Pricing Your Products or Services Too Low

One of the biggest problems to many small business owners is how to price their products or services.  This article aims at listing some of the problems of pricing the service or product too low and presents an alternative

The problems with  price reductions

• Decrease net profits
• Lead to the purchase of lower quality products
• Increase customer demands to drop the price even lower
• Require even more sales to make up the difference in revenue
• Need a larger quantity of products

Often, prospective customers turn round and say, “I would buy it if it were in my price range.” and this tempts many business owners to lower their prices - just to sell more products without any thought about the consequences listed above.

As a business you need to find real benefits  or value that you can use to sell to your customers and prospects. Help them to see how much their life will be better (for example your house will be warmer if you use our “triple K” double glazing) or how your can help them in their business (we can get your site up the search engines meaning that you get more visitors and therefore more clients)  if they use your product or service, and you’ve got a customer. Point out their current problem, tell them how you can solve it, and often the prospect will do anything to get rid of it.

Remember that price is not a benefit. Selling is not determined on the cost of your product. If you truly “sell” to you your customers and prospects, they will purchase your products/services no matter what price you determine (think of Rolls Royce and other luxury cars for example).

If a customer or prospect doesn’t buy…and they claim the cost had something to do with it…you can guess they probably wouldn’t have purchased anyway and this is normally because they are either not yet ready to buy or are not looking for the product or service that you are providing.

As a marketer, your job is to sell your products or services. The actual science of selling has nothing to do with the price of the product. By the time your contacts find out about the price, they should be determined to purchase no matter what the cost.

So rather than reducing your prices keep them at the same level and alter your marketing after all, if you have marketed correctly, you will still have customers keen to do business with you.

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