You want to charge the highest price that customers will pay. Forget margins, mark ups or matching competitors, this must be the central aim of every pricing decision.
The question is how can the optimal price be identified?
Well, it’s surprisingly simple actually. Just like contestants on the Price is Right, ask the crowd.
Of course you can’t just call up and quiz them directly – they’re bound to undercut you – but through a series of skewed questions you can arrive at that optimal price.
The trick is to find the areas where customers view pricing differently to business owners. You can do that by asking these 5 questions, posed as a satisfaction survey.
1. What competitor products did they consider buying?
If customers looked around and considered a range of options then they’re probably quite price sensitive. If yours was the one and only product they looked at then there’s an opportunity to raise prices.
From this question you can start to get a picture of what sort of customers care about price and which ones don’t.
2. How do they view the current price?
Is it too high or perceived as pretty cheap? Simple, self explanatory query that you might get one word or a long winded answer for. Both are useful.
3. What don’t they like about the current pricing?
This question is what the customer makes of it and can provide some great insights into what they don’t value, and what they might be willing to pay more for.
Bonus offers? Packages? Shipping? Specials? Loyalty rewards? A lot of hints can come out of this open ended inquiry.
4. How do they prefer to purchase?
The answer might relate to things like online, leasing, lay-by or payment plan.
Whatever the outcome listen up and don’t rule out any form of selling. Customers are often willing to pay for the convenience of a method that suits them.
5. How would they like to see the product changed?
This is about understanding the extra bits currently absent from your product that customers value, and would therefore be willing to pay more for.
Answers can be a great source of customer centric innovations that set you apart from the competition and attract a premium price tag too.
With these 5 simple surveys you will be able to formulate the optimal price for your product. So find out what's on Larry Emdur's palm cards today by asking the crowd.