Who’s in charge of prices, you or your customers?

When you purchase products or services do you walk into the store and tell the storeowner what you’d like to pay? That would be nice, wouldn’t it? With most everything we purchase, we don’t get to choose how much we pay, so why give your customers that choice?

New business owners all struggle with pricing, so if this sounds like you, you’re not alone. It’s hard to put a value on something you do or something you’ve created. But the truth is, it is valuable and you do deserve to get paid.

Have you ever asked a customer to give you a ballpark estimate or said something along the lines of “make me an offer”? If you have, you’re not only short-changing yourself, you’re also making them feel uncomfortable. To your customers, you appear to have a lack of confidence, something that will only transfer to the product or service you’re selling. If you’re not sure, why should they be?

Know this: It is not your customer’s responsibility to set your prices. That’s your job. You must both set the price and convince them that they want to pay it. Here are a few things to keep in mind when you do that:

1. When you price your product, you’re also assigning worth to that product. Think about it. If you have two cups of coffee in front of you, but one is more expensive than the other, what do you think? Most people assume that the more expensive coffee is better. The same goes for low-priced items. Make sure your price is fair, bit just enough that your customer pauses to think before paying.
2. For most things we buy, we have a number of comparisons. Back to the coffee example, you have the choice of Tim Horton’s, Starbuck’s and the independently owned organic coffee shop on the corner. Which do you choose? How are their coffees priced? Find 2 other vendors who sell what you do and compare prices. Where do you fit in? Where do you want to fit?
3. Finally, don’t talk about price until you’ve sold them on the idea. Price shouldn’t be the first consideration – your product or service’s selling points should be. Once you’ve got them sold on the idea, price shouldn’t be an object, as long as you’re fair.

Homework: Find 3 other businesses similar to yours. Rate how successful you think they are at what they do. Check out their prices. How do they compare to yours? In comparison to others in the market, are you fairly priced? Are you clear about what they’re getting for the price? Make a list of areas where you can improve.