Janine Liston, a business strategist and pricing expert, joined me for a conversation about the complexities and strategies behind setting the right price for products and services.
Here are a few key takeaways:
- One common myth is that the lowest price always wins. Many business owners believe this, but it’s not true for most products and services. Targeting the right customer who values your product is more important than simply offering the lowest price.
- When you set your price, you need to put the customer first. Rather than developing a product and then finding customers, businesses should understand their customers' problems and create solutions tailored to them. This approach ensures that prices reflect the value delivered to the customer.
- What's a fair price? It is actually a balance between what customer are willing to pay, and what is profitable for the business. Many businesses overlook customer value and willingness to pay, focusing too much on costs and competition. Sometimes, customers are willing to pay much more than you think.
- Price can often communicate messages about your quality. A higher price signals higher quality, but this only holds if the product or service meets those expectations.
- Pricing is not a one-time task but a continuous process. Be open to adjusting pricing over time and don't be afraid to raise them when necessary.
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