How Should I Price My Products?
Ron Babich
Founder ProStar AI Powered Service Network | Business Growth, Peer Networking, PMP,PMI,DTM
A CEO/Founder asked me today about how to price a new product in their market. A good rule is to first identify where YOU want to be in the market, and how you want to be seen. Are you a Cadillac or a Chevette? If your a Cadillac, your worth more. Find the highest price range, back off 5% and start there. When you charge more, people know your worth more.
Let the market determine pricing by the demand your getting. Increase pricing every 90 days when you get the right spot by 5 to 10%. Raising your price on a schedule, perpetually, shows your company is gaining value and your reinvesting in your product. (and...your existing customers will be happy they signed on with you earlier when they received the best price).
And...even though there is science behind pricing, ultimately there is no such thing as a ninja expert on the topic. The only expert is your customer and the market you've decided to be in.
Chief Marketing Officer | Strategy | Analytics | Technology | Leadership Turning Opportunities into Profitable Growth
4yThat said, there are tried and true methods for evaluating market perceptions to assess what people will think is "too expensive" or "too cheap"... When introducing a new product category (for which there are no ready-made price benchmarks), I recommend using the Van Westerndorp method (https://en.wikipedia.org/wiki/Van_Westendorp%27s_Price_Sensitivity_Meter)