This course was created by EntrepreneurNOW. We are please to offer this training in our library.
- How customers perceive price and value
- What will customers pay more for?
- Why is pricing important to investors?
- Choosing a pricing model for your business
- Determining your pricing flexibility
- Justifying higher prices in a competitive market
- Ways to add value that boost margins, not costs
Skill Level Beginner
- "Price is what you pay. "Value is what you get." I love that quote because it says everything about this entire learning stream that we're going to talk about, which is how to create value. How to create value in your pricing strategy so you can get higher profits and higher margins, which is really important. The more value that you create, the higher your price can be, hence the higher your margins can be, and more profit that actually flows to the bottom line. That's a critical strategy that we're going to talk about through this entire learning stream. Now, understanding a little bit about what I want for you is I want to make sure that we get the ideal price for you. Set the ideal price for the market so that you can have as many customers as you can possibly get, but also get all the benefit, all the hard work that you've put into your product or service, you get all that value back to you as well. All right? Let me share with you one company that I work with called Ecospire. And these are two entrepreneurs out near Colorado, and they have a business that basically is like a marketplace that brings together brands and resources all around the world for eco-friendly products like eco-friendly materials and fabrics and other things. So, they work with resources around the world and bring those to brands that actually need fabrics and materials to build eco-friendly products. Now, what I did is that, as we were working with them, I suggested to them, "Hey, how can we add value "in this overall process?" Because right now they're charging a matching service. Essentially they match these two services together. And, you have to subscribe to their marketplace, and it's about $1,000 a year for a brand to do that. What I suggested was, "Hey, why don't we add some education? "Because this is kind of confusing for these brands "to kind of figure all this out. "Also, let's add maybe one or two hours "of consulting over the year where they get "personalized service from you, "because you guys are experts." So, on demand education, which is actually very inexpensive to add to your overall product or service, and consulting hours, added together brought their price from $1,000 a year to $5,000 a year. And it didn't cost hardly anything to add that extra service, but the value that the customer received was so much higher, and that's what we want to get to. I want you to get familiar with some of the things that impact your pricing strategy. Because we're going to use these throughout this entire lesson, and you're going to use them throughout your entire business, right? So, the first thing is like margins. We have to know our margins. We have to know what our product costs, how much we make on every product, each product or each unit that we generate, or service that we provide. Very important. We have to understand our competition and what the range of pricing is out there for our competitive landscape. We have to understand our market as well. How about things like uniqueness? How unique is your product or service? How scarce is your product or service out there in the marketplace? The more scarce, the more you can charge, potentially. And also we need to look at what customers will spend. What are they willing to spend? What is the perceived value that they're actually going to get from that. Which is really important, overall, to look at. So, don't get too confused. There's going to be a lot of things that we're going to kind of throw into this mix of variables and influences that will influence your pricing strategy, but out will come an ideal price from it, I guarantee.