3 steps to review your pricing model

Below are three steps to ensure your pricing model is correct:

First, single or fixed pricing 

• Businesses that can differentiate themselves by offering a set price are those that charge by the hour, the unit, the number of services they provide, the amount of food eaten, or the number of products used

• Fixed pricing can be used for most businesses to establish a market dominating position

• You can also used fixed pricing on a per visit or per season basis

Second, increase or decrease the price you charge 

• Prospects often judge quality by the price you charge

• A price that they perceive to be extremely low instantly sends off warning bells in their decision making process

• Businesses can actually raise their pricing and instantly reposition their product or service to give it the perception of being the superior choice without changing anything else

Third, offer small value added services 

• There are always customers that will gladly pay you a little extra to receive a higher level of service

• If you believe this applies to your business, think about raising your service level along with your pricing

• Value added services don’t require huge investments • Service, selection and price make up the 3 categories that will enable you to separate your business from your competition

Robert Ritch

Robert Ritch is an expert in marketing and finance. He has developed these skills over a 25-year career specializing in business turnarounds.

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