With everybody looking for the next deal, it may make sense to lower your price to reach a wider variety of people – but this could prove harmful in ways that you hadn’t considered. Your pricing strategy is an important part of your brand and tells clients and prospective clients more about your company than you might think.
The quality of your service or product
Have you ever heard the saying “you get what you pay for”? It’s an important part of the consumer mindset that is built into our thinking. Lower prices mean lower quality. Consumers are less likely to trust your product if they feel as though your price is too low. In fact, according to a study conducted in 2007, price directly affects the level of service quality your consumer expects.
You may be thinking, that’s good, right? If I charge less and lower my customers’ expectations, then they will be delightfully surprised when I exceed their expectations. This, however, rarely works out as expected. Not only do you need the customer to give you a chance in the first place, you also need to ensure that you are charging enough to be able to afford that superior quality service you expect to provide.
Your ability to provide service
Imagine for a minute that you are a photographer. All photographers in the area are charging $300 per session. You think to yourself “Well, I can survive by charging only $150 per session.” You may be right, you probably could survive charging that much. However, you’ve now left people wondering why your service is so much cheaper than your competitors’. They may not trust in your ability to capture an important moment in their lives.
People are willing to pay for quality. We see that across all industries – don’t sell yourself short, literally.
In fact, it is almost a self-fulfilling prophecy. Although you may have been able to provide quality service despite your price, you now have to take on more clients to make up the difference – limiting your ability to provide quality service.
Your business ethics
This one may have you shaking your head a bit. How in the world can offering a lower price tell customers about your business ethics? Well, it’s actually pretty simple, offering a price that is too far below your comparable competitors’ is often seen as a deliberate attempt to undercut their business. You do not want to align your business with the notion of deliberately destroying someone’s livelihood. Consumers do not want to feel as though they are supporting the villain in the story.
As you can see, your pricing strategy is so much more than just a numbers game. You have to take into account how your price will affect the impression your potential clients have of you. Everyone may love a bargain, but at what price?
DISCLAIMER: This article expresses my own ideas and opinions. Any information I have shared are from sources that I believe to be reliable and accurate. I did not receive any financial compensation in writing this post, nor do I own any shares in any company I’ve mentioned. I encourage any reader to do their own diligent research first before making any investment decisions.
4 fintech companies that are helping retail-oriented investors
If you're looking to support fintech companies that help the retail sector, there are plenty of options to consider. Four...
The story of Netflix: From birth to bank vaults to Bill Clinton
Today, the success of Netflix seems inevitable. In his bestselling new book, That Will Never Work, the first CEO of...
The marijuana industry will grow inevitably
Since Canada legalized marijuana last year, the industry is buzzing with activities today, with Canadians expecting the industry to be...
Coping with the early retirement you didn’t plan for
Many Americans are working towards their dream of early retirement. However, about 37% of citizens have to retire sooner than...
Agricultural markets saw a positive week amid good demand news
Almost all agricultural markets had a positive week. Corn closed higher as demand news started to improve. Soybeans and products...
- Africa4 days ago
African crowdfunding industry still limited but has potential
- Featured4 days ago
Choosing between impact investing charitable donations
- Crypto2 days ago
Here’s how women are shaking up the cryptocurrency world
- Crowdfunding4 days ago
How to become a better backer for crowdfunding projects