How to Use Profitable Pricing Best Practices to Grow Your Business

Sherry —The Biz Starter Author

Nov 11, 2023 |

Every entrepreneur has struggled with pricing at some point. 

Deciding what price to set for your products and services depends on several factors. 

If you sell a physical product, the first items that come to mind are costs for the materials and the cost to build it—but this is not what you should solely base your price on.

The best way to get to profitable pricing is to align the price to its value first. Next, you’ll want your marketing to spotlight the unique value of your product or service to your customers. Pricing strategies involve more than what you believe your products and services should cost, so let’s dig deeper.

Below are six pricing strategies you can use for your offers.

1. No Value—No Offer

Without value, you literally do not have a viable offer. The value of your offer is the perceived benefit of the product or service to the customer. To perfect your pricing, you’ll need to know the value of your products and services and be able to communicate them to your customers. Examples of value include saving people time, money, frustration or solving a specific problem. Know how your product or service makes life easier for your customer. Also, understand how your product or service will make your customer feel. The uniqueness of your product or service and how it differs from similar offers is what makes your offer valuable. This is referred to as the unique value proposition. This is equivalent to a statement of promise to your audience of how your offer will enhance their lives. I talk more about this in my training. Once you’ve nailed your unique value proposition, you can focus on something a potential customer can wrap their arms around—a value-driven price.

As a salesperson, entrepreneur, creator, etc., it’s only natural to want to highlight the features of your products and services. When listing the feature, make it clear how the features represent the value of your offer. For example, if you sell your copywriting or marketing service that creates marketing campaigns. This is a feature. 

Further explain the benefits, like how your service saves your customers time so they can do other things in their business. Include how your customer can easily see what content is attracting customers so they can make better campaign decisions.

2. Competitive In Your Market

To avoid making mistakes with your pricing, be sure you are familiar with your competitors with similar products and services. You must be able to explain how your offer is different from your competitor's. Your low price should not be your selling point. Again, focusing on being unique help remove doubt when a person is deciding if they want to purchase your offer. This is especially important if your potential customer has purchased a similar product or service. They will pay close attention to what makes your offer different. Make this unique value proposition easy for them to find in your sales copy.

3. Customer Buying Power

I’ll let you in on a little secret…the value of your products and services is up to your customer, not you. Yes, really! It’s important to have open communication with your audience and potential customers about what they find valuable. Do they need to save time on a particular task? Are they having challenges with a particular tool? Find out what problem they need solved and focus on providing a valuable offer that will blow it out of the park. You’ll also have to pay close attention to customer feedback so you can make improvements.

4. The Price is Right

The old saying goes, "The best way to know if you have the best price is if you are making sales." There is some truth to this. You know the price is right if your target audience pays for your offer after they fully understand the value of your products and services. Do your research early so you won’t have to flip-flop on the prices. Potential customers do not want to see constant price changes. If you do not see the sales conversions you want, avoid lowering your prices because you think a lower price will attract more buyers.

Lowering your prices is not a good long-term strategy. Remember that if you undercut a competitor, they may have more resources, return the favor, and lower their prices to capture your customers. Instead, keep your prices the same and add more value. This could make your product more straightforward, faster, and more quality. Or simply increase your prices and position your products and services as higher quality.

5. Less Selling To Get More Sales

Once you’ve mastered communicating the unique value of your products and services, converting leads into customers is much easier. This way, you can spend less time selling and more time counting your sales. 

You may want to reconsider your pricing or offer more options to the customer, but only do this after you’ve analyzed your ideal customer, the market, and your products and services. The end goal of getting to profitable pricing is to show your potential customers what your products and services will do for them, decide if it aligns with their needs, and align the value with the pricing.

Wondering what perfect pricing should look like for your business or have questions? Let's talk.

Categories: : Biz Growth, Entrepreneur Tips