How to set your prices for greater customer value and higher profitability...

Pricing and small businesses

Pricing is one of the essential pillars of any business, yet it is an area often ignored! For businesses offering more than one product or service, an ideal way of setting pricing is developing the prices based on a menu of services/products.

For many small businesses, however, setting the price is a huge challenge and sometimes may be caught in a price war as customers use the threat of moving to the competition to drive prices down. Here are a few tips to get you started on providing greater value AND run a profitable business.

Pricing tips

1.   Decide on a pricing strategy for each product or service offered by your business, For business owners offering products for sale, your pricing strategy can use as a starting point the price of inputs or wholesale for goods that are resold. That, however, cannot be the only basis as you need to consider which end of the market you are targeting, e.g., low price vs high value.

2.   Simple pricing strategies that small businesses can consider, whether offering goods or services, are:

i) Value-based pricing

ii) Low Introductory Price

iii) Promoting Customer Loyalty

iv) Brand influenced pricing

3.   Make sure that you have a range of packages for different budgets. This makes it easier for their clients to choose which of the three packages suits them best.)

More tips to follow in subsequent posts.
Comment on the blog and share how you set prices for your products and services.
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