by Patrick Lefler
Pricing is important, but short-changing your pricing strategy is the fastest way to leave money on the table—revenue that will be lost forever and never recovered.
So after that initial spark of innovation and the completion of the design, development and marketing phases that follow, don’t screw up the process by treating price as an afterthought. Have you spent as much time and resources on price as you have on your latest marketing campaign? (Probably not.) The most successful companies today know that pricing is strategic and critical, and that it can affect top-line growth and bottom-line profitability faster and more directly than anything else.
Pricing is a key element of your brand. It sends a message to the market and creates expectations about value. It’s often the first impression you make, either attracting buyers or repelling them. And it can create the last, and lasting, impression, depending on perceived value for price paid. Think about it: Is your price sending the message you intended?
Decisions about pricing need company-wide input and coordination. You need to be aware of the value you deliver to customers and how that value is perceived. Some things to consider are:
- Do you really know the value customers obtain from your services?
- In this difficult economy, what are the best ways to adjust price in order to survive?
- Is your pricing strategy aligned to what matters most with your customers?
- If price is cut to gain market share, what are the odds that competitors will follow?
Pricing is complex, but it doesn’t have to be overwhelming. Follow these six powerful rules for pricing excellence to find the pricing strategy that gets the most for your services.
Rule #1: Always price for value
Rule #2: Anchors aren’t just for ships
Rule #3: Never underestimate the power of FREE
Rule #4: Innovate with price
Rule #5: Let price drive value
Rule #6: Price wars are a fool’s game
Master these six rules and you’ll be well on your way to achieving pricing excellence. To learn more about these powerful pricing rules, a complementary copy of the SpruanceSolutions eBook can be downloaded here.
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Patrick Lefler is the founder of The Spruance Group – a management consultancy that helps growing companies grow faster. He is a former Marine Corps officer; a graduate of both Annapolis and The Wharton School, and has over twenty years of industry expertise.
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