How to Price Your Product or Service

How to price your product or service

In today’s dynamic and competitive business landscape, knowing how to price your product or service accurately is critical to success. The journey to success is paved not only by developing exceptional products or services but also by implementing a well-thought-out pricing strategy.

As a business owner, understanding how to price your offerings effectively is paramount to attract customers, maintain profitability, and establish a strong market presence.

Owner Manager Program Market and Brand Strategy subject specialist, Damien Rossi, shares the rules around “pricing knowledge” to help you accurately price your product or service.

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When it comes to pricing, there is a lot to learn, including; 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:

  1. Understand the value you offer.

  2. Replace discounting with pricing confidence.

  3. Apply one of three simple strategies: Skim pricing, neutral pricing, penetration pricing.

  4. Play better poker. Everyone wants value but not everyone will pay for it. Understand your customer to know what they’ll buy.

  5. Price to increase profits.

  6. Add ‘new’ components to boost negotiations. Innovate for growth and then price for profit.
 

These approaches are relevant in both B2C and B2B environments. Damien explains that 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? Damien suggests you start by researching ways to create more value-adding components, at little cost to you.

“You must understand how buyers divide up value so you know where your offering stands”.

He adds, that if you don’t already, you should consider investing in a pricing specialist and continually review your pricing on a regular basis.

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 business’s bottom line.

If you are the owner of a mid-sized business in Australia and looking to learn more about pricing, and other practical business growth strategies then the OMP may be right for you. Clink the link below for more information about the Owner Manager Program. 

The OMP is a highly practical and results-driven program exclusively for owners of mid-sized businesses with annual turnover of $3m – $100m. 

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