When is your price wrong? A simple test to check. | Willem Gous

When is your price wrong? A simple test to check.

Is the price for your product or service the right price? If I had a Dollar for everytime that a business owner asked me that question then I would be a millionaire by now. Pricing is a BIG topic and I cannot cover it all in 3 minutes. However, I have two simple perspectives that you can use to see if your price is wrong.

I assume that you have followed the correct product development and customer development processes when you created the your products or services. If you have not then you are faced with too many variables. That is why the product development process is important, it systematically knocks out uncertainty.

#1. When nobody is buying, then your price is wrong

If nobody is buying, and you have followed the correct procedures in creating the product or service then something it wrong. Maybe the price is too high or it is in the wrong market. Maybe it is a feature. Something is pointing to customers NOT wanting this product and it can be a sign that your price is too high. Remember, clients will only give you money if they see value in the product. They are not seeing the value in it now.

#2. When everyone is buying, then your price is wrong

You are losing money and a lot of it. A certain amount of customers has to say no to your offer. It can be 30 or 40% but you would know what is best for your industry. If you don’t then start raising your price so that you can at least see where people will fall off. You will see your profits rise when you do this. I apply this in my business, if too many people say yes to easily then I raise my price. It means clients are seeing more value than what I am charging for and then I increase until I get a drop off again.

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Willem Gous

13 Mar, 2018

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