On numerous occasions a new client will express a need for assistance in setting up the pricing structure for their business.
Then the qualifier comes in as they explain at great length why for their specific business looking at other pricing structures and packages would never work as their business was ‘different’. As you have may have already imagined they need to be told ‘really’? That is basically a bunch of CR**!
Of course this would not be said to my client, or would it?
You just never know until you are there do you?
Here is the thing, while your business may be different, everyone out in the world, the potential customers and clients have become trained as consumers!
What do you mean by that Mitch? How about a few examples and you might see what is going on in terms of pricing and packages every single day all around us.
Let’s begin with a regional grocery store such as Stop N Shop. Often when they are advertising an item for sale the discount is contingent upon purchased at least $75 worth (some amount) of other grocery items.
The key here is the price structure. The item for sale must be at a discount large enough to gather crowd interest. Once the crowd interest is there, the fine print about purchasing at least $75 worth of groceries is lost in the excitement.
On the check out line while waiting you notice all of the chewing gum packs are offered at three packs for the price of two. Again this is price structure as well as packaging the sale offer.
Another strategy in place while partnering with a brand is the offer to gift you a future $5 coupon as a credit if you purchase a certain dollar amount of a specific brand of products during a period of time.
Now you might be thinking, Mitch has lost his mind with these references to the grocery store. Not at all. The margins are thin at the grocery store. These methods of pricing and pricing structures are in use at the grocery store because they work. The consumer is enticed to make the purchases. More importantly for our purposes is the consumer becomes trained to behave in a certain way.
Let’s consider the case of hiring a lawyer to assist us in a certain legal matter. Typically a lawyer will request a retainer. Since they are lawyers there will be all kinds of wording in the agreement about hourly rates and how the billing will be presented and recorded. We all know a lawyer is a professional so we do not ask for a coupon or a discount. We need their advice and we sign up and we pay.
Now how do we put this information into use ourselves?
First of all if you are interested in this topic go here as in the next few weeks you may be invited to a special call all about pricing in your business and a Question and Answer period will be part of the call as well.
Second is what is your product or service worth to you? What do you believe it is worth?
In closing for this article, what is the value to the customer, to the client?
If you would like to privately discuss your business and your pricing strategy with Mitch click here.
Mitch Tublin is an advanced certified coach, business consultant and professional speaker based in Stamford, CT.