How to set a pricing strategy
The importance of setting the right price is as crucial as the service your business offers. Setting a pricing strategy takes time and is not an easy enterprise. You could say there is a certain art to it. Even if the magic number is 100, other factors affect the strategy.
But what are the points one should keep in mind when establishing a pricing strategy? What questions should be asked?
Worry no more, Wael Abdelrahman’s Business Power Session was here to give a clear roadmap and we gathered all the tips that should put you on the right track to dealing with your pricing issues.
Why privilege price over quantity when I can just produce more to gain more? It is worth highlighting that the price’s effect is more important than that of quantity. It is thus a change in pricing that is more likely to impact your revenues. Moreover, increasing production requires more budget and this better be avoided.
In what way is the pricing strategy related to the offered service?
In this regard, businesses that offer a unique selling proposal have an undeniable advantage. Clients are be able to compare their prices with those displayed by competitors since they aren’t any.
Is there any risk in changing the price of a certain product after it’s been launched and adopted by the public? Changing the price of your products and services might kill a business. But because there is no magic formula, one must primarily know their clients behavior. For instance, people are more sensitive to price if you sell a commodity. As for designer pieces, they are as inelastic as it gets
What’s the rule of thumb when it comes to pricing? There is no rule but there are imbedded techniques. Firstly, you should always calculate the exact cost of products and include all overhead charges.
Also, check the map. Decide where you want to stand and what competition is charging for the same services.