Setting the Right Price

One of the ways people get to know you is by the identity you project. Your company name, the way you present yourself, your business card and brochure, where you work, and other ways you conduct your business create an image that gives your customers information about you.

Pricing is a part of your image, too. Many entrepreneurs make the mistake of underpricing. They believe that the only way to attract customers is to have the lowest possible price. But this attitude can damage your business.

First of all, when you underprice you won't be adequately compensated for your time. You must be able to make enough money to pay your bills and grow your business, or you won't be in business very long.

Ironically, underpricing can actually result in getting fewer customers, not more. Think about this from the customer's perspective. Let's say you are looking for someone to do a job for you. You contact five companies, and get prices of $4000, $2700, $2500, $2400, and $1000. Which one would you select?

Assuming that the quotes are all based on the same specifications, most people would immediately eliminate the $4000 quote as being way out of line; however, they would also be suspicious of the $1000 quote. Why is it so much less than the others? Do they use substandard materials? Are their workers less skilled? Will they do a poor job--if they do the job at all?

Price isn't the only factor people consider when making a purchase. You might choose the $2700 quote because you decide the price is reasonable, and someone from the company called you back quickly. You get a good feeling from their responsiveness, and decide they may be worth a few dollars more than the lowest bidder.

Some markets are more price sensitive than others, and there is probably a price point you can't exceed for your product or service. But coming in far below the "going rate" can be just as harmful to your business as overpricing.

Copyright Cathy Stucker. As the Idea Lady, Cathy Stucker can help you attract customers and make yourself famous with inexpensive and free marketing ideas. Get free tips, articles and more at http://www.IdeaLady.com/.

MORE RESOURCES:

RELATED ARTICLES

Wealthiest 10% of Americans Name Top Quality Brands for 8 Products in New Survey
The seventh in a continuing series of twice-yearly surveys by The American Affluence Research Center (AARC) reveals the brands considered to have the highest quality, regardless of price, by the wealthiest 10% of Americans, the 11 million households representing about half of all consumer income and spending, a third of the total US economy, and 70% of the personal wealth of Americans.Just released, the AARC report, The Luxury Market: Spring 2005 Survey of Affluent Americans, shows the affluent named Rolex, Cartier, and Tag Heuer as the top three brands for quality, regardless of price, for lady's fine watches.

The Importance of Branding - Can It Really Make a Difference?
As consumers, we don't really think about the importance of branding. We just seem to go with the flow of brand names that have become synonymous with our daily living.

My First Year In Cyber Space
My first year as a Cyberpreneur was a steeplearning-curve. I was an academic beforestarting an online business, so I had a lot to learn.

Branding Advertising Agency
Branding used to be a fancy business word, but it is becoming more and more used in everyday business meetings. Finally! For decades, big corporations have used in-house, very well paid brand managers - someone in charge of managing everything that relates to the brand, including design, package and partnerships.

Which Of These Words Attract Your Clients
Whether it's your business card, tagline, article title, web site title and description or ad, just the difference of a few words can either pull in prospects and clients or push them away. Getting it right can determine whether your phone is ringing off the hook or you are twiddling your thumbs hoping someone will call.

The Face of Your Business, Part I
When we initially started our businesses, we had to decide how we were going to market ourselves. Kind of an obvious statement - every business has to do that.

Extreme Makeover - Small Business Edition
Have you ever watched one of those home makeover shows? You know the scenario. The homeowners have decorated or remodeled their house all by themselves.

Corporate Internet Branding - Branding Your Business Online
Let me tell you a story about Pete and a pizza. After a long day of fighting uncooperative pipes and fixtures, Pete P.

Branding Junk Removal - He Did It, Can You?
What does it mean to be remarkable?Brian Scudamore, CEO and Founder of 1-800-GOT-JUNK?, who in 1996 was operating the million dollar plus company at the age of 26, said it means, "You've got to get out there and be loud and proud..

The Big Uneasy: Clearing the Clouds of Guess
People often come to me to assist them with developing their brand because they are unable to accomplish the business success they desire. They're experiencing what we call the Big Uneasy--the state of being when things are hard.

Importance of Branding - Whats in a Name?
Branding is perhaps the most important facet of any business--beyond product, distribution, pricing, or location. A company's brand is its definition in the world, the name that identifies it to itself and the marketplace.

Naming Names... How to Name your Business
Sometimes the best inspiration comes from hearing about the deconstruction of other company's names. For you, I am happy to share how I came up with�"Slice A Day :: your slice on marketing".

Articles: The Perfect Branding Tool
If you own a web-based business, you're probably aware of the need for things like link exchanges, lead-purchasing, SEO copy, banner ads and all of the "traditional" ways to get exposure on the World Wide Web.But did you know that article marketing is by far the best way to build your brand while at the same time increasing your exposure?Web articles.

Positioning and Branding - Brand Identity Guru
Where is your brand positioned in the marketplace? How is it perceived, both positively and negatively? Can you identify your brand's core strength's and equities? What are the barriers or threats standing in the way? A brand strategy company will provide you with an objective assessment of your brand.They can deliver specific solutions that will allow you to reach your strategic business goals and objectives, and clearly differentiate your brand and identity in the marketplace.

Acquire, Then Rebrand
Acquiring another corporation usually means that the acquiring company's name will be the name of the newly merged entity. There is one factor that can change that -- one that is stronger than anything else.

Build Brand Identity Through Product Branding
Building a product into a brand leader is not easy, but I truly believe that you can improve your branding impression if you follow these 2 rules; Passion & Consistency as well as the 4P's of Branding that I have developed, PRODUCT - PLACEMENT - PROMOTION - PEOPLE. These 4 P's will enable you to check the way your brand is interpreted.

Trademark Issues in the Mobil Auto Business
There have always been trademark issues and lawsuits in the mobile auto service business. I know this because I own several such businesses.

Why Branding?
Having a concise, clear image that you project to your clients and customers is important in today's market. More and more people are leaving the job market and creating their own business, whether by choice or necessity, so the competition continues to expand.

Counterfeit Branding - Representing True Globalisation!
From cigarettes to fashion accessories to food products to medicines, more than 50% of the global market are filled with counterfeited products. Do you realise that the Nike t-shirt that you are probably wearing right now may not even exist in the design portfolio of Nike Inc.

Value-pricing Strategy: Were not The Cheapest but...
In this highly competitive online marketplace, it can be difficult to persuade customers to buy from you when you offer a similar product to your opposition but with a higher price tag. And trying to beat competitors on price alone is a cut-throat business, very risky and not recommended.