Pricing Essentials
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This document discusses pricing strategies and considerations for businesses. It addresses determining the right price by considering costs, competitors, and customers. Pricing directly impacts profit, which is calculated as the number of customers multiplied by the sales price. The document also discusses bundling products and services, using discounts strategically to create urgency while protecting perceived value, and evaluating pricing strategies based on goals and key metrics like sales, customer count, and profit.
Pricing Essentials
- 1. Pricing Strategy A practical discussion Kate Groom Copyright 2016, Smart Franchise
- 2. Whats the right price?
- 3. When did you last choose a price for a product or service? What quantitative and qualitative information did you use to make that decision?
- 4. Price vs. Cost Price What someone is willing to pay Cost What it costs you to make it Profit The difference between the two
- 5. Price: The most important business decision you will make? Profit (or loss) boils down to: Number of Customers x Sales Price
- 6. The impact of price changes What impact would a 10% price increase have on profit in your business, assuming you did not lose sales? What impact would a 10% unit sales increase have on profit, assuming your price were 10% less? Number of Customers x Sales Price
- 7. Pricing Perfection 1. Leave no money on the table 2. Maximise unit sales 3. Aligns with perception of value
- 9. The benefits of bundling
- 10. What bundling does your business employ today? What customised pre-set bundles could your business consider?
- 11. Discounting
- 12. Healthy discounting Create a compelling reason to buy Urgency Promise of value
- 13. But
- 14. Some warnings! Dont offer discounts for long periods Vary your offers Guard your value
- 15. What is one example of your business offering promotional discounts? (Cost & Gain?) Name 3 ways your business could generate urgency by using discount-based offers
- 16. Is my strategy working? What are your goals? What are your key measures? Sales ($ and/or volume) Customer count Profit
- 17. Thank You! kate.groom@smartfranchise.com.au LinkedIn Facebook/Weekly Business Tips