“Small-business owners are often scared to increase prices and do so ineffectively,” says Anne Graham in Bloomberg this week. Instead of raising prices across the board, she recommends starting with small price increases on less visible products and services. She also says business owners should use rebates and raise prices as soon as they see an increase in orders.
While this is all good advice, every situation is different and there are no hard and fast rules when it comes to pricing. But, I can offer a few don’ts:
- Don’t try to be the lowest priced provider. It rarely works. People buy solutions, not the lowest price.
- Don’t try to justify your price, explain why you are different and why you are the best solution/product.
- Don’t underestimate your costs. Accurately include your expenses to complete the project, produce the product, etc.
- Don’t fixate on your competitors pricing. Do fixate on how your customers value your service/product.