Have there ever been more options for pricing than there are today: one day deal sites, online pricing, freemium, optimised pricing, auction sites are just a few of the possibilities for setting a price, and an impression. So if first impressions count, then what are you telling your customers?
But of the four P’s of marketing, price usually receives far less thought than the other three. Not only does the price of your product or service say so much about what you are offering but it’s so important to your business’s survival.
If you have a new brand getting the price right is often very difficult. And while there is some room and time to fine tune things the longer the price remains unchanged the harder it will be to adjust customer’s perceptions.
Your business may suit being involved in an auction site where people bid for seasonal products e.g. Buystand. Alternatively you may have a more perishable product in which case there’s a real benefit in selling each days ‘stock’ for the best overall profit you can. That’s where price optimisation can help. One company who work in this area are Pricetech. Their tagline appeals to me and gives you an indication of what to expect: revenue management and profit optimisation.
One thing’s for sure is that there will always be people willing to pay for the best, or even just willing to pay the most. This applies to houses, equally as it does for hotels, services, food, electronics … you name it. So depending on your product I’d always suggest seeing if you can get the highest price in the market. If your market share ambitions, brand, and the other elements of your marketing mix allow could you have a sustainable business by pricing as the most expensive? If not what’s involved to get there and how feasible is it?
But actually, you don’t have to have the highest price to get people wanting your brand. The point is that matching your price with the rest of your marketing mix will ensure satisfied customers even if customers pay very little for what they buy from you.
What about giving your product away? In the software game it’s called ‘Freemium’. One of the best articles about Freemium why and how comes from Techcrunch. On a similar vein I share thoughts in an earlier blog about Goupon type offers.
Go 2 Market principle: create the right impression with your customers by ensuring your price matches the rest of your marketing mix. You’ll create a positive impression with your customers and your bottom line.