Pricing Strategies – Cheapest Ain’t Always the Best

Is pricing an Art or a Science?  The Vancouver Chapter of Enterprising Moms Network discussed this last night – our topic was on Pricing Strategies, presented by Michelle Tice of Savvy Mom Media Inc.  Pricing comes up very often in my coaching sessions, and I wasn’t surprised to see lots of questions, suggestions, and feedback surrounding this topic.

Here are some take-aways from the session:

  • Don’t strive to be the cheapest unless you have the lowest cost i.e. unless you are Walmart, it’s hard to be the low-cost leader, especially as a small business.
  • Don’t lower your price automatically when your products don’t sell.  Are you sure it’s pricing?  Find out why your customers aren’t buying.  Could it be that they don’t even know who you are and what you sell?  Is it an awareness issue?  Quality?  Brand perception? Lowering your price won’t help generate demand if there are other factors in play.
  • Instead, focus on value-adds: your customer service, your flexibility, your response time, your consistency, and ensure these are conveyed in your messaging.

And finally, if you do have to lower your price, ensure that you are not creating buyers’ blues for your existing customers.  Make sure you create a fence offer, either through limiting value-adds like free shipping, refunds and exchanges as some examples, for your sale products, so that you don’t undercut those who already bought from you.

Thanks for the great insights Michelle!

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