influence and impact your prices. Talk to the professionals at Crimson Stone Capital Solutions to learn more.