When it comes to pricing or putting a price on your product or service, there are different areas to consider…and all the more so during a recession or with customers who have a recession mindset.

What are some different considerations or pricing criteria? Here’s what you should not be basing your pricing on…statements like these:

• “My competitor charges X, so my price will be based (competition-based pricing)

• “I will make this price artificially high to create an illusion of higher value.” (and then lower it to look better in a prospect’s eyes – premium pricing)

• “I will be as aggressive and no-holds-barred as far as pricing my competitors out of the market.” (predatory pricing)

• “I will price my service or product at a number ending in a 99 or 97 instead of 00 – to give the perceiption of a ‘better’ price.) psychological pricing)

Here’s the thing with these and other not-so-great pricing rationalizations:
1. Being a competitor or beating your own competitor(s) based on pricing alone does not generally work in the long-run.

***If someone chooses you or hires you solely based on price, they will be unhappy when or if you change prices or alter any of the existing pricing structure. They will also be so focused on price that your services/product and accompanying service will become secondary. Not a basis for a long-term relationship.

2. Whether you are an online or offline business (or both), you will want to evaluate why your customers buy what they buy, how they make their decisions and what they really need and want. Then, price and connect with them accordingly.

***You are only as good as your information about your target market. Don’t ever assume something you don’t know for sure about the people you want to become your customers. Don’t price based on what you think – price based on what you know. And while you are at it, know very well what about pricing is important to them. Cater to them, speak their language and sell directly to them.

3. Connection is the way to go. Ultimately, your value to a customer is in your entire “package,” – service, longevity, flexibility, additional services, etc.

***Know that things like professionalism, accessibility and quality are those “priceless intangibles” that make all the difference. Connect with your customers and potential customers. Invest in your relationship with them. Price is but one factor in this multi-faceted equation.

So when it comes to the age-old question of how, when, if and how to re-price, you want to be sure to consider all factors involved – and, in most cases, you will want to consider them before you make even one pricing decision.

Naturally, your customers and potential customers consider price as a factor in their buying decisions. But you never want to be in a position in which price is the only deciding factor between you and a competitor.

Why?

Because what you offer and what you sell goes beyond a number or a price. It is about solutions. It is about value.

What is the value – not the price – of the service or product you are selling?

And, by the way, what are you selling? Your answer to this question should be more than the product or service you say you are selling. What you are selling represents the improvement in the business or even in the life of your customer. Is it more of something they desperately seek, like money or time? Is it freedom? Control?

Once you start thinking in these terms, you will find that the actual price tag you put on the solution is secondary - -though still important – to the bigger picture. Then the question becomes, how do you convey the importance, and the true value, to your potential customer?

* You speak their language. Know their problems, their issues and their concerns. Know them so well that you can hone in on what their pain is and on how your product/service will ease their pain. This is basic Marketing 101 stuff, and as important as ever.

* Don’t defend your price. Instead, show your potential customers how they cannot afford to be without your product/service. Think, instead, of what the cost for them of not taking advantage of what you are selling would be. Think, instead, of what their potential danger for “missing out” would be. Get good at conveying this, not just a bottom-line number, for them.

* Think in terms of saving, not spending. What would it cost someone who needs what you are selling to not have what they so need? (And you can even go beyond – how would they actually earn money by becoming your customer?)

* Don’t ever apologize. You are good at what you do. You offer a high-quality product or service. You are dedicated to customer success and satisfaction. Your pricing is not only reasonable and affordable – it is based on making your customer more money, and saving him time and other valuable resources along the way. He needs you and you exist to deliver to him!