May 01, 2018 The 5 Myths and Mistakes of Pricing – Myth #1
Myth #1 – You need to price at or below your competitors.
Especially for small companies, you need to differentiate your company and its products and price based on perceived value. Let’s face it, you will never be the low cost provider so any strategy to sell at the lowest price when your costs are not the lowest, is doomed. In fact, if you seriously think that might work for you, just send me a check now for all the money you want to invest in that idea. It will save so much time.
Differentiation is at the heart of both your business strategy and your marketing strategy. You need to have a clear idea of what you are going for, how you can achieve it and that your points of differentiation are based on something real. For example, it you don’t think you can achieve a really great service level (because of the staff you can hire or whatever), don’t base your differentiation strategy on service. If you can raise the perceived value, you can charge more to the segment of customers that values what you are offering.