Tuesday, February 7, 2023



Maybe you don’t need to do anything in your business other than change the price. An adjustment in your pricing could be the key.

How Do You Price Your Products?

What I want to talk about is a big mistake business owners make when they want to attract customers especially when there is competition. What they do is they reduce their prices.

People Are Not Looking For The Lowest Prices

When you reduce your prices, you are putting yourself in a potentially bad situation. 

I’ve seen a lot of businesses go under because they fought a price war. No one wins a price war. You all lose.

There are many disadvantages of price reduction. The biggest disadvantage is that your margins will get thinner and thinner.

Firstly, there is no guarantee that the volume you will push will cover up for your expenses.

Secondly, what happens when the competition reduces their price as well?

Thirdly, reduction of your price will force you to reduce quality and service delivery. The customers will then dump you for this. You need a healthy margin to be able to service your customers efficiently.

There will always be price resistance from people but interestingly, price resistance comes most of the time from the business owner.

Another reason why some businesses reduce their prices is that they see some big businesses doing it so they try to copy them.

People Are Not Looking For The Lowest Prices… They Are Looking For What They Perceive As The Best Deal.

Most customers are not looking for the lowest prices. People are more interested in having a feeling that they are getting the best deal from the amount they are spending. People will prefer to spend more money if they
feel they are getting a good deal.

People are looking for deals. For value. Not necessarily low prices.

Most people are willing to pay more because they feel they are getting a better deal. Why? Because people do not look at prices in absolute terms. We look at it in comparative terms. We want to compare it to something.

It’s all about the deal. Even if your product is the cheapest in your category, if people feel they are not getting the best deal, they will not buy from you.

How To Use Low Prices Without Losing Out

You can use the low price technique in two ways without hurting your business. Let’s look at two of them:

1. Sales
Rather than permanently lower your prices, you can have a price reduction for a period of time.

2. Low Price As A Front End
You can have a low priced product as customer generation offer then you bring the customers in to buy your other high priced products.

How To Make Your Products Look Valuable

Make Your Products Affordable (Not Cheap)

There is a difference between making your products affordable and making them cheap.

Another way of making products affordable is through payments in installments.

It is not about the cheapest. It is about the best value for the money they have got.

Pile On Extra Perks And Bonuses

Think about ways to add perks and bonuses to your products. Never sell your products without bumping the value up with some sort of bonus. It doesn’t matter what business you are into. You can always find a way to add bonuses. By the time people look at the value of the bonuses, the price becomes irrelevant.

Another way of generating perks and bonuses is by offering a loyalty scheme whereby being your customer gives them access to some other products and deals.

Change Your Form of Delivery 

I don’t want you to be rigid when it comes to your business. Most people have this “that is how it is done in this industry” mindset and they just do what others are doing. There is no rule that can tell you how to run YOUR business.

Home delivery is now common for most kinds of business.

Is there a way you can change the way you deliver your products and services?

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