1. When you have a product basically the same as all of your competitors, it is how you treat your clients that will make you stand out from the crowd. If you do what you do well for them, and go that extra mile in customer service, your clients with actually pay you for the experience of doing business with you. When you make it easy to work with you, they feel they can trust you and are relived that they are able to obtain the product they wanted without hassle. Your price can reflect your reliability and client service, but keep it reasonable.
2. Be aware of the difference between what a client “perceives” as the product value and its “actual” value. Once you determine the break-even cost (actual value) of your product, you have established a base price. Now you need to focus on establishing the “perceived” value of the product to the client. The client usually knows the market price range of the product, so your job is to show the client your enhanced attributes of the product. You want your client to begin to “feel” that you are offering a product of greater value than what is on the general market. If you have developed a strong list of benefits and advantages to serve their need, they will “perceive” your product as worth more, and will be willing to pay more for your enhanced version. These unique attributes could possibly be an improvement you’ve added, or something your competitors have failed to point out, or even showing them how to more efficiently use your product to better fill their need.
3. Peer image often influences product purchase. The “in thing” has a great deal of emotional appeal. Know your target market and strive for an innovative way to tap into that perceived need.
4. Competing on price. Be sure you know what the pricing for your product, or similar product, is within the general market. If you undercut the going rate too much, not only are you undermining your own marketplace by diminishing the going price, but the backlash from your competitors might trigger a price war. No one ever wins a price war, and the one that ultimately comes out on top will be the larger company(s) with the deepest pockets. A idea is to not open that Pandora’s box at all.
5. Play fair. Many times we get so involved in breaking our services into multiple “options” we lose sight of how the client may respond. Yes, many times more can be collected by doing it this way, but keep it to a minimum. No one likes to be “nickel and dimed” so be careful not to over-do the options and their escalating costs.
Even though options can give you leverage as to what you will or won’t do without additional payment, if the client ultimately feels you aren’t playing fair, and not showing proper empathy for their needs, it will hurt you in the long run. You may consider it fair pricing, but if the client doesn’t – you lose.
Compliments of Lew West Business Consultants
http://www.lewwest.com/ Blog – http://www.mynext30.com/