Any new business venture means making tough decision, price being one of the hardest. As a small business of course you want to maximize revenue and increase profits. However to do this whilst keeping in mind the real value of the product AND the price your are charging is a whole new issue.
Determine the points of parity of your product and those of your competitor. Deciding on which points to differentiate can be hard for a small business. Competing on the basis of price can be even harder. However being a smaller business comes with its own perks specifically customization of the product. Due to having a smaller customer base the company can really focus on the needs of the customers and their needs in terms of value for money.
Minimizing the number of steps to get started using the product increases customer satisfaction of the pricing schemas. Simplification of the paying process can involve reducing the number of steps or using recurring pricing model rather then invoicing. This ensures that the customer is a aware that the company respects their time.
Introducing a variety of pricing options can help your business target multiple customer segments. The choices ensure that the customers can choose the one that matches their preferences in other words – opportunity cost of saved time.
Welcome Feedback and Testing
This takes us to the next point pricing schemas are not static. Through encouraging customer feedback and testing, companies can truly learn from their customers. Testing different pricing schemas and asking for customer feedback not only on the product but the price, can save the company time and money on pursuing sales of something the customer does not want.
Providing support for your customers
Many companies in the chase after profits forget the most important aspect of any business: sales, or effectively – customers! Answering any potential questions that customers have about pricing or the product itself is key. Ensuring that each customer is treated with the utmost respect will ensure his or her commitment to the company in the long run.
Change Customer Perceptions
Loyal customers can be a means to expand your network of connections. Customer commitment can help to change potential customer perceptions of pricing on the product.