THE MOST EFFECTIVE STRATEGIC PRICING SOLUTIONS

In every business, pricing of products or services is very
important and determines whether the consumer will buy the
product or service. A major challenge for many business owners
and sales managers has been how to set the “right” price which
the consumer will deem acceptable and hence purchase the
product or service. How do you get away with your ideal price?
Can you cap your price at a relatively higher or lower price
and still remain competitive? The answers to these questions is
not one-fold or straightforward as it may seem to appear. Below
are some of the most effective ways of pricing your products
and services.

The Left Digit Effect

Extensive research has been done on consumer response to
different pricing and it has been discovered that the left
digits of the price tag do matter. For instance, consider an
item being sold at a flat rate of $150 in one store and $149.99
in another store. Consumers are highly likely to go for the
product that is priced $149.99 as it seems cheaper than the one
priced at $150. How come this is often the case? We often tend
to read figures or digits from the left rounding off to the
nearest whole number. For instance, 15, the first two digits in
the price tag, is closer to 20, while 14, is closer to 10 than
20. The item priced at $149.99 is deemed to be relatively
cheaper than the one priced at $150. Action: Always
incorporate odd pricing when launching products or services.
The odd pricing strategy will camouflage your products to
appear cheaper than they really seem to be.

Price Comparison

This is another brilliant strategy that involves comparing
prices of similar products or services on offer. In comparing
prices, you need to be very keen on the variations you set on
your products or services. Consumers often view the difference
in pricing as resulting from additional features of the
products or services that have a higher price, and if this
distinction is not clear, the consumer may opt not to buy any
of the items. Ensure that you avail as much information about
the product or service the buyer intends to purchase, while at
the same time offer an alternative product or service that is
similar but has additional or minimal features and relatively
higher or lower in price. Due to the ample information
provided, the consumer will base their purchase decision on
that information.

High Quality Products and Services aren’t Cheap

If you have ever thought keenly about it, we tend to judge the
quality of a product based on the price tag. If it is very
cheap, it’s probably not a quality product. If it is expensive,
it is definitely a quality product or service. We tend to
appreciate products or services more if they are expensive. It
is vital to keep this in mind, especially if you opt to compare
your prices with those of other competitors. If your products
or services rank low in terms of price, consumers might deem
them to be of poor quality and hence may avoid purchasing your
products all together.

strategicpricing

Conclusion

The price of your products or services is vital and you must
always implement creative strategic pricing in order to
increase sales.