Quote of the Week

"Do not wait to strike till the iron is hot, but make it hot by striking."

~William Butler Yeats

This Week’s Tip

How To Best Price Your Products and/or Services

Let’s get one thing straight: Your price isn’t just a number. It’s the key to unlocking the true value of your product or service, and it’s the biggest lever you have for growing your business. Price too low, and you risk leaving money on the table. Price too high, and you’ll scare away potential customers. So how do you find that sweet spot where you’re maximizing both your profit and the value your customers perceive?

Here’s the thing—pricing is a strategic decision, and the wrong price can sabotage your entire business model. But getting it right isn’t about some magical equation. It’s about understanding your market, your value, and the psychology behind what makes people willing to pay.

1. Understand Your Costs First

Before you even start thinking about what to charge, you need to know what it costs you to deliver your product or service. If you don’t have a handle on your costs, you could end up pricing yourself out of business. Take into account:

• Direct costs (e.g., materials, manufacturing, labor)

• Indirect costs (e.g., overhead, marketing, software, utilities)

Once you know your costs, add a margin that makes sense for your business model. This ensures that no matter what happens, you’re still making a profit.

2. Know Your Market

You need to know what your competitors are charging. But here’s the twist: Don’t just copy their prices. Yes, it’s good to know what others in your space are doing, but don’t set your price based solely on them. Price is an indicator of quality. So, if you price too low, customers may question whether your product is worth their time. If you price too high, you risk alienating your market before you’ve even had a chance to prove your value.

Understand where your product or service fits in the market. Are you targeting budget-conscious customers, or are you positioned as a premium product? Once you know your positioning, price accordingly.

3. Price Based on Value, Not Just Cost

The most important thing to remember about pricing is this: It’s not just about what it costs you—it’s about what your customer is willing to pay for the value they’re getting.

For example, if you’re offering a premium service that saves your customer time, money, or effort, they’ll likely pay more for it. The key is to identify what your customers value most, and then price based on that perceived value.

Don’t be afraid to charge what you’re worth. People buy solutions to problems. If you’re solving a significant problem, your price should reflect the value of that solution.

4. Test and Iterate

You don’t have to get your price perfect on the first try. In fact, testing and iterating your pricing strategy is one of the smartest things you can do. Start with a price that feels right based on your costs, market research, and value, then experiment. Offer different packages, run promotions, or adjust your prices to see how your customers respond.

For instance, if you offer a service, try a basic, premium, and deluxe package with varying price points. This allows you to see which pricing tier gets the best response, and you can adjust from there.

5. Consider Psychological Pricing

Ever wondered why things are priced at $9.99 instead of $10? That’s psychological pricing in action. People are wired to perceive $9.99 as a better deal than $10, even though it’s just one cent less.

Use this to your advantage. For example, $99 feels more attractive than $100, even though the difference is negligible. Similarly, offering discounts or showing the “retail price” alongside your price can create a sense of urgency or value.

5 Key Action Items You Can Take Now:

1. Calculate your costs: List out all the expenses involved in creating and delivering your product or service. Add a margin for profit.

2. Research your competitors: Look at what others in your market are charging, but focus on how you can differentiate yourself by offering more value.

3. Set your initial price based on the value you provide, not just your costs. Price where you believe your customer sees the most benefit.

4. Test different price points: Run experiments with different pricing strategies—offer different tiers or bundle your products and see what drives the most sales.

5. Incorporate psychological pricing: Test small price tweaks, like rounding down to $9.99 or using “limited-time offer” language to boost conversions.

Pricing is more than just picking a number; it’s about positioning yourself in your market and showing your customers the value of your offer. Get it right, and you’re setting your business up for long-term growth.

Now, go out there and start pricing with confidence!

This Week’s Resource

LIVE Webinar: Raising Capital in an AI Age

Join PlanWriters CEO Matthew Khalili, for a LIVE webinar on Wednesday, 8/6 at 1pm ET/ Noon CT / 11am MT / 10 am PT.

In it, you will learn how to raise capital today.

Register Here ←

During the webinar, you’ll learn 

• How to raise funding in the age of AI

• AI-era fundraising trends and investor expectations

• How to stand out from automated pitches

• Building trust through authentic storytelling

• How to craft a pitch that resonates deeply

If you’re currently seeking funding, this webinar is a must-attend!

Register Here ←

Trivia

Question: Which company created the first portable digital music player, the MP3 player, in 1998?

Answer:
Saehan Information Systems, a South Korean company, created the first portable MP3 player, the MPMan, in 1998.

Business Lesson:
Sometimes innovation comes from unexpected places. By identifying a gap in the market and developing a solution, even smaller players can change an industry. The MP3 player paved the way for future digital media devices, but its true evolution came with the rise of iPods and smartphones.

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