Pricing for Value
Who knew??? Yes, indeed, value pricing is the backbone of your Business. If you are looking to make profits, it is important to focus on the value of your product, you want to “WOW” your consumer so he/she remain loyal to you.
Let’s talk value pricing: value pricing is the setting of a product or service’s price based on the benefits it provides to consumers. This method of pricing involves setting a price by which a company calculates and tries to earn the differentiated worth of its product for a particular consumer segment when compared to its competitor. Value pricing relies on the consumers’ perception of a products value, the more value a product or service has to consumers, the higher the price of said product will be.
Deliver value, the delicacy of your price will flow, your consumer will buy and stay:
Current fashion trends or the general feeling surrounding an item or idea can affect value pricing. In fashion for instance, if a particular designer becomes popular, the designer can charge more for the goods they create than if they were not as popular. Companies that offer unique features or services are better positioned to take advantage of value-based pricing than companies with products or services that don’t differentiate from those of their competitors. For example, a company that sells sweat-wicking, extra-padded athletic socks could use value-based pricing and sell its socks at a higher price, because it provides something unique and valuable to athletic consumers.
Market your uniqueness with no apology: Value pricing tries to find a price point that is as high as possible without causing too many potential customers to turn away due to the price. Another type of value pricing strategy is to offer some customers a discount. This may be based on the amount they buy or on how often they use a service. Airlines, trains and hotels use this strategy of pricing seats depending on when customers buy the tickets. When there are seats left to fill very close to the departure date, the airline is willing to sell these at a discount in order to fill the plane.
Remember: continue to do surveys, be a listener and learn, be curious. Do your research, check out what your competitor is offering do better without putting them down. Pricing is important, remember the right price can make all the difference between a full house and an empty house, or even a difference between profit and a loss.
References:
https://www.investopedia.com/terms/v/valuebasedpricing.asp
https://hbr.org/2016/08/a-quick-guide-to-value-based-pricing
http://smallbusiness.chron.com/value-based-pricing-strategy-2727.html
