A Guide to Keep Pricing Both Competitive and Timely - John B. Wilson
A Guide To Keep
P R E S E N T E D B Y : J O H N B . W I L S O N
As an owner or other executive of a company, the pricing of
products or services is one of the most important business
decisions to make. Price too high, and customers will go
elsewhere. Price too low, and a business will not be
adequately paid for what it produces. The following is a
guide for how to keep pricing both competitive and timely.
The first step towards determining a fair price for
products and services is determining what they are
truly worth. Consider things such as production cost,
cost of materials, what customers expect to pay for it,
experience, qualifications and other similar factors.
Added value, such as specialized experience or
knowledge in multiple areas, can be factored in as
One good way for a business to measure its prices is to
compare those prices to what the competition charges.
Researching competitors, including what they offer and at what
price, is something every business should be doing. Do not just
compare prices. Compare�product price value�as well. For
example, customers are usually more agreeable to paying
higher prices for a better quality product. Monitor the prices of
competitors over time and adjust rates accordingly.
Over time, things change. Production costs go up,
inflation happens, the quality of the service gets better.
Business owners and executives need to have a solid idea
of production costs and be conscious of when those
become unsustainable in a current pricing structure. For
service-oriented businesses, the cost of becoming
qualified to perform the service, the ever-growing
experience of the provider and continuing education
costs should also be taken into account.
How a company goes about raising prices is just as important as deciding to
raise prices in the first place. Explain the reasoning behind the price change
and test the waters first before raising prices across the board. Small
businesses, for example, can raise their rates for new clients while still giving
original rates to existing clients before perhaps incrementally raising them.
Companies that are responsive and able to adapt their pricing structure as the
market changes are in the best position to experience growth and success.
Perform market research before setting prices to begin with and then make
changes in the future as circumstances change.
For more information
RPA Summer 2020