Is Your Price Point killing Sales?
Sales are the heart of your business 9 out of 10 times. Bloggers and a few other specific businesses may sell indirectly or not at all. So working from this premise we can assume that you want to sell product consistently and repetitively (we all want customers to come back).
Assuming you want long term cash flow and growth and you aren’t looking for a one hit wonder.
We will also assume your product is killer, has good branding, marketing, and social media presence.
So all of those factors being declared let’s look at a factor a lot of up and coming entrepreneurs overlook, the price point.
A quality product or service has to have a proper price point as well or you risk eroding your profits.
Priced too high.
When you price your product too high you may miss your target audience. Indeed the very people you want to buy or benefit from what you offer may not be participants. This is where knowing your key demographics comes in handy. Data is always your best friend even if its implications appear negative. Let’s say guy X wants his tee shirt line to sell for 35 dollars a piece. Now data shows us people pay way more, 5 times as much in some cases. However you have to have the immersion, the marketing, and PR to make it work. Not to mention the distribution channels and so forth.
Guy Y on the other hand only wants a small profit and undercuts guy X by 10-15 dollars a tee shirt. In this economy especially he may beat guy X. Also at that price point people may buy 2 for 1 which is only a few bucks more. His lower price point has created new price points and may yield greater sales. If 5 dollars more buys an additional tee many people will opt for that deal. Have we not doubled sales on average? I’d say that all factors being equal we probably have.
If we look at the Kardashians we see proof of this. Their mainstream line is at sears and priced to sell. It is not on rodeo drive or 5th Avenue. This is simply to maximize profits. When you appeal to the mainstream you open yourself up to a greater amount of potential clients.
Priced too low.
The opposite can be said as well my friends. If Honda dropped their flagship Accord Model 13,000 dollars people would stop and think. Most would worry. As an Accord owner twice over I know that I pay a premium for value. The Honda brand is synonymous with quality and reliability. To under price that would gut their brand. It all comes down to value. You have to offer it to get fans and customers. But you have to value what you offer and what you create. Establish this before you go to print or sign deals.
Often we get what we expect and if you expect too little you will be little
#thriveorsurvive.
“High achievement always takes place in the framework of high expectation.”
-Charles Kettering
Thoughts? Concerns?
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Tony@Changeinadvance.com
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