For every product or service there is a sweet spot in pricing. In marketing they teach us to test different price points to discover it. (No one has figured out any other way to do it.)
However, there are other things to consider. For example, from John T. Reed I learned that the higher the price the more returns/disputes/problem customers you will get. So if you value your time, a lower priced product will make for a more peaceful business. (Especially for us who work alone.)
There are many other things to consider such loss-leaders, image, etc. I used to hate marketing but it is actually a fascinating subject when you get into it.
Back in the day, I managed the cheapest copy shop in Albuquerque, New Mexico. One might expect that students and locals would be grateful for the discount copies. On the contrary, we had the cheapest customers because we had the cheapest copies. We attracted all the most insane (literally), awful, argumentative customers in town. The kind who would, and did, threaten to kill you over a penny.
A high price connotes a high value and you get clients who match it more often than not.
For every product or service there is a sweet spot in pricing. In marketing they teach us to test different price points to discover it. (No one has figured out any other way to do it.)
ReplyDeleteHowever, there are other things to consider. For example, from John T. Reed I learned that the higher the price the more returns/disputes/problem customers you will get. So if you value your time, a lower priced product will make for a more peaceful business. (Especially for us who work alone.)
There are many other things to consider such loss-leaders, image, etc. I used to hate marketing but it is actually a fascinating subject when you get into it.
Good points.
ReplyDeletemyps.sitesell.com has a good survey product for finding your right price.
Back in the day, I managed the cheapest copy shop in Albuquerque, New Mexico. One might expect that students and locals would be grateful for the discount copies. On the contrary, we had the cheapest customers because we had the cheapest copies. We attracted all the most insane (literally), awful, argumentative customers in town. The kind who would, and did, threaten to kill you over a penny.
ReplyDeleteA high price connotes a high value and you get clients who match it more often than not.
As students in Lebanon, my mates and I deeply appreciated having a discount copy shop. Guess different cultures have different attitudes...
ReplyDelete