Jose Palomino

Pricing: Where is Your Starting Point?

October 26, 2012

Original Post:  Desperate makes us both feel cheap (pricing strategy)
By Drew McLellan | October 5, 2012

Your pricing strategy should never be accidental. It’s a vital element in your marketing mix… Dropping your price just to keep a customer is never a good strategy. It makes everyone feel a little cheap. In the end, no one wins and you can kiss any sort of recommendation goodbye. Your pricing strategy… speaks about things far beyond your cost. It communicates value, customer attentiveness and how you view the relationship, both short and long term. It’s not something you should just stumble into.

In this post, Drew shares with us a story about a business who was overcharging Drew until they found out he was going to the competition. They immediately said they could “match the price,” and Drew felt swindled. It’s a great anecdote, but also a little sad in that it’s all-too-common.

A lot of companies find themselves in this conundrum (and give the impression they’re untrustworthy) because they do not have a legitimate, grounded pricing strategy from day one. In general, there is not enough written about pricing strategies. So often, we — as marketers — are focused only on branding and social media and let pricing fall into last place. It can’t. This puts both us and our clients in harm’s way. We need to be more proactive about developing strategies for placing prices — and I believe the starting point is as simple as identifying both the ceiling and floor prices for your product’s category.

Where is the starting point for you?

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