I had the privilege of being on an Indie Business phone call with dM and Nunzo Bruno. He outlined ways that you could destroy your business. Of course I tuned it. Any helpful advice like this is always to my advantage.
One of the 7 tips that stood out to me was “giving away too much”.
How many of you find yourself here?
First Case Scenario
Do you find your prices lower than the “perceived value” of your special soap, super fragrance candle or your bath fizzies? Some may think that under cutting their competitors prices will gain them more sales, but the opposite is true especially if the “perceived value” of the product is high. Customers and visitors may start wondering WHY are their prices so low when everyone else’s is high. It gives your product a cheaper look and value.
The definition of perceived value is:
A customer’s opinion of a product’s value to him or her. It may have little or nothing to do with the product’s market place, and depends on the product’s ability to satisfy his or her needs or requirements.
- BusinessDictionary.com
Your market is dictating prices. If they are high, take advantage of it instead of undercutting.
Second Case Scenario
Maybe you have a huge following of customers with your lower prices. Your products are flying off the shelf. This is the perfect scenario for burnout. You are excited about selling your products, but you have to make a lot in order for you to obtain a nice profit.
Because of certain circumstances or your business might not be meeting your needs, you may decide that raising your prices would be the best way to fix your situation. Your loyal customers will bulk at the price increase. They will turn to the candle or soap maker that has the same price that you’ve increased yours to. This isn’t always the case, but it can happen.
You don’t want to lose any customer. Why lose them when you have already gain their trust and confidence in your product.
How do you avoid this situation? You do a little research in your market and look a the price ranges. Look at what the other candle and soap makers are doing. To help justify the price of your candle or soaps, sell on the benefits of your product. Let your customers know how your product helps them and will meet their needs.
Now if you are trapped in the lower price range, here is where the fun begins. You may have a chance of revamping some of your line with this advice. Put the correct price on your new, premiere products. If you revamp your older ones, make sure you put the correct price on it and let your customer know why it the price has increase. Usually with an increase in prices this way you have tweaked the formula. Let them know that.
Are you pretty happy with your prices? What do you think could help you out?
Many Blessings,
