Pricing products accurately has always been a top priority for business owners and marketers. Ineffective pricing could hamper the ability of a business to grow and become profitable, even if you have an exceptional product and marketing strategy. So how could you make certain that your offered prices are optimized for success in an immensely competitive pricing environment? Address these considerations first and go from there.
1. Determine your competitors
Determine businesses that you think you’ll be competing with so you could use them as a benchmark, and then track their pricing strategy ideally using price tracking software such as PriceManager.
You need to be aware of how your competitors operate, what they offer, and their prices. This would help you begin to understand why your competitors are selling their products at a certain price point so you could then start developing your own pricing scheme.
2. Master perceived value
Perceived value is essentially what drives people to purchase certain products. For instance, many online shoppers buy products from Amazon because they think that they are getting the most value for their money there.
While this might be true in most cases, even if it’s really not, they would still shop at Amazon because of this “perceived value.” The thing is, establishing perceived value with regards to pricing could be somewhat difficult and would require in-depth analysis of huge amounts of data in order that you could truly pinpoint which option is the most appropriate for you.
To start, think how target customers would respond — would they respond better to higher prices thinking that they would get higher quality, or reduced prices because they love bargains?
3. Implement a price monitoring strategy
It’s simply not humanly possible to monitor prices of various products and competitors without the necessary tools. Fortunately, there are tracking tools out there that could give you reliable information that you could utilize for making timely and more effective price adjustments.
Implementing a competitor and price monitoring program would go a long way towards helping you track your competitors in real time, and then use the analytics you gathered to give your business a leg up over the competition.
Monitoring your competitors could be very challenging. Add to that dissecting and analyzing copious data to understand if your pricing and perceived value is right thoroughly. Done right, however, with the most appropriate tools at your disposal, you could create the best pricing strategy that best fits your needs.