Don’t Sell Yourself Short: Do You Need to Raise Prices or Reset Your Strategy?

Throughout my own entrepreneurial journey, I’ve watched other entrepreneurs approach product/service pricing in one of two ways: 1) They charge top dollar for their offerings from the get-go, or 2) They struggle, feeling uncomfortable and unsure about how to set their prices, so they low-ball themselves. But in order to get maximum revenue, you need strategic pricing, not emotion-driven pricing. Here are some tips about how to set pricing in order to keep profitability high – and feel confident about it, too. 

Know Your Worth

Before you start even thinking about hard numbers, think about what you have to offer. Is your nutritional supplement product certified organic, ethically sourced, and a level above everything else on the market? Are your massage services specialized and unique, crafted around decades of experience? When you have something valuable, you need to be all-in on believing in its value or you’ll end up selling yourself short. 

Look Around 

Next, perform a competitive audit. Research all your closest competitors and take a look at how they charge for similar products or services. If their prices are gated, see if you can fill out a form or request pricing without giving away your identity. The more competitors’ pricing you can access, the more complete picture you’ll have of the market. 

Choose A Path

There are many roads to monetary success and business growth, but two in particular are known strategies: 

1. The first is pricing based on your products or services being premium. When you go with this type of strategic pricing, you set high prices (compared to competitors’ prices) with the understanding that you’ll end up with fewer customers. After all, fewer people tend to pay expensive prices. But, the lower volume doesn’t matter too much because of the incredible profit margins you’ll be getting. Also, if your target audience includes folks with plenty of disposable income, you could even have a larger customer volume and great profit margins, which is the best of both worlds. 
2. The second version of strategic pricing is marketing yourself as the cost-effective, affordable option. You still don’t want to make yourself sound cheap, and you want to charge for what you’re worth, but you lower the barrier to purchasing your products/services. This way, you position yourself to have a higher volume of customers. This volume will theoretically balance out slimmer profit margins. 

So, you have a choice. How do you want to be positioned in the market? Which strategy better serves you, based on your industry, customers, and offerings? If all the competitors in your industry are marketing themselves as affordable, you may want to go the premium route. On the flip side, if your competitors’ prices require customers to sell their homes in order to purchase their products, you’ll likely have a better fit with the lower-price, higher-volume approach. 

The Push and Pull 

If you realize after setting prices that you’re not making ends meet, you need to raise prices. If you start charging more and your volume of customers doesn’t change, keep going – gradually and consistently. Stop when you feel resistance. You’ll recognize resistance when you see a dropoff in customer volume, or when customers communicate displeasure about the increased rates. You can always go back down a bit to the price point right before the resistance set in. 

Figuring out your ideal pricing is both nuanced and ongoing. You may get into a groove for a year or five, and then realize something needs to change. Be willing to be fluid, keep an eye on the competitive market and make changes as needed to serve you and your customer best. This is the best way to avoid selling yourself short, and keep profitability at its peak.

Now, more than ever, it’s the time to know your worth, charge accordingly, and deliver and exceptional experience. Give me a shout if you want some help!