Pricing is usually seen as that step in business where companies try to trick consumers out of their money. Although in some circumstances this may be correct, I much prefer to think about the win-win aspects. Your customer wins and you win.
Customer: Someone only buys a product (or service) when they get more value than the price they have to pay. This means whenever a purchase is made, whenever a customer exchanges cash for a product, the customer receives more value than it cost him or her. Of course, otherwise they wouldn’t have made the purchase.
When you set a price for your product you must choose a price below your customers’ willingness to pay. Otherwise they won’t purchase from you.
Company: From your company’s perspective, you win when you charge more for your products than they cost. That is the only way to make a profit and stay in business.
The customer wins with excess value. Your company wins with profit margin. It’s a win-win. Pricing is such a great job.
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Mark Stiving, Ph.D. – Small Business Pricing Expert
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