Your pricing is a part of your brand.
To really communicate a unified message to the people out there paying you for your product, your price has to be a part of your brand’s identity.
Your pricing can say a lot about your brand. In many cases it’s relative to what your competitors are charging for similar products, but it also comes down to the common sense of the public. We as consumers are always asking ourselves, “Is this worth my dollar?”, and we’re not afraid to give an honest answer.
So, how do you get the most out of your pricing? As you may have guessed, it starts with what your audience is getting out of your pricing. The better it is perceived by them, the more sustainable, and profitable, it will be for you. In an age where all a company’s successes, failures, strengths, and flaws are broadcast and discussed in the public forum, you owe it to us, and to yourself, to make your pricing something you can be proud of, and be transparent about.
Pricing can be a very complex and tricky thing to develop, but I’ve simplified the basics of pricing for the modern brand into three principles: simple pricing, fair pricing, and experimental pricing.
1. Simple Pricing
Your pricing can’t be complicated. Neither can your product offering. We like to categorize, organize, and simplify things, so when you come at us with a complex breakdown of products and pricing, we perceive your entire organization as too much to digest. You’re not making it easy on us, and we haven’t even thought about the actual pricing yet, just your presentation of it. Your pricing is one of the first things we judge you based upon, so make it easy to understand.
With most things that are numbers-based, I like to work with threes. One option is ideal, but three options tends to be a practical solution for most uses, and it tends to be received well by the public. So one product with one price, or three products with three prices will usually work well for your business. Also, common numbers such as factors of ten (10, 20, 30, etc.) or a dollar less (9, 19, 29, etc.) make pricing easier to comprehend, especially when there are multiple values to take into consideration.
2. Fair Pricing
You know the effort and the money it takes to make what you sell. You know how unique your product is, and the knowledge it took to develop it. So charge accordingly. Believe it or not, your customers will eventually sniff out just how fair your price actually is.
At some point, your customer will be shopping on price. When you’re in an industry with lots of competitors, those prices are readily available. When you’ve created a unique product with no competitors, it won’t stay that way for long. So be aware that, sooner or later, someone will make the same product less expensive, and you must have a legitimate reason for why your pricing is fair.
3. Experimental Pricing
So you’ve made your pricing easy to understand. You’ve made it profitable for you, but reasonable for your customer. Now, you watch. You watch how your customers perceive the pricing structure and the dollar amounts, you listen for feedback, and you take note. Just because you think your pricing is simple and fair doesn’t mean your customers think so too. You have to remember that you’re going into this somewhat blindly, and your audience needs to dictate where you go next.
You also have to watch for outside circumstances that might affect your strategy when it comes to pricing. A competitor adding a product line may encourage you to breakout a different version of your own product, or simply raise or lower your price.
It’s imperative to be flexible when it comes to your brand, because you must always be providing people with something they want. It’s no different for price. The people you make your products for are your livelihood, and although you’re the professional, they are the ones consuming. They decide what things make their lives better and what things no longer have value, and that’s O.K. The market changes constantly, but what remains is your commitment to providing a solution to a problem.