How can you sell right product, to right customer, at the right time for the right price - more often?
Pricing is a critical cog in your business and at the heart of a pricing strategy is segmentation. If you understand the responsiveness to price of each customer segment you can make effective pricing decisions.
Customers have a tendency to have a ‘price reference point’ for each product they purchase. In other words, they will place a value on a product based on their expectations, needs, and previous experiences. It is important that you understand the reference points of each segment, as these will be different.
An effective approach to pricing involves asking yourself lots of questions, such as:
Which customer group offers us the most profit?
How much do our current and potential customers value our products and services?
- What prices do our competitors charge?
How much do our customers pay for similar products and services?
How does their willingness to pay change over time?
This will enable you to ask how much you should charge and,
Should our prices change depending where our guests come from?
Can we charge more for things that people really value - such as a packed lunch for walkers, or guided visits to local attractions
Should we offer discounts for repeat visits or can we offer those customers a higher level of service for the same price to keep bringing them back
Should the price change depending on when and where the purchase is made?
Lastly, don’t just ask questions - act on on your answers.
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