2. Understand the market and your competition
This is where what's happening around you comes into play. An effective pricing strategy isn't created in a vacuum, but depends on what's happening in your industry and what others are doing.
Competitor pricing – it’s not about copying, it’s about seeing where you stand in comparison to them.
Demand : If you have something that people really need or want, you can adjust the price upwards. If it's something more common, you may need to be more competitive.
3. Calculate your costs well
This is basic: you can't lose money on every sale. Your prices have to cover what it costs you to produce or offer your product or service, and also leave you a margin to make some money.
Be sure to include:
Fixed costs : Such as rent, salaries or any expense forex data you always have, whether you sell or not.
Variable costs : Those that depend on what you sell, such as materials, shipping or commissions.
4. Perceived value is the key
This is super important: what people are willing to pay doesn't always have to do with how much it costs to produce something, but with the value they perceive in it. What are you bringing to the table? Why should they choose you?
How can you increase perceived value?
Highlight what makes your product or service unique.
Talk about the real benefits it will have for your client.
Use stories or images that connect emotionally with your audience.
5. Adapt your strategy to the life of your product
Not all products or services are always priced the same. It will depend on what stage you are in. Think of this as a cycle:
Launch : Here you can offer a lower price to attract customers or go for a high price if you want to position yourself as something exclusive.
Growth : Adjust based on demand. If you are very successful, you might want to raise the price a little.
Maturity : You can keep prices stable or use promotions to maintain interest.
Decline : When something no longer sells as well, it may be time to liquidate it or find creative ways to profit from it.
Types of pricing strategies
Pricing isn't something you can do by eye. There are many ways to approach it, and the best thing to do is to choose the strategy that best fits what you offer and your goals.
1. Based on cost
This is the typical one: you calculate how much it costs to produce your product or service, add a profit margin, and that's it. It's a pretty basic but effective way to make sure you don't lose money on every sale.
When to use it :
When you are clear about your costs (for example, for physical products).
If you need a simple base from which to start adjusting.
2. Value-based
Here we are not talking about how much it costs you, but rather how much it is worth to your customer. In other words, the price is set according to what your customers are willing to pay because they feel that what you offer is worth it.
When to use it :
If your product or service solves an important problem or provides something unique.
When your audience is willing to pay more for quality or benefit.
3. Based on competence
This strategy involves looking at what your competition is doing and adjusting your price accordingly. This can be at the same level, slightly lower, or even higher if you can justify why it is worth more.
When to use it :
If your market is saturated and you need to position yourself quickly.
When you want to stand out from similar competitors.
4. Dynamic
This is the “advanced level.” Prices change based on demand, time, or even what the competition is doing. If you’ve ever shopped for flights online, you’ve probably encountered this: one price in the morning and a completely different price in the afternoon.
When to use it :
If you have an e-commerce with tools to adjust prices in real time.
When you sell products or services with a lot of variation in demand.