The pricing process is essential in the company and has several financial facets and strategies. It is not enough to just raise costs, but also to do break-even analysis, review business models, and also map competitors' moves.
See also: Complete Pricing Guide
Moreover, there is also the human and instinctive side of using the best strategy possible to communicate with the customer the attributes of the product and service and to position the company in the market imagination. In this post, I'll give you 5 tips for choosing your pricing strategy ideal:
- Study Your Customer. This is the first step in defining any business strategy and pricing is not left out. The more your price communicates with the desires and fears of your customer when buying your product or service, the better your outcome. One method that may help at this point is to draw the persona of your client.
- Do not skip steps. Pricing has 5 large steps that are always applicable and necessary: costing, supply and demand analysis (break-even point), business model definition, competition analysis and positioning. Always pass by everyone.
- Understand Your Market. There are several methods and models of market analysis that can help you define a more assertive strategy. Some examples are: 5 Forces Porter, PEST Analysis, SWOT analysis, Matrix BCG, GE matrix.
- Know Your Options. Many managers have already gone through the same situation and various methods and options are already available. Research and find out what the most famous pricing strategies, especially in its sector.
- Run Tests. There is a certain perception that business decisions are made in a meeting and carried out without review. Nothing could be more damaging to the business. Make small tests of your strategies, collect feedback from your customers, and increase what went right.