Does perceived value = true value? Determining pricing should not be a game of Russian roulette… Owner Manager Program Market and Brand Strategy subject specialist, Damien Rossi, shares the rules around “pricing knowledge” to accurately price your product or service.
When it comes to pricing, there is a lot to learn… How to price your offering, what you need to understand about your customer and the ways to increase profits. Damien has six key rules for pricing:
- Understand the value you offer.
- Replace discounting with pricing confidence.
- Apply one of three simple strategies: Skim pricing, neutral pricing, penetration pricing
- Play better poker. Everyone wants value but not everyone will pay for it. Understand your customer to know what they’ll buy.
- Price to increase profits.
- Add ‘new’ to boost negotiations. Innovate for growth and then price for profit.
These approaches are relevant in both B2C and B2B environments. You must have confidence in the value your offerings create, be able to clearly define this value and then negotiate effectively. Looking to increase profit? Research ways to create more value-adding components, at little cost to you. If you don’t already, consider investing in a pricing specialist and continually review your pricing. You must understand how buyers divide up value so you know where your offering stands.
Damien Rossi is one of the Owner Manager Program (OMP) subject specialists in Marketing and Brand Strategy. Pricing is just one of many topics discussed in OMP that makes a direct impact on every businesses bottom line.
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