The other day I ran out of coffee which resulted in me trolling the aisles of my local grocery store. Upon finding the right area for coffee, I was met with many choices. I happened upon an unfamiliar brand which seemed quite expressive. In light of the hefty price tag, I couldn’t help thinking that there must’ve been something amazing about this coffee. Yes, the fancy packaging caught my eye; however, the price said even more. It told me that this product was in a totally different class.
As a small business owner, you too will have potential customers trolling around your location or Website observing prices. It is important to understand that your overall pricing is just as vital to your branding as any signage, logo or advertising piece. Consider the following points:
Be Willing To Make a Stand
You, as a small business owner must make a case for your prices. Let’s jump back to my coffee run for a moment. The higher priced java would most likely come under great scrutiny if the product wound up with an average taste. It is up to that coffee producer to justify their higher cost with a substantially different (and of course, better) taste experience. The same is true of your business. You cannot slap a huge price tag on something merely because you have high overhead and must make payroll. You must demonstrate that you are worth every penny that you’re asking for. This is especially true if you’re surrounded by competitors who offer similar products and services at lower rates.
Know Who You Are
As a business, a part of your identity will come from your price levels. Imagine driving past a Ferrari dealer and discovered that they also carry Hyundais. How would this knowledge shape the perception of the average consumer? On the other hand, imagine getting a flyer from a neighborhood diner which featured foie gras prepared by their French chef. Would you still be inclined to drop by this establishment with the kids for a cheap burger and shake? The point is it’s important to provide the public a clear sense of who you are; and in many instances this can be done via price.
Know Who They Are
Whether your pricing is on the high-side, incredibly low or somewhere in the middle, know that it will automatically send a certain segment of the population to your business. It is important for you to be aware of who these people are. For instance, some customers take pride in paying a bit more for a hard-to-find, high-quality item. Others may wear bargain-hunting as a badge of honor. If you watch closely enough, you may pick up key behavioral and demographic information which will aid in your overall marketing strategy.
Price is not merely a function of number-crunching and margins, it is also the first thing many consumers use to assess your brand. So be sure you choose your rates wisely.
Walter Dailey is a marketing consultant and executive producer for Dailey Sound Vector, a creative services organization that specializes in advertisingand marketing for small to medium size businesses throughout the US and Canada. Ask Walter your questions at firstname.lastname@example.org