Implementing pricing strategies in marketing is one of the most important aspects of any business, no matter where you lie within your industry. But your product pricing strategies will inescapably be among the important questions you have to consider. Yet, despite the heap of information out there on the subject, many businesses still fall for the same old mistakes in pricing strategies in their quest for that mythical formula that will boost their profits.
Contact us to learn how you can improve profits and shareholder value using advanced pricing strategies to uniquely position your products and services.
In this article, we have highlighted common mistakes while implementing pricing strategies in marketing. Let’s delve into some of those pricing pitfalls that your business must avoid:
Mistakes to Avoid in Implementing Pricing Strategies
1. Avoid Setting Prices too Low
It is conventional wisdom that lower prices attract better sales but this often couldn’t be further from the truth. With this strategy, companies start undervaluing their products, selling them at a fraction of their ideal price points. Sure, revenue may skyrocket initially, but you won’t be able to sustain that level for very long without this approach wreaking havoc on your bottom line. Also, pricing is one of the greatest tools for molding the perception of your audience for your product. Pricing your products too low can make it unattractive to quality-conscious consumers and this can derive the conclusion that it is weaker than its more premium-priced competition.
2. Avoid Basing Prices of Your Product Solely on Cost
Product pricing strategies consider costs which is the only way to ensure that there is a reliable profit margin in place for each of your products. However, it is very essential to take a broader view of your product in the marketplace. Decide beforehand the role that your product is going to play in your business strategy. It is always a good idea to consider various variations on key product offerings, each with an important role to play in shaping your future plans.
3. Avoid Keeping Prices the Same Across the Board
This is one of the most common mistakes made while implementing pricing strategies in marketing. You should essentially avoid keeping the same prices across all verticals and should use multiple price points to check which product and price points drive maximum conversions. This can help drive sales on all fronts. Moreover, following dynamic pricing allows businesses to change their price points based on various factors that are tied directly to the behavior of customers.