Customers care about price. But it is certainly not the only thing they care about- and your entire business and marketing strategy should reflect that fact. In other words, you should never compete on price alone.
Instead, you should start by making sure that what you are offering exactly meets the needs of your ideal customers. And then you should make sure that you compete on the basis of giving those customers “maximum value” rather than the “lowest price”.
There are four keys to offering maximum value:
- To make sure that your products and services are exactly what your customers, especially your ideal customers, need and want.
- To make sure that your customers fully understand those benefits- because unless they understand that what you have to offer is special, they will assume it is average, and that means that you’ll only be able to charge an average price. So, managing their perceptions is vital.
- To make sure that your price structure is designed and calculated in the best possible way.
- To make sure that your prices are presented, explained and defended in the best possible way.
Your magic price
There are two extremes- a ridiculously low price and a ridiculously high price, at both of these extremes you wouldn’t make any profit. But at some of the prices in between those two extremes you will make a profit. At ONE price somewhere on that spectrum- let’s call it the magic price- you’ll make the most profit. It is that magic price that you are looking for- the magic price that will earn you the most profits.