The Power of Pricing - How Higher Prices Lead to Happier Customers | #014

  Too much? Not enough? Just right? Some would favor having a few molars pulled over having to think about what price to put on the tags of their service or product. Pricing is a topic worthy of controversial chatter and has the tendency to spark some serious debate.   Adam breaks down pricing strategies, practices his Latin, and explains why you should put the brakes on pricing too low.     Episode discussion:   3 different strategies to pricing The benefits of value-based pricing Adam's Latin: Ceteris Paribus Why focusing on undercutting competition is a race to the bottom The world's worst competitive advantage What kind of story your pricing is telling your customers   [02:07] 3 Different Ways to Price Products/Services   Cost-based: prices based on how much it costs Competition-based: prices based on competition [02:55] The major problem with competition-based pricing [03:37] Value-based: assigns a number to the value you're providing -Effectively articulate the value your service is providing -Focus on the benefits and end results and not just the features of the product   04:56 Ceteris Paribus: When everything else is equal... the defining consumer buying decision will be price. -The solution is to not let everything else be equal   [06:05] Never let price be your businesses primary competitive advantage! -Destroys your margins -Destroys ability to properly service your customers   "When you start to destroy your prices, you automatically end up having to sell more just to get to where you were before" [07:26] What your pricing strategy is conveying to your customers   Higher pricing sends a message of higher quality If you're not charging enough, you won't be able to reinvest back into the business or give customers the level of service you want to deliver. Higher prices tend to attract higher quality customers Those who are focused and appreciate the value you're providing.   [09:50] Takeaway: Focus on providing value, find some point of marketing differentiation, don't focus on competing on price.     Mentioned in this episode: -Modern Marketing episode #4 –Marketing Differentiation   Contact Adam: [email protected]   Click here to subscribe via iTunes Modern Marketing on Stitcher Modern Marketing on Pocket Casts