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Is determining the best price a problem? Photo by luz from flickr.
Are you having trouble determining how to set the best price for your products or services? That seems to be a common problem for owners of independent businesses.
Do it right and customers will be content, happy to pay you what you deserve, and you’ll be around. Do it wrong and you won’t. It’s that simple. [Read more…]
Focus on Platinum Profile Prospects™.
On June 25th I’m going to be speaking at the BSC B2B Meetup in Austin about finding the best prospects and firing the worst customers. It’s one of my favorite subjects because it’s got a huge payoff.
Price right. Image by TW Collins.
There’s nothing wrong with Cost-plus or Value-based pricing when they are done right. Both are good strategies but incomplete in my opinion.
In the case of Cost-based pricing, basically you look at the costs and then add a percentage for profit on top of that number to arrive at a price.
In my experience, those who set the prices don’t know, forget, or leave out costs that they shouldn’t. Sometimes it is the cost of the salary of the principals or putting in enough for contingencies. Just as often they don’t include all the costs involved in being able to provide this product or service before and after getting customer #1. Then there are the true total costs to support and maintain this customer with this product or service. [Read more…]