10 Common Pricing Mistakes That Are Costing You Customers and Sales
How To Win Tons Of New Customers by Avoiding Incorrect Pricing of Product or Service?
I do not want you to continue on a negative trend when planning your products or services pricing.
This is why I want to tackle the most common Pricing Mistakes and reveal to you a proven strategy and the relevant steps To Price Your Product For Maximum Profits.
Incorrect pricing of product or service – the pricing mistakes.
1. Making a single price point for the product.
The whole value of the product is measured by the niche and all the different accessories. As you know, each of the accessories is selling for their different price tags.
So, the challenge here is to have a single price point. You need to match all the different accessories with the different niches.
Yes, I mean all the niches that each of the accessories is sold to.
2. Fluctuating prices every month or every two months.
Think about it! What would your product be worth if there was no market?
Or, what would the product be worth if there is no competition?
Therefore, the sooner you figure out how to effectively measure the market value of your product, the more your customers will become loyal and the closer you are to profitability.
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3. Hold prices at the same level for too long.
Another example of incorrect pricing happens when you ignore the changes in costs, competitive environment, and customers’ preferences.
While we do not advocate changing prices daily, the fact is that most businesses are afraid of the uproar that a price change will cause and delay it as long as possible.
It is critical to recognize that the value proposition of your products shifts in response to market changes, and you must modify your pricing to reflect these shifts.
4. Pricing Too Low.
If you are not satisfied with your current selling price, then what can you do to raise it to a maximum?
The answer is relatively simple: Price a product or service at a higher price than your competitors, but not as high as you think you need.
If you have researched and identified your competitors’ selling prices, you will know how to price a product.
Keep in mind that the cheaper product may not generate the best sales volume, but even the lower price may turn out to be effective to take some of the market shares from your competitors.
Pricing Too High On the other hand (you may have the best product in the market), you still cannot make your product sold. At that moment, there is a price limit you should not cross. Overpricing may have the same results as underpricing.
5. Pricing Too High.
I am not saying this is wrong!
Of course, if you ask $10,000 for your service, it’s fair and reasonable.
However, as a matter of principle, it is one of the most common mistakes of businesses.
Today, everyone is looking for extra money to buy goods and services, so it is completely natural. Yet, the more you increase the price for your product, the more sales you will get.
It will always be just temporary. It is a good idea to try to increase the price in the short run, but in the long term, the probability of getting more sales is very low.
You can always go lower, but why should you give your customers more time to look for a cheaper deal?
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6. Not Charging Enough For Your Unique Value to Double Your Profits In Record Time!
This one sounds obvious and seems so right!
But if you do not charge enough, you could be killing your business.
This is why you have to be aware of the current market environment and maintain a perfect balance between pricing your product and ensuring a profitable client base.
In reality, you can charge even more than the average as the general public will always underestimate you. But, if you are constantly in the bottom half of your industry, your pricing strategy will be outdated, and your business will likely fail.
When you charge too little, the client will feel the product is inexpensive or of little value. But if you charge too much, you will just feel taken advantage of or that you have been ripped off.
In this era, the Internet is our primary buyers’ personality mouthpiece.
And with this fact, you need to charge your product or service just about to stay competitive in the market.
That’s why the best pricing strategy is to build a product that’s much better and more affordable than the rest. Remember to break even, but don’t charge more than what the market can afford.
7. Fail to establish internal procedures for price optimization.
In some businesses, a hastily called “price meeting” – a last-minute meeting to set the final price for a new product or service, or a semi-regular audit of the company’s price list – has become a regular occurrence. In this scenario, the last-minute meeting leads to incorrect pricing of product or service.
Price optimization data is derived from in-depth research. The survey is designed and conducted by professionals. They know what course of action to take and how to extract the information needed for the pricing project.
They have prior experience structuring questions, questionnaires, and data to uncover the most pertinent aspects, inconsistencies, and, most importantly, the values perceived by interviewees.
8. Pricing Strategies to increase the dollar amount of every sale.
As a graphic designer, I can tell you that pricing is a big factor in success in the world of the graphic design industry.
When your product is selling like hotcakes, your revenue should also be growing.
A sustainable and consistent sales growth means that you are on the right path.
What is more, this amount of revenue will lead to bigger opportunities for you. And, as a graphic designer, I am aware that each design has unique characteristics.
Therefore, you have to come up with pricing strategies that suit different products. And to be more successful, you have to separate your products into different categories so that you can price each one separately.
9. Pricing Your Product For Maximum Profits.
Selling your product for the same or higher price than you ask for it is not a good idea. Many of you might be well aware of this horrible situation.
You go to buy a product or the services you have in mind, and then you spot that your chosen products or services are much cheaper than what you can pay in your mind.
You don’t want to compromise on the price you ask for or move up for this product because you just know it is what you want. Somebody else can come along and buy it from you. You are not even sure why the person did it.
They were suckers or just had a few extra bucks in their pockets. This is one of the worst pricing mistakes that you can make. Even if the product is the cheapest one out there, price it on a higher level.
10. The majority of a company's time is spent serving its least profitable customers.
Most businesses have no idea who their most profitable customers are. While 80 percent of a company’s profits are typically generated by 20 percent of its customers, a careful examination of the data often reveals surprises. A company’s largest customers are frequently only marginally profitable.
Companies that fail to identify the right product price and focus on their most profitable customers are vulnerable to larger competitors.
Planning the pricing of your products can make a huge difference in your business growth.
Incorrect pricing of product or service may change the game for you and your customers.
The question is whether or not you have a strategy in place.