You already realise just how important pricing is to your business success – but it's still easy to fall into a trap and just plodding along aimlessley with the same old, same old prices. Don't you know that this could be costing you real money, it could be the difference between success and failure? Have you woken up and smelt the price of the coffee yet?

What to Consider?

Need to change your pricing strategy? That's a pretty big deal and a decision not to be taken lightly. The best way to avoid having a heart attack whilst you ponder this knotty issue is to break down (not literally) all the things you need to consider into smaller "compartments" and resolve each issue separately before you come to a final decision on your optimum pricing strategy and how you are going to achieve it.

Psychological pricing is a universal technique that you can apply to virtually any other broad pricing strategy. The general idea behind the concept of psychological pricing is to play on the mental tendencies of consumers, establishing a price that they perceive as better value.

It's a fact that no two customers have the same Willingness to Pay, but you naturally want to capture as much of each of your customer's Willingness to Pay as possible. The answer could be to charge different prices to different customers – known as price segmentation or price differentiation.

You may have a wonderful product or service to sell but just because you think it's wonderful doesn't guarantee success. In order to get the customer interested you also have to price it correctly and that requires knowing your customers well and what they're willing to pay, as well as what your competitors are charging in order to remain competitive.

Wouldn't you have an easy life if you could sell your products and services online for whatever you wanted – and your customers didn't complain at any stage – or go elsewhere? Obviously this might seem like a bit of a fantasy but it's entirely possible to achieve if you're using the right methods of pricing.

what is Differential Pricing?

A differential pricing strategy allows a company to adjust pricing based on various situations or circumstances. The price variations come in different forms, from discounts for a particular group of people to coupons or rebates for a purchase. In a nutshell it means that certain customers pay less for the same product than others.

There is one thing that can literally make or break your business and which most entrepreneurs never even think about properly – that is Pricing and Pricing Strategy.

In a time when consumers are resetting their priorities, values and behaviours and raw material/cost prices have fluctuated wildly, it is more important than ever to constantly review your pricing and the results of any pricing actions.

Selling on value, not price, involves a fine balance of confidence, personal rapport, and doing your homework. It's undoubtedly become more difficult as technology gives consumers greater access to price information and insights into what your competitors are up to – but stick with selling value and your prospects in the long term should be brighter.